Department of Economics
COURSE
Economics 6301 Applied Microeconomic Theory
Section 10 (CRN 16409)
Spring Semester 2017
Tompkins 301
Thursday, 3:40 to 5:30 p.m.
INSTRUCTOR
Name:
Campus Address:
E-mail:
Tel:
Twitter:
Office hours:
Dr. Joann M. Weiner
Monroe 370, Department of Economics
2115 G St., NW, Washington, DC 20052
[email protected]
(202) 994-6581
@DCEcon
I’ll use #gwu6301 for messages meant for our class
Tuesday from 3:45 to 5:30 and by appointment
TEACHING ASSISTANT
Name:
Feng Zhang
Email:
[email protected]
Discussion Section TBD
COURSE DESCRIPTION
The course covers the principal areas of microeconomic theory: consumer demand, decisionmaking under uncertainty, production and costs, game theory, product markets (both competitive
and imperfectly competitive, factor markets, and market failures). The course emphasizes
applying theory to microeconomic issues in the real work that interest the private and public
sectors. Examples include income inequality, product pricing, technological change, firm
behavior, social welfare costs of quotas and tariffs, monopoly and resource allocation, and job
market signaling.
PREREQUISITES
All students should have taken a course in microeconomics, which is a prerequisite for admission
to the graduate program, and at least one semester of calculus at the undergraduate level.
Students should also have taken Mathematical Methods for Economics (ECON 6300).
(Concurrent enrollment in Econ 6300 is allowed only with my permission.)
TEXT
I will use the following text as the main text: Walter Nicholson and Christopher Snyder,
Intermediate Microeconomics and Its Application, 12th ed., Cengage Learning, 2015. The text is
on reserve at Gelman Library to use while studying in the library.
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I will assign problems from the text used in Mathematical Methods for Economics (ECON
6300), Carl P. Simon and Lawrence Blume, Mathematics for Economists, W.W. Norton &
Company, Inc., 1994.
I will often refer to the technical material from the advanced Nicholson and Snyder text:
Microeconomic Theory. Basic Principles and Extensions, 11th edition, Cengage Learning, 2012.
This text overlaps the content of the first text with a mathematical treatment of microeconomics
and is a useful companion to the assigned text. Other good texts are Robert S. Pindyck and Daniel L.
Rubinfeld, Microeconomics, 8th ed., Pearson, 2013 and David Besanko and Ronald R. Braeutigam,
Microeconomics, John Wiley & Sons, Inc.
COURSE OBJECTIVES
By the end of the course, students should be able to apply microeconomic theory to analyze
consumer and producer behavior in several market structures and evaluate policy responses to
microeconomic questions.
LEARNING OUTCOMES
After successfully completing this course, students will be able to:
• use microeconomic tools such as constrained optimization, equilibrium analysis, and
comparative statics to analyze the economic behavior of individual economic decisionmakers, such as consumers, workers, and managers;
• characterize equilibria in perfectly and imperfectly competitive markets and be able to
analyze and explain the effects of government policies on consumer and producer
behavior, on social welfare, and on market equilibria;
• identify a research question, conduct a literature review, and set up the research
project; and
• present their research policy project to class, incorporate constructive feedback into their
own work, and undertake a critical review of their fellow students’ research.
AVERAGE MINIMUM AMOUNT OF INDEPENDENT, OUT-OF-CLASS, LEARNING
EXPECTED PER WEEK
In a 15-week semester, including exam week, you should expect to spend a minimum of 4 hours
a week for each hour of instruction. For a 2 ½ hour course, this means that you should expect to
study a minimum of 10 hours outside of class each week. As part of your independent work, you
should plan to spend at least two hours working on each reading assignment.
GRADING
• Homework and readings
• Quizzes (10% each quiz)
• Draft and final paper
• Presentation and questions
• Final
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10%
30%
20%
20%
20%
Homework and study groups: For homework, I’ll divide the class into study groups so that you
can work on the assignments together. This process allows you to share ideas and work until you
come up with the solution to the questions. Groups that meet in person tend to do better than
groups that work online. I encourage you to work together and with the graduate assistant to
come up with the correct answers. Choose one member in your group to compile and upload
your problem sets to Blackboard. I don’t accept photographs of your homework. Use a program,
such as CamScanner, to convert your document to a PDF.
The weekly problem sets are due by noon before class on the week after assigned (i.e., PSET 1
is due before class in week 2).
Readings: In addition to the problem sets, you must complete weekly readings that illustrate an
application of the week’s economic concept. I will assign one or more students to present one of
the papers to class; everyone else should be prepared to ask questions about the paper. You will
be graded on your presentation and on the questions you ask when you are not presenting.
