ECON 201-03: PRINCIPLES OF MICROECONOMICS
Fall 12-week, 2008
INSTRUCTOR:
Dr. Uğur Aker
(To remember the first name, think of SEWER and drop the “S”; to
pronounce the second name, say “I CARE” with a southern accent!)
TIME and PLACE:
MWF 2:45-4:05
Hinsdale 203
OFFICE:
113 Hinsdale
OFFICE HOURS:
T 2:00 - 5:00; and by appointment.
If it is important, please make an appointment. Please feel free to stop by my office to
clarify concepts, argue against my opinion, glorify or condemn economics, etc.
PHONE:
569-5142 office
569-3494 home (Please no calls after 10 PM)
INTERACTION:
My e-mail is: [email protected]. This syllabus and lecture notes will be posted in my
web site: http://home.hiram.edu/www/econ. If you forget the address, you can still get to
it from the internal Hiram College web page (home.hiram.edu) by clicking on Economics
under Academic Departments on the left hand side.
The textbook has its own web site ; I expect you to use these web sites extensively.
http://highered.mcgrawhill.com/sites/0073193984/student_view0/index.html
Make sure you have access to the Student Supplements on the web.
I communicate through e-mail. If you don’t check your e-mail, make sure your friends
convey to you any important messages, for example change of a test date. Have a
network that transmits information. “I didn’t check my e-mail is not a legitimate excuse!”
I. COURSE DESCRIPTION:
Microeconomics is the basis of economic thinking. It is in microeconomic models where the individual
decision-making is grounded. Even though we know individuals sometimes make irrational choices, we
still think enough of them act rationally to warrant the use of logic as the guiding principle for choice.
Because resources available to decision-makers are limited (even Bill Gates is constrained by time) the
infinite choices one can make have to be prioritized. The course will use the basic measure of efficiency of
comparing additional benefits to additional costs as the rule for decision-making. And this applies to
individuals, firms, and governments.
Along with the rational choice to be undertaken by consumers, firms, and governments, Principles of
Microeconomics course will also provide a rough framework of market environments within which these
entities function and will evaluate the efficiency consequences of each. Of course, the course will also
highlight the cases where even the most efficient markets fail to provide optimal societal results. In these
cases, collective decision-making (political intervention) will be necessary. But these interventions also
have to follow the basic rule of efficiency.
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Dr. Uğur Aker
II. GOALS AND OBJECTIVES
This course is a requirement for Economics majors and minors, Accounting majors, and Management
majors.
Principles of Microeconomics course will provide a basic understanding to comprehend the economic news
about firms, profits, wages, product and labor markets, trade, government regulations that bombard us
everyday in all kinds of media. The better we can evaluate the news, the more enlightened choices we can
make as responsible citizens for ourselves, our families, our communities, our fellow humans and other
living organisms.
In this introductory course, one will get a taste of basic economic thinking, sense of economic logic and its
connection to mathematics, consumer behavior, firm behavior, types of markets buyers and sellers operate
in, exchange and its contribution to well-being. The last item includes international trade.
University of Wisconsin – Madison economist W. Lee Hansen has delineated economics proficiencies an
economics major should have at the end of her undergraduate education (W. Lee Hansen. "Expected
Proficiencies for Undergraduate Economic Majors," Journal of Economic Education, Summer 2001, pp.
231-242). The article can be summarized as follows:
How To Access Existing Knowledge
Retrieve information on issues
Micro
Macro
Locate published research
Micro
Macro
Track down economic data
Micro
Macro
Find data sources
Micro
Macro
Find information on generation, construction and meaning of data
Micro
Macro
Explain key economic concepts
Micro
Macro
Write a summary of a published article
Micro
Macro
Displaying Command of Existing Knowledge
Macro
Current condition of the economic outlook
Summarize principal ideas of a prominent economist
Micro
Macro
Elaborate a recent controversy in the literature
Micro
Macro
State dimensions of a current policy issue
Micro
Macro
Micro
Macro
Interpret Existing Knowledge
What economic concepts are used in the media presentations?
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Dr. Uğur Aker
Interpret and Manipulate Economic Data
Interpret Tables
Micro
Macro
Identify patterns
Micro
Macro
Construct tables
Micro
Macro
Describe the relationship between three economic variables
Micro
Macro
Perform and interpret a regression analysis
Micro
Macro
Analysis of a current economic problem (5 pp)
Micro
Macro
Prepare a memorandum (2 pp) that recommends action on a policy issue
Micro
Macro
Costs and benefits of a policy issue (4 pp)
Micro
Macro
Formulate questions that illuminate an issue that needs to be researched
Micro
Macro
Prepare a proposal (4-6 pp) for a research project
Micro
Macro
Conduct a research study (20-40 pp)
Micro
Macro
Conduct a group research project with a report
Micro
Macro
Apply Existing Knowledge
Create New Knowledge
This course aims to fulfill some of these proficiencies; assignments and tests will require accessing,
displaying, and interpreting the existing knowledge. However, as an extra credit for the ambitious, you can
prepare a term project and the more proficiencies you display in the project the more credit you will get.
