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Course Description
Economics is the study of how people satisfy their wants in the face of
limited resources. There are two main branches of economics: macroeconomics
and microeconomics. Macroeconomics is concerned with economy-wide factors
such as inflation and unemployment. Microeconomics deals with the behavior
of individual households and firms. Students will study how households
make decisions about what goods to buy, and will also learn how firms
make decisions about what to produce and how to produce it. Examining
the behavior of households and firms will give students the necessary
insight to understand how the interaction between consumers' demands and
producers' supplies determines prices in the marketplace.
Economists use what they call “models” to examine various
principles of economics. In this course, students will develop economic
models that explain how markets determine prices in competitive markets.
Students will use these models to analyze the behavior of producers and
consumers. Students will also use models of "non-competitive"
behavior to explore economic principles such as monopoly and oligopoly,
and examine the role that government plays in a mixed economy.
Learning Objectives
After completing this course, students will be able to:
• Explain the role of the market mechanism in determining the prices
of goods and services in an economy
• Apply an economic model called supply and demand to individual
markets
• Describe the concept of market demand as it pertains to consumer
behavior
• Explain the basic constructs of the "theory of the firm,"
particularly the role of costs of production, and relate them to market
supply
• Analyze the extent of price competition in a market competitive
and monopoly models
• Assess the effects of "imperfect" price competition
on markets for goods and services
• Prepare an argument defending or opposing free international trade
• Analyze public policy issues such as minimum wage laws and rent
control legislations using welfare economics
• Design an economic policy related to an important issue, such
as the efficient reduction of environmental pollution
Breadth of Assignments
This course uses a variety of methods to explore the Principles of Microeconomics
including: textbook reading assignments, online presentations designed
to present the material in a way that the textbook cannot, web resources
provided to support particularly challenging subject matter, self-assessment
quizzes, collaborative projects involving problem-solving or discussions
with classmates, individual activities ranging from Java and Flash based
interactive exercises to writing assignments and case studies.
Required Resources
Mankiw, N. (2003). Principles of Microeconomics (3rd Edition). South-Western
College Publishers. ISBN 0-32-417188-9
A national/international newspaper or journal of your choice is strongly
suggested. The following are recommended: The Financial Times, The Wall
Street Journal, The Economist, The New York Times.
Module/Topics
Module 1: What is Economics
• The ten basic principles of economics
• Analyzing basic problems the way an economist would
• Constructing simple economic models
• The importance of opportunity cost in making choices among scarce
resources
Module 2: Economic Modeling and the Gains from Trade
• Interpreting graphs and calculate slope and elasticity
• The importance of omitted variables in determining causality
• Why economists generally favor free trade
• Comparative advantage
Module 3: Supply and Demand
• The features of a competitive market
• The law of demand
• The law of supply
• How supply and demand determine market price
• How changes in supply and demand affect equilibrium
Module 4: Elasticity
• Demand elasticity
• The factors that influence demand elasticity
• Income and supply elasticity
• How elasticity can be used to formulate sound public policies
Module 5: Government Policy Using Supply and Demand
• How price ceilings affect markets
• How price floors affect markets
• Specific instances of price ceilings and floors
• The effects of the minimum wage
• How taxes affect market outcomes
Module 6: Consumer and Producer Surplus
• Deriving consumer surplus from a demand curve
• The significance and application of consumer surplus
• Producer surplus
• Combining consumer and producer surplus to measure consumer welfare
• How markets maximize welfare
Module 7: International Trade
• Determine market equilibrium with and without trade
• The welfare effects of free trade
• The welfare effects of tariffs
• The arguments for and against free trade
Module 8: Externalities and Public Goods
• Positive and negative externalities
• Why many government policies designed to handle externalities
are inefficient
• Designing an efficient strategy to reduce pollution in your community,
state or at the national or global level
• Distinguishing a public good from a private good
• Why many enterprises, like public television, are under-funded
Module 9: Costs and Production
• The production function
• The different concepts of costs recognized by economists
• Determining and utilizing marginal cost
• The relationship between short run and long run costs
Module 10: Perfect Competition
• The assumptions of the model of perfect competition
• How competitive firms decide how much to produce
• The short run equilibrium for a perfectly competitive firm
• Predicting firm behavior in a competitive industry where profits
are too high or too low
Module 11: Monopoly
• The feature that characterizes all monopolies
• The components that determine the short run equilibrium of a monopolist
• The welfare costs of monopoly
• Regulations designed to control monopolists
• The Microsoft antitrust case
Module 12: Imperfect Competition
• The nature of imperfect competition
• Models of collusion and oligopoly
• Utilizing the prisoner's dilemma model to study collusion
• Monopolistic competition
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