Students may obtain copies of the articles through JSTOR. The quizzes and final may ask
questions from the readings, so you should read each of the assigned papers and be prepared to
answer questions about the readings. A detailed schedule of reading assignment is at the end of
the syllabus.
Quizzes: I will give four quizzes and drop the lowest quiz score so that each quiz will count for
10% of your grade. If you must miss a quiz, that quiz score will be the one I drop. I do not give
make up quizzes, so if you know that you will miss a quiz, please let me know well in advance
so we can make arrangements. Work assignments are not acceptable reasons to miss a quiz. You
will receive one point for submitting revisions to each quiz (upload to “Student submissions”
folder).
Draft and final paper: You will write a short paper on a microeconomic concept of your choice
and present your paper to class. Details on the format for the paper and the grading rubric are at
the end of the syllabus. Students will peer review the first draft of the paper and will be graded
on their review. I will also grade you on your draft.
Presentation and questions: You will present your research to the class. Your grade will
depend on how clearly you present your research, how you answer the questions posed by your
classmates, and on how well you incorporate the comments into your revised paper. You will
also be graded on the questions you pose to the presenter. Each student should be prepared to ask
at least one question of the student making a presentation.
Final exam: The final covers all of the material from the course.
Late work: You will receive a reduced score for work submitted after the due date.
Make-up exams: I don’t give make-up exams.
BEFORE THE FIRST CLASS
Please write a couple of paragraphs telling me why you are enrolled in the MA Applied
Economics program, what was your undergraduate major and why you chose it, your career
goals, and what you hope to get out of the MA program, and anything else you’d like to tell me
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about yourself. Please upload a copy to the “Student Submissions” folder on Blackboard and
bring a copy to the first class. You will receive credit for uploading this assignment.
UNIVERSITY POLICY ON RELIGIOUS HOLIDAYS
1. Students should notify faculty during the first week of the semester of their intention to
be absent from class on their day(s) of religious observance;
2. Faculty should extend to these students the courtesy of absence without penalty on
such occasions, including permission to make up examinations;
3. Faculty who intend to observe a religious holiday should arrange at the beginning of
the semester to reschedule missed classes or to make other provisions for their courserelated activities.
For GW’s teaching policies, see http://www.gwu.edu/~academic/Teaching/main.htm
ACADEMIC INTEGRITY
I personally support the GW Code of Academic Integrity. It states: “Academic dishonesty is
defined as cheating of any kind, including misrepresenting one's own work, taking credit
for the work of others without crediting them and without appropriate authorization, and
the fabrication of information.” Please note that allowing another student to copy your work
is defined as cheating under the Academic Integrity code.
Common examples of academically dishonest behavior include, but are not limited to
1) Cheating
2) Fabrication
3) Plagiarism
4) Falsification and forgery of University academic documents
5) Facilitating academic dishonesty
Sanctions range from failure of the assignment, to failure of the course, to suspension or
expulsion
from
the
University.
For
the
remainder
of
the
code,
see:
http://www.gwu.edu/~ntegrity/code.html
SUPPORT FOR STUDENTS OUTSIDE THE CLASSROOM
DISABILITY SUPPORT SERVICES (DSS)
Any student who may need an accommodation based on the potential impact of a disability
should contact the Disability Support Services office at 202-994-8250 in the Marvin Center,
Suite 242, to establish eligibility and to coordinate reasonable accommodations. For additional
information please refer to: http://gwired.gwu.edu/dss/
Students must make arrangements with the DSS office well in advance of needing the service.
UNIVERSITY COUNSELING CENTER (UCC) 202-994-5300
The University Counseling Center (UCC) offers 24/7 assistance and referral to
address students' personal, social, career, and study skills problems. Services for students
include:
- crisis and emergency mental health consultations
- confidential assessment, counseling services (individual and small group), and referrals
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http://gwired.gwu.edu/counsel/CounselingServices/AcademicSupportServices
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Guidelines for Presentation and paper
The objective of the presentation and paper is for you to apply the tools you have developed in your
applied microeconomics class to analyze a microeconomic issue of your choice. The readings you have
evaluated during the semester provide good examples of how to apply micro theory to an economic issue.
Completing this exercise will help you develop the skills to identify a research question, construct an
economic hypothesis, apply the theory to the question, and identify and describe the data that you would
use to answer your question. (A full paper would also conduct an econometric analysis of the data, but
that exercise is left to your econometrics course).
Before starting your research, read this paper! Hal R. Varian, “How to Build an Economic model in
Your Spare Time,” University of California, Berkeley, December
1994. http://people.ischool.berkeley.edu/~hal/
Papers should be well-written – meaning in good English with no typos or grammatical errors - and be no
longer than 8 pages (with normal margins and type face), excluding references. You must email me your
research question no later than before class in the 7th week of class and submit a first draft of your
paper to BB no later than the 10th week of class (bring 2 copies of your draft paper to class). You
must give me your final copy and the marked up drafts of your paper no later than the last week of
class.