See below for more information.
III. COURSE EXPECTATIONS
1.
TEXTS:
Frank, Robert H. and Ben S. Bernanke, Principles of Microeconomics, Third edition. (McGraw-Hill
Irwin: Boston, 2007). Required.
2.
ASSESSMENT:
There will be quizzes, assignments and tests. Most of the quizzes and assignments will utilize the web
site of the book. There will be no term paper except for those who wish extra credit (see Extra Credit:
IV.6). I have scheduled a test roughly every other week covering 2-4 chapters. Each test will carry
equal weight except the Final, which will count as two tests.
3.
ATTENDANCE:
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Dr. Uğur Aker
You are required to attend all classes. If you miss a class, your grade for the course is reduced by
0.33%. Three absences would lower your grade, say, from 87 to 86, or, from B+ to B! Knowing that
some -- maybe all -- absences can be the consequence of unforeseen circumstances, I do allow you to
make-up absences. Convocations, lectures, symposiums, articles about macroeconomics, unassigned
questions at the end of the chapter may be ways of writing a page to erase an absence. You will have a
week to erase the absence.
Remember, College is not just going to classes and doing the assignments. Please utilize as many opportunities
available for you here as you can. Once you are out of college and working and raising a family your options for
grabbing opportunities will be severely curtailed. Go to as many convocations, concerts, plays, etc. as you can.
Some of the happenings during the Spring Semester are listed under Calendar in Hiram College's home page.
IV. ASSESMENT AND EVALUATION
1. GRADE DISTRIBUTION:
95 - 100 A
87 - 90 B+
79 - 80 B71 - 74 C
63 - 66 D+
55 - 58 D-
V.
91 - 94
83 - 86
75 - 78
67 - 70
59 - 60
0 - 54
AB
C+
CD
F
2.
TESTS
There are seven tests scheduled including the Final, which counts double. The sum of the tests will
comprise 90% of the grade.
3.
HOMEWORK ASSIGNMENTS
For each question answered, you will get a check. To fully get the 9% of the grade, you have to turn in
at least 75 questions/problems. The extras will serve as extra credit. Homework assignments are best
tackled collectively. I do encourage you to work in a group and discuss the problem. However,
plagiarism is a very serious offence and academic honesty is the basis of our trust for knowledge.
Therefore, you should work together but should not submit the same answer, format, and language in
your assignment. After discussing the problem and the way to answer it, I want each person,
individually, to write it in their own words.
4.
QUIZZES
There may be occasional quizzes if we decide collectively that it would serve a positive purpose.
5.
ATTENDANCE
Attendance is mandatory. Each absence will cost you 0.33% of your final grade. See III3 above.
6.
EXTRA CREDIT
I am told that some people “hate” economics or find economic reasoning “unintelligible.” I am willing
to concede this possibility but economics, like all other sciences, uses logic to build the models that
capture reality. Logic (and its formal sister mathematics) have served humanity well in terms of
understanding the universe – both cosmic and minute. If for some reason, my tests do not capture your
understanding and commitment to this course, or you want to do more, I will allow you to engage in a
project that will earn you extra credit. I have to approve the project before you start it. The more
proficiencies (see II) you demonstrate in the project, the more extra credit you will get. Make sure to
read the Academic Honesty section in this syllabus before you do your project.
ASSIGNMENTS
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Dr. Uğur Aker
The assignment for each chapter is due two days after I finish covering a chapter. You will get credit for
turning the assignment in.
The Review Questions and Problems at the end of each chapter comprise your assignments. If you were to
do them all, you would have answered over two hundred questions. I only require 75. Any extras you
submit will enhance your grade. I will let you choose which questions you want to answer. However, the
more time you spend on these, the better prepared you will be for the tests.
VI.
RESOURCES
1.
TEACHING ASSISTANTS
There will be a couple of Economics majors who can help you with the subject.
2. INTERNET
Here are some web sites related to economics. Your best bet is to go to http://library.hiram.edu/sub_econ.htm (there
is a _ between sub and econ) and browse the economics links.
