Download Course Syllabus - California State University, Bakersfield

California State University, Bakersfield
AECO 201 - Honors
MWF 11:00am-12:25am BDC B165
Essentials of Microeconomics
Dr. Jennifer VanGilder
Phone: 654-2026
Fax: 654-2438
E-mail: [email protected]
http://www.csub.edu/~jvangilder
Spring 2006
Office: BDC 230
Office Hours: MWF 10:00 am – 11:00 am
MW 1:00 pm – 2:00 pm
and by appointment
Required Text:
Arnold, Roger A., Microeconomics 7th edition, West Publishing Company, 2004.
Class Description:
Principles of Microeconomics is one of the two principles courses in the discipline of economics.
Microeconomics is the study of the behavior of individual decision makers in the economic system,
particularly households and business firms. It contrasts with macroeconomics, which is the study of the
behavior of the economic system as a whole. Successful study of economics requires an ability to engage in
abstract thinking. The course will focus on the development of economic models used to analyze the
behavior of decision-making units and will apply these models to real-world examples.
Course Objectives:
I. The student will understand the role of prices, and of competition, in determining
what goods are produced, how those goods are allocated, and how the benefits of trade are
distributed to consumers, workers, and firm owners.
II. The student will understand the workings of the competitive market.
III. The student will understand the firm's decision to supply goods to the market, in the context of
profit maximization.
IV. The student will understand how market characteristics influence firms' supply, pricing, and
investment behavior.
V. The student will be able to analyze real-life business situations using the principles covered in this
class.
Attendance Policy:
Students are responsible for making themselves aware of all California State University – Bakersfield and
Economic Department rules and procedures regarding class attendance. Attendance is a key part to a
successful grade in this class. Although attendance will not be taken, in-class activities are a percentage of
your final grade (i.e. you must be in class to participate in the in-class activities). It is important to note
however, when attendance is low, tardiness is becoming a problem, or people decide that only part of the
class is worth their time, I have been known to give extra credit points to those present.
In-class Homework Review:
Assigned homework will be reviewed in class during the first 30 minutes of the class following an
assignment. During this time students will be picked at random to answer each problem. To receive
participation points, answers DO NOT have to be correct. Points for participation will be granted for the
effort given to the problem. We are here to learn from, not judge each other. If you do not understand a
problem, attempt to solve it and we (myself and your peers) will help you through it. This is not a test, it is
a learning experience.
Examinations and Homework:
A midterm, two quizzes, and a final examination will be given throughout the quarter. The midterm exam
will be given on Monday May 1st. The final exam will be given during the campus final exam period.
Weekly homework assignments will be given. Assignments will be given during class and due at the
BEGINNING of class next class period. All assignments will be graded. Homework handed in after the
review (as long as you are NOT present in the classroom for the review. If present the homework receives
a grade of zero) has begun and up to the end of class will be given ½ credit. Homework handed in
WITHIN ONE HOUR after class has ended will be given ¼ credit. Homework handed in LATER THAN
ONE HOUR after class has ended will be given ZERO credit. Thus, it is essential not be tardy if full credit
is desired.
Grading Breakdown:
Final Grades will be determined as follows:
Midterm.................................25%
Cumulative Final.................. 30%
Quizzes …………………… 20%
Homework............................ 15%
Participation………………. 10%
Monday May 1st
Thursday June 8th 11:00am – 1:30pm
Friday April 14th and Friday May 19th
Grading Scale:
The grading scale used for this class will be as follows:
100-95
94-90
89-85
84-80
79-75
74-70
69-65
64-60
59-50
< 49
=A
= A= B+
=B
= B= C+
=C
= C=D
=F
Although this is the grading scale slated for this course, the instructor reserves the right to alter the scale to
fit the structure of the class.
Academic Dishonesty:
A zero tolerance policy towards academic dishonesty will be utilized within this classroom. Academic
dishonesty in this context refers to all aspects of cheating including making information available to
another student and plagiarism. The student is responsible for making themselves aware of all California
State University – Bakersfield’s policies on academic honesty. Any academic dishonesty detected will
immediately result in a grade of F (for the course) for all involved parties. Students can reference the 19992001 catalog (page 53) for additional information on academic dishonesty.
Classroom Conduct:
Although this class may involve discussion of controversial subjects, it is the instructor’s responsibility to
uphold the integrity of the learning environment. Opinions within a discussion framework are encouraged
and welcome. As adults we must understand and respect other’s opinions. If confronted with an
unreasonable disruption of the classroom, the instructor reserves the right to take action. Such actions can
result in disciplinary action ranging from removal from the classroom to suspension from the campus.
Please reference the CSUB 2005-2007 catalog for additional university policies on classroom behavior.
Disabilities:
If you have a disability or challenge which may require accommodation with respect to completing the
requirements of this course under the provisions of the Americans with Disabilities Act and the Office of
Disability Services, please contact the instructor immediately.