Follow the guidelines in The Journal of Economic Perspectives for preparing your tables, charts, and
references. See the paper on “Technological Change and Inequality” from the Journal of Economic
Literature (JEL) for an example. The JEL, EconLit and JSTOR are good sources for ideas. Read the
abstracts of the papers to see whether the research is relevant to your question.
Students will peer review and grade the first draft of the paper according to the guidelines in the
grading rubric. I will grade your final paper on the quality of your research and writing and on how
effectively you incorporate comments from class and your peers, and on how well you follow these
guidelines.
Students will make presentations during the last two weeks of class. I will grade you on your
presentation and on how well you answer questions posed from your classmates.
Your applied research paper should have the following sections:
1. An introduction that presents your question and why this question is important. It should be
explicit and be narrowly-focused so that you can address it in the page limit given for this
assignment.
2. A brief literature review/discussion of previous work of relevant papers on the topic and discuss
how your paper extends this body of knowledge.
3. At least three charts/tables/diagrams that summarize the data and present the question that you are
addressing.
4. A description of the theory that applies to your question. This section should include a few
mathematical equations that illustrate your theory and/or model.
5. A discussion of the data that you would use in an empirical analysis and an econometric
specification, including a description of your dependent and independent variables, why they
belong in your model, and the impact you expect them to have on your independent variable. If
you were doing your own empirical research, you would conduct an econometric analysis. Do not
do an econometric analysis.
6. A brief conclusion that summarizes what you learned and areas for future research.
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Title:
Author:
Discussant:
GRADING RUBRIC for APPLIED MICROECONOMICS PAPER (note: Students will fill out the column on the Draft Paper
and I will fill out the column on the Presentation. Indicate N/A where the issue is not available)
Issue
1.
Description of the
question
2.
Literature
review/Previous
studies
3.
Theory
4.
Analysis
5.
Economic content
6.
Charts and Tables
7.
Asking and
answering questions
8.
Outline
9.
References
10. Overall
General comments
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Score (out of 10)
PresentDraft
ation
Paper
Comments
ASSESSMENT RUBRIC for the FINAL PAPER
Excellent
A (94-100)
Project
Overall
organization
Description
of the
question
Literature
Review
Theory
Data
Econometric
Specification
Analysis
Economic
content
Charts and
Tables
References
Comments:
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Thorough,
well
reasoned,
creative,
sophisticated
, exceptional
scholarly or
practical
quality
Very Good
A(90-93)
Strong
understanding of material
and analytical
approaches;
meets
professional
standards
Good
B+
(86-89)
Sound work
with some
weaknesses
wellreasoned
without
serious
analytical
shortcomings
Adequate
B
(83-85)
Competent
work with some
weaknesses;
understanding
or application
of some
important ideas
is incomplete
Fair
B(80-82)
Weak but
meets minimal
expectations,
understanding, analysis, or
application is
incomplete
Deficient
C+/C/CLess than 80
Inadequate work,
doesn’t meet
minimal
expectations;
work is poorly
developed and is
flawed by errors
and
misunderstanding of important
issues
ECON 6301 Schedule of assignments (subject to change)
Problem sets are due on Blackboard before class the week after they are assigned. Problems are from
Nicholson and Snyder Intermediate Microeconomics and its Application (N&S) and Simon and Blume
Mathematics for Economists (S&B).
The reading is listed for the week in which it will be presented. I will present the paper for week 1 and on
quiz days and student groups will present the readings marked with * on the other weeks.
Week
1
Jan 19
Problems/Quiz
N&S: Ch 1 1.8, 1.10;
Ch 2 2.3, 2.4, 2.6, 2.9,
2.10
S&B: 2.9, 2.11 (c, e, g,
j, k), 2.
2
Jan 26
Readings
*Daron Acemoglu, “Technical Change, Inequality, and the Labor
Market,”
Journal of Economic Literature Vol. 40, No. 1 (Mar., 2002), pp. 7-72.
(Read through section 4)
* Review: What Does Human Capital Do? A Review of Goldin and
Katz's "The Race between Education and Technology"
Review by: Daron Acemoglu, David Autor Journal of Economic
Literature,
Vol. 50, No. 2 (June 2012), pp. 426-463. (You can skip section 4)
N&S: Ch 3 3.4, 3.5,
3.8, 3.9
S&B: 3.1 (a, f), 3.9 (a,
d), 3.10, 3.19, 14.5,
14.6
QUIZ 1 Ch 1-3
* What is the Price Elasticity of Housing Demand?