Federal Reserve sites:
http://www.federalreserve.gov/
http://www.stls.frb.org/fred/
http://www.frbsf.org/
http://www.phil.frb.org/
http://www.bos.frb.org/
http://www.dallasfed.org/
http://www.frbatlanta.org/
http://www.rich.frb.org/
http://www.clev.frb.org/
http://www.kc.frb.org/
http://www.chicagofed.org/
http://www.kc.frb.org/fed101/
http://www.newyorkfed.org/
http://woodrow.mpls.frb.fed.us/econed/class/econsite.html
US Government sites:
http://www.bea.doc.gov/
http://www.govspot.com/
http://stats.bls.gov/eag/eag.us.htm?H1
http://www.fedstats.gov
http://www.census.gov
http://stats.bls.gov/blshome.html
http://www.irs.ustreas.gov/prod/tax_stats/index.html
http://gopher.cbo.gov:7100/1/reports/online
http://www.access.gpo:gov/su_docs/budget98/maindown.html
http://www.whitwhouse.gov/fsbr/esbr.html
World Bank:
http://www.worldbank.org/poverty/wdrpoverty/
http://www.worldbank.org/
http://www.worldbank.org/research/growth/ http://rsqe.econ.lsa.umich.edu/
Private informational:
http://economics.miningco.com/
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http://www.economics.ltsn.ac.uk/interneteconomist/index.htm
http://www.economist.com/markets/
http://www.economist.com/
http://www.swcollege.com/bef/mceachern/economist.html
http://www.fool.com/index.htm
http://econlinks.com/
http://www.marietta.edu/~delemeeg/expernom.html
http://www.economagic.com/
http://www.economicsearch.com/
http://www.globalexposure.com
http://fairmodel.econ.yale.edu
http://netec.wustl.edu/JokEc.html
http://wconwpa.wustl.edu/econFAQ.html
http://www.orst.edu/Dept/pol_sci/sahr/
http://www.NewsEngin.com/neFreeTools.nsf/CPIcalc
http://www.oecd.org
http://www.oanda.com/cgi-bin/ncc
http://govinfo.kerr.orst.edu/cffr_stateis.html
http://garnet.berkeley.edu:3333/budget/budget.html
Government web pages provide a wealth of information. You can access those related to economics and business by
going to the library web page from Hiram's web site and clicking on the Government
documents and scrolling down to "Economics/Business."
VII. SCHEDULE:
WEEK
MONDAY
Aug 25-29
Sep 1-5
Sep 8-12
Sep 15-19
Sep 22-26
Sep 29 Oct 3
Oct 6-10
Oct 13-17
Oct 20-24
Oct 27-31
Nov 3-7
Nov 9-13
Nov 16-20
Labor Day
Ch. 3
Ch. 4
Ch. 6
Ch. 7
Ch. 8
Ch. 9
Test Ch. 9
Ch. 11
Ch. 12
Ch. 14
Ch. 15
WEDNESDAY
Ch. 1 and 2
Ch. 3
Ch. 4
Ch. 6
Ch. 7
Ch 9
Ch. 10
Ch. 11
Ch. 12
Ch. 13
Ch. 14
Ch. 16
FRIDAY
Getting acquainted.
Ch. 2
Test Ch. 1-2
Ch. 5
Test Ch. 3-5
Ch. 8
Test Ch. 6-8
Ch. 10
Fall Weekend
Test Ch. 10-11
Ch. 13
Test Ch. 12-13
Ch.16
FINAL: Monday, November 24, 2008 at 9:00 am: Chapters 14-16 and AP Test.
AP MICROECONOMICS EXAMINATION CONTENT SPECIFICATIONS
I.
Basic Economic Concepts (8-14%)
A. Scarcity, choice, and opportunity cost
B. Production possibilities curve
C. Comparative advantage, specialization, and trade
D. Economic systems
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Dr. Uğur Aker
E. Property rights and the role of incentives
F. Marginal analysis
II.
The Nature and Functions of Product Markets
(50-70%)
A. Supply and demand
(15-20%)
1. Market equilibrium
2. Determinants of supply and demand
3. Price and quantity controls
4. Elasticity
a.
Price, income, and cross-price elasticities of demand
b.
Price elasticity of supply
5. Consumer surplus, producer surplus, and market efficiency
6. Tax incidence and deadweight loss
B. Theory of consumer choice
(5-10%)
1. Total utility and marginal utility
2. Utility maximization: equalizing marginal utility per dollar
3. Individual and market demand curves
4. Income and substitution effects
C. Production and costs
(10-15%)
1. Production functions: short and long run
2. Marginal product and diminishing returns
3. Short-run costs
4. Long-run costs and economies of scale
5. Cost minimizing input combination
D. Firm Behavior and Market Structure
(25-35%)
1.
Profit:
a.
Accounting versus economic profits
b.
Normal profit
c.
Profit maximization: MR=MC rule
2. Perfect competition
a.
Profit maximization
b.
