Download ECON 2010-200 Principles of Microeconomics

,.
~
o I o - 2, oo
PRINCIPLES OF MICROECONOMICS (ECON 2010)
Deparunent of Economics, University of Colorado
Spring, 1998
T, R : 12:30 - 1:45 pm,
Professor: Charles de Bartolome
Office hours:
Office: Econ 202.
e-mail: debartol@spot. Colorado. edu
Room: ESCI 180
Recitation instructor:
Recitation time:
Recitation place:
Office hours:
Office:
Stiglitz, J.E., (1997), Principles of Microeconomics (2nd Edition).
New York: Norton.
Study Guide: Martin, L.W. , (1997), Study Guide/or Principles of Microeconomics
(2nd Edition). New York: Norton.
Textbook:
Course description: Microeconomics is about what goods get produced and sold at what
prices. The individual must decide what goods to buy, how much to save and how hard to
work. The firm must decide how much to produce and with what technology. The course
explores how "the magic of the market" coordinates these decisons.ln addition, the course
considers such questions as: Why is competition socially desirable? Is competition likely? How
do firms behave in the absence of competition?
The course is an introductory course. No previous knowledge of economics is
assumed. The student is, however, assumed to be able to solve simultaneous equations both
graphically and algebraically.
Grading: There are two midterms, a final exam, two experiments and two data collection
exercises. The grade of the student will be determined as: 30% First Midterm, 30 % Second
Midterm, 30% Final and 10 % Experiments. The data collection exercises are Pass/Fail.
Attendance at class: attendance at class is required. If you consistently miss class or recitation,
you will be warned. If you continue not to attend after the warning, you fail the course.
Attendance at recitation: attendance at recitation is required. At the recitation, you are
required to hand in your answers to the weekly problem-set. If you consistenly do not do this
or if your answers show no evidence of effort, you will be warned. If you ignore the warning ,
you fail the course.
Difference with other sections: I expect this section to go slower, cover fewer topics and put
more emphasis on analysis than other sections.
r
.>
Chapter
Date
Topic
13 Jan
WHAT IS ECONOMICS?
The role of markets .
The use of models.
Positive v normative economics.
15 Jan
THE BASIC MODEL
Rational agents.
Price-taking .
Property rights .
Opportunity set.
20, 22 Jan
THE GAINS FROM TRADE
Absolute advantage and comparative advantage
- gains from specialization.
- interdependence.
3
27, 29 Jan
3 Feb
LAW OF SUPPLY AND DEMAND
The coordinating role of prices
- individual demand curve.
- market demand curve.
- individual supply curve.
- market supply curve.
- equilibrium.
Marginal analysis
- demand rule: marginal benefit = price.
- supply rule: marginal cost = price.
- the paradox of value.
Shifts in the demand curve: substitutes and complements.
Shifts in the supply curve.
4
5 Feb
APPLICATIONS OF SUPPLY AND DEMAND
Inelastic = steep, elastic = flat.
Price-ceiling and price-floors.
10 Feb
FIRST MIDTERM
1
2
incl. Appendix
5
omit pp. 99-103
PROFIT MAXIMIZATION
Marginal revenue.
Profit maximization:
"marginal revenue = marginal cost" rule.
31 March
COMPETITIVE FIRMS
2, 7, 9, 14 April Output decision: "price = marginal cost" rule.
Accounting v. economic profits.
Short-run production decision:
"price > average variable cost" rule.
Firm short-run supply curve
- short-run market supply curve.
Long-run production decision:
" price > average cost" rule.
Firm long-run supply curve
- long-run market supply curve.
- "long-run price = minimum average cost " rule .
12
omit pp. 299-304
omit Appendix
16, 21 , 23,
28 April
COMPETITIVE GENERAL EQUILIBRIUM
13
Circular flow of funds
- partial equilibrium v. general equilibrium.
Pareto-efficiency
- utility possibility frontier.
- exchange efficiency: "equal marginal benefit" rule.
- pr_oduction efficiency: "equal marginal cost" rule.
- product-mix efficiency: "marginal benefit = marginal cost" rule.
First Fundamental Welfare Theorem
- social opportunity cost = price.
30 April
MONOPOLY
"Marginal revenue = marginal cost" rule.
Inefficient outcome.
12 May
FINAL EXAM
14
omit pp. 345 - 358 .
omit Appendices A and B