Eric A. Hanushek and John M. Quigley
The Review of Economics and Statistics
Vol. 62, No. 3 (Aug., 1980), pp. 449-454
4
Feb 9
N&S: Ch 4 4.3, 4.4,
4.9
S&B: 4.2, 4.8, 6.8,
22.10, 22.11
5
Feb 16
N&S: Ch 5 5.5, 5.7,
5.10
S&B: 5.5, 5.6, 5.8
6
Feb 23
QUIZ 2 CH. 4-6
* Crime and Punishment: An Economic Approach
Gary S. Becker
Journal of Political Economy
Vol. 76, No. 2 (Mar. - Apr., 1968), pp. 169-217 (read just a few pages
to get the idea of his argument.)
* To Bargain or Not To Bargain: That Is The Question
Harvey E. Lapan and Todd Sandler
The American Economic Review
Vol. 78, No. 2, Papers and Proceedings of the One-Hundredth Annual
Meeting of the American Economic Association (May, 1988), pp. 16-21
* The Engineering Approach to Economic Production Functions
Revisited: An Application To Solar Processes,
G. Thomas Sav
The Journal of Industrial Economics
Vol. 33, No. 1 (Sep., 1984), pp. 21-35
3
Feb 2
N&S: Ch 6 6.3, 6.5,
6.8, 6.10,
7
Mar 2
Ch 7 7.2, 7.6, 7.8
S&B:3.15, 3.17, 6.3,
18.12, 18.17
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* The U.S. Equity Return Premium: Past, Present, and Future
J. Bradford DeLong and Konstantin Magin
The Journal of Economic Perspectives
Vol. 23, No. 1 (Winter, 2009), pp. 193-208
* Optimal Scale and the Size Distribution of American Trucking Firms
Roger Koenker
Journal of Transport Economics and Policy
Vol. 11, No. 1 (Jan., 1977), pp. 54-67
ECON 6301 Schedule of assignments (subject to change)
Problem sets are due on Blackboard before class the week after they are assigned. Problems are from
Nicholson and Snyder Intermediate Microeconomics and its Application (N&S) and Simon and Blume
Mathematics for Economists (S&B).
The reading is listed for the week in which it will be presented. I will present the paper for week 1 and on
quiz days and student groups will present the readings marked with * on the other weeks.
8
Mar 9
N&S Ch 8 8.2, 8.6, 8.8
S&B 3.22, 14.4, 17.4
9
Mar 23
QUIZ 3 Ch 7-9
N&S Ch 9 9.2, 9.4,
9.7, 9.10;
10
Mar 30
S&B 14.7, 14.14
N&S Ch 10 10.6, 10.9
S&B 22.17, 22.22
11
Apr 6
N&S Ch 11 11.2, 11.7,
11.8, Ch 12 12.1, 12.3,
12.9
S&B 3.21, 15.27, 17.6
* U.S. Industry Adjustment to Economic Deregulation
Clifford Winston
The Journal of Economic Perspectives
Vol. 12, No. 3 (Summer, 1998), pp. 89-110
* Welfare Costs of U.S. Quotas in Textiles, Steel and Autos
Jaime de Melo and David Tarr
The Review of Economics and Statistics
Vol. 72, No. 3 (Aug., 1990), pp. 489-497
* Policy Watch: Trade Adjustment Assistance
Katherine Baicker and M. Marit Rehavi
The Journal of Economic Perspectives
Vol. 18, No. 2 (Spring, 2004), pp. 239-255
* A Disneyland Dilemma: Two-Part Tariffs for a Mickey Mouse
Monopoly
Walter Y. Oi
The Quarterly Journal of Economics
Vol. 85, No. 1 (Feb., 1971), pp. 77-96
12
Apr 13
QUIZ 4 Ch 10-12
* The Market for "Lemons": Quality Uncertainty and the Market
Mechanism
George A. Akerlof
The Quarterly Journal of Economics
Vol. 84, No. 3 (Aug., 1970), pp. 488-500
13
Apr 20
N&S Ch. 13 13.2,
13.4, 13.10
* Minimum Wages and Employment: A Case Study of the Fast-Food
Industry in New Jersey and Pennsylvania
David Card and Alan B. Krueger
The American Economic Review
Vol. 84, No. 4 (Sep., 1994), pp. 772-793
Student presentations
14
Apr 27
Student presentations
10 | P a g e
* Revisiting the Minimum Wage-Employment Debate: Throwing Out
the Baby with the Bathwater?
David Neumark, J.M. Ian Salas, William Wascher
NBER Working Paper No. 18681, January 2013
*Hal R. Varian, “How to Build an Economic model in Your Spare
Time,” University of California, Berkeley, December 1994.