Short-run supply and shutdown decision
c.
Firm and market behaviors in short-run and long-run equilibria
d.
Efficiency and perfect competition
3. Monopoly
a. Sources of market power
b. Profit maximization
c. Inefficiency of monopoly
d. Price discrimination
4. Oligopoly
a. Interdependence, collusion, and cartels
b. Game theory and strategic behavior
5. Monopolistic competition
a.
Product differentiation and role of advertising
b.
Profit maximization
c.
Short-run and long-run equilibrium
d.
Excess capacity and inefficiency
III. Factor Markets (10-18%)
A. Derived factor demand
B. Marginal revenue product
C. Labor market and firms’ hiring of labor
D. Market distribution of income
VIII. DISCLAIMER
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Dr. Uğur Aker
Plans are wishes. Not all wishes do come true. Those with the wisdom of ages warn us about the curse of
wishes that do come true. We may change parts of this syllabus as we see fit in the course of the semester.
For the sake of participatory democracy, I promise to include the class in the decision-making before I make
any changes.
ACADEMIC HONESTY (Hiram College Catalog, October 29, 2002)
Hiram College believes that the development of intellectual honesty is at the heart of a college education. The process
of education is severely compromised if we cannot depend on the academic integrity of each member of the community.
Moreover, the principles of academic honesty are aligned closely with the principles of good scholarship and research, principles
of critical thinking and reasoning, and the standards of professional ethics. Thus, students who fail to practice academic honestly
not only risk losing the trust of the academic community; they also fail to develop the most essential skills and abilities that
characterize a college graduate.
Any student who violates the integrity of the academic process will be subject to punishment, including possible
dismissal from the College. There are many forms of academic dishonesty including the giving or receiving of help in any form
on an examination, the sale or purchase of papers and test materials, the abuse of computer privileges and regulations, the misuse
or abuse of library resources, and any other action which debases the soundness of the educational process. Faculty members and
librarians are expected to report all instances of academic dishonesty to the Associate Dean of the College who will provide
advice on an appropriate action.
Plagiarism
The most common form of academic dishonesty is plagiarism. An essay or term paper is designed to develop a
student’s own ability to think clearly and critically about a subject and to express ideas fluently. Similarly, a laboratory report is
designed to develop a student’s capacity to record observed phenomena and to interpret them correctly. A creative work in the
arts is intended to demonstrate the student’s own creative abilities. If a student corrupts these purposes by receiving
unacknowledged assistance from a written source, he or she is guilty of plagiarism.
To avoid any suspicion of plagiarism, students should acknowledge any work not their own; in other words, any
language, illustration, information, or diagram which is not original must be documented. Students are urged to visit the Writing
Center for help in understanding these guidelines.
Hiram College expects students to develop a thorough understanding of what constitutes plagiarism and to avoid it in
all forms of campus communication. When plagiarism occurs in work submitted for a grade in a course, it is particularly serious
and becomes a reportable offense. There are two categories of such offenses. Category I includes instances of plagiarism in which
there is clear intent to falsify, mislead, or misrepresent another’s work as one’s own. An obvious example would be an attempt to
hide the source of plagiarized material by not even including it in the paper’s bibliography. Category II includes instances in
which there is not clear intent. Instead, there is evidence that the student made a simple mistake in citation, or did not fully
understand what constitutes plagiarism.
The process for dealing with cases of plagiarism is intended to facilitate the development of the student as a scholar
who practices academic honestly. First offenses usually involve some penalty, depending on severity. Students are expected to
learn from these mistakes and, therefore, there is less tolerance for subsequent offenses.
Cases of plagiarism are handled in the following ways:
• The course instructor judges whether the offense is Category I or II.
• All cases of plagiarism are reported to the Associate Dean of the College who will maintain a database of plagiarism cases.
• For first-offense, Category II cases involving an underclass (not senior) student, the course instructor has the option of allowing
a makeup of the paper or assignment, or a penalty. These cases do not require a conference with the Associate Dean and the
student. All other cases require a conference with the Associate Dean.
• Category I cases, even if first offense, may result in an F in the course.
• A pattern of Category II offenses, or any second-offense, will usually result in a suspension from the College.
• Records of plagiarism are kept by the Associate Dean. The student’s advisor (for traditional students) or the Weekend College
Dean (for WEC students) is informed of the results of plagiarism cases.
• Appeals of plagiarism case decisions may be made to the Dean of the College.
Special Note on Collaborative Work
Students must assume that collaboration in completion of assignments is prohibited unless explicitly specified by the
instructor. Students must acknowledge any collaboration and its extent in all submitted work. This applies to collaboration on
editing as well as collaboration on substance. (This statement is not intended, however, to discourage students from forming
study groups.)
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