Course Framework:
I. What is Economics All About?
a. Economic Categories
i. Positive and Normative Economics; Microeconomics versus Macroeconomics
a. Key Concepts in Economics
i. Thinking in terms of scarcity; Opportunity Cost; Costs and Benefits; What do
dollars buy?; Ceteris Paribus; Association and Causation; Group versus the
individual; Decisions made at the margin; Unintended effects;
a. Economists Build and Test Theories
i. What is a Theory?; ?Building and Testing a Theory; How do we judge theories?
a. Appendix A: Working with Diagrams
i. Two-Variable Diagrams; Slope of a line and a curve; 45 degree line
a. Appendix B: Should you major in Economics?
i. Five Myths about Economics; What do Economists do?
I. Economic Activities: Producing and Trading
a. The production possibilities frontier
i. The economy’s PPF; Law of Increasing Opportunity Costs: Three economic
concepts within a PPF framework
a. Trade or Exchange
i. Purpose of trade; periods relevant to trad3e; measuring benefits of trades; costs of
trades; trades and third-party effects
a. Production, Trade, and Specialization
i. producing and trading; comparative advantage
a. Producing, Trading and Economic Systems
i. economic systems; economic systems and the PPF; trade and prices
I. Supply and Demand: Theory
a. Demand
i. The Law of Demand; absolute price and relative price; four ways to represent the
law of demand; change in quantity demand versus change in demand;
a. Supply
i. The law of supply; the market supply curve; changes in supply versus changes in
quantity supplied;
a. The market: putting supply and demand together
i. Auction model; moving to equilibrium; shortages and surpluses; consumer surplus
and producer surplus
a. Price Controls
i. Price ceiling; price floor; minimum wages; rent controls
I. Supply and Demand: Practice
a. Twenty-one supply and demand applications
I. Elasticity
a. Price elasticity of demand
i. Point elasticity; arc elasticity; relationship with total revenue; elasticity along a
straight line; determinates of price elasticity of demand
a. Cross Price elasticity
b. Income elasticity
c. Price elasticity of supply
i. Calculation; determinates
a. Taxes and elasticity
I. Consumer Choice: Maximizing Utility and Behavioral Economics
a. Utility Theory
i. Total and marginal utility; law of diminishing marginal utility; Diamond-Water
Paradox
a. Consumer equilibrium and demand
i. Equating marginal utilities per dollar; consumer equilibrium and the law of demand
a. Income and Substitution effects
i. Should the government provide the necessities of life for free?
VII. The Firm
a. Why firms exist
i. Invisible hand of the market versus invisible hand of the firm; shirking
a. Objective of the firm
i. Profit maximization
VII. Production and Costs
a. The firms objective: Maximizing profits
i. Accounting versus economic profit; Zero economic profit
a. Production
i. Short run; Marginal Physical Product and marginal costs; Average productivity
a. Costs of production: Total, Average, Marginal
i. Average marginal rule; relationship of costs and productivity; sunk costs
a. Production and costs in the long run
i. Long-run average total cost; economies of scale; envelope curve; minimum
efficient scale
a. Shifts in cost curves
i. Taxes; input prices; technology
VII. Perfect Competition
a. The theory of perfect competition
i. Price takers; demand curve; marginal revenue curve, theory and real world
markets; profit, breakeven, loss, and shutdown
a. Perfect competition in the short run
i. What level of output does the profit-maximizing firm produce; Resource allocative
efficiency; Produce or not? The shut down rule; short run supply curve; market
supply curve
a. Perfect competition in the long run
i. Conditions of long-run competitive equilibrium; industry adjustments to changes in
demand; entering and exiting firms; profit and discrimination
VII. Monopoly
a. Theories of monopoly
i. Barriers to entry; government versus market monopoly
a. Monopoly pricing and output decisions
i. Demand and total revenue curves; profit, loss, breakeven; consumer surplus
a. The case against monopoly
i. Deadweight loss; rent seeking; X-inefficiency
a. Price discrimination
i. Three degrees; moving to P=MC
VII. Monopolistic Competition, Oligopoly, and Game Theory
a. Theory of Monopolistic Competition
i. Demand curve and marginal revenue curve; relationship to monopoly; maximum
productivity; long run versus short run; excess capacity; advertisements
a. Oligopoly
i. Cartel theory; price leadership; kinked demand curve theory; game theory;
prisoner’s dilemma
-----------------------------------------------------------------------------------------------------------------------------HOMEWORK LIST
Chapter 1 (Part I)
Questions: 1 and 2
Chapter 1 (Part II)
Questions 4, 5, 7, 8
Appendix
Questions 6, 7, 9
Chapter 2
Questions 1, 5, 12, 17
Working with graphs and numbers 1, 2, and 5
Chapter 3
Questions: 1, 4, 8, 10, and 14
**No homework from Chapter 4**
Chapter 5
Questions 5, 6, 8
Working with Graphs and Numbers 1, 2, 4
Chapter 6
Questions 3, 4
Working with Graphs and Numbers 1, 3, 4, 5
Chapter 7
Questions 3, 4
Working with Graphs and Numbers 1, 3
Chapter 8
Questions 3, 5, 10, 11
Working with Graphs and Numbers 3, 6, 7
Chapter 9
Questions 1, 6, 16
Working with Graphs and Numbers 1, 9
Chapter 10
Questions 1, 4
Working with Graphs and Numbers 3, 4, 5
Chapter 11
Questions 1, 2, 5, 6
I. If you are having problems with any aspect of the class, PLEASE feel free to come talk to me. I am here
to help you.