Course Overview

This syllabus outlines the structure, policies, and academic expectations for ECON 2420: Principles of Microeconomics at Middle Tennessee State University. The course introduces students to the foundational concepts of microeconomics, focusing on the behavior of consumers and firms, market structures, and the impact of public policy on economic outcomes.

Course Description and Objectives

Microeconomics is the study of individual economic units, such as consumers and firms, and their interactions in various market settings. The course covers:

• Decision-making processes of consumers and firms

• Market structures: perfect competition, monopoly, monopolistic competition, and oligopoly

• Public policy and institutional influences on market efficiency

Learning Objectives:

• Understand and apply concepts of absolute and comparative advantage

• Analyze opportunity costs and gains from trade

• Identify and evaluate market equilibrium, demand, and supply factors

• Assess the effects of price regulations and market efficiency

• Calculate and interpret consumer and producer surplus

• Measure elasticity and its determinants

• Examine health care economics, firm behavior, and financial markets

• Evaluate the impact of international trade, tariffs, and quotas

• Analyze production, costs, and profit maximization in various market structures

• Apply game theory to oligopoly and strategic firm behavior

• Assess the causes and effects of monopoly power

Course Topics

The course is organized into twelve main topics, each corresponding to a chapter or set of chapters in the main textbook:

1. Comparative Advantage

2. Demand and Supply

3. Efficiency

4. Elasticity

5. Healthcare

6. Firms

7. Trade

8. Production

9. Perfect Competition

10. Monopolistic Competition

11. Oligopoly

12. Monopoly

Key Concepts and Definitions

Comparative and Absolute Advantage

• Absolute Advantage: The ability of an individual, firm, or country to produce more of a good or service with the same amount of resources than competitors.

• Comparative Advantage: The ability to produce a good or service at a lower opportunity cost than others.

• Opportunity Cost: The value of the next best alternative foregone when making a decision.

• Gains from Trade: The net benefits that agents realize from voluntary trading.

Example: If Country A can produce either 10 cars or 20 computers, and Country B can produce either 8 cars or 16 computers, both countries benefit by specializing in the good for which they have a comparative advantage and trading.

Demand and Supply

• Market Demand: The total quantity of a good or service demanded by all consumers at various prices.

• Market Supply: The total quantity of a good or service supplied by all producers at various prices.

• Market Equilibrium: The price and quantity at which quantity demanded equals quantity supplied.

Factors Affecting Demand: Income, prices of related goods, tastes, expectations, and number of buyers.

Factors Affecting Supply: Input prices, technology, expectations, number of sellers, and government policies.

Efficiency and Surplus

• Consumer Surplus: The difference between what consumers are willing to pay and what they actually pay.

• Producer Surplus: The difference between the price producers receive and the minimum they are willing to accept.

• Economic Surplus: The sum of consumer and producer surplus; a measure of market efficiency.

Formula for Economic Surplus:

Elasticity

• Price Elasticity of Demand: Measures the responsiveness of quantity demanded to a change in price.

• Formula:

• Determinants: Availability of substitutes, necessity vs. luxury, time horizon, and proportion of income spent.

Market Structures

• Perfect Competition: Many firms, identical products, free entry and exit.

• Monopolistic Competition: Many firms, differentiated products, some barriers to entry.

• Oligopoly: Few firms, interdependent decision-making, potential for collusion.

• Monopoly: Single firm, unique product, high barriers to entry.

Production and Costs

• Specialization: Focusing on a narrow range of tasks to increase efficiency.

• Diminishing Marginal Returns: As more units of a variable input are added to fixed inputs, the additional output from each new unit will eventually decrease.

• Production Costs: Total, average, and marginal costs associated with production.

Formula for Marginal Cost:

International Trade

• Effects on Market Equilibrium: Trade can shift supply and demand, affecting prices and quantities.

• Tariffs and Quotas: Government-imposed restrictions that affect trade flows and economic surplus.

Healthcare Economics

• Adverse Selection: When one party in a transaction has more information than the other, leading to market inefficiency.

• Moral Hazard: When one party takes more risks because they do not bear the full consequences of those risks.

Assessment and Grading

The course uses a combination of homework, discussion assignments, tests, and a cumulative final exam. The grading breakdown is as follows:

Grading Scale:

Course Schedule (Selected Dates)

Course Policies and Resources

• Attendance: Regular attendance and participation are required and monitored.

• Academic Integrity: Plagiarism, cheating, and fabrication are strictly prohibited and subject to disciplinary action.

• Disability Services: Reasonable accommodations are available through the Disability & Access Center.

• Technical Support: Assistance is available via the MTSU Help Desk.

• Tutoring: Free tutoring is available for economics and other subjects at the Tutoring Spot in Walker Library.

• Writing Center: Support for writing assignments is available through the MTSU Writing Center.

• Title IX: Resources and reporting for harassment, discrimination, and sexual violence are available.

• Counseling Services: Free counseling is available for students, faculty, and staff.

Course Materials and Access

• Main Textbook: Microeconomics by Hubbard & O'Brien (2024, 9th Edition)

• Supplementary Textbook: Principles of Microeconomics by Case, Fair, and Oster

• MyEconLab: Online homework and resources (access required)

• Lecture slides and additional materials available on Canvas

Assignments and Participation

• Read assigned textbook chapters and review lecture slides

• Attend in-person classes and view video lectures

• Complete homework and discussion assignments for each topic

• Participate in online discussions and respond to peers

• Complete three tests and a cumulative final exam

Communication and Netiquette

• Use institutional email for all course communications

• Follow guidelines for respectful and professional online and in-person interactions

• Participate actively in discussion groups and chats

Additional info:

• This syllabus provides a comprehensive overview of the course structure and expectations but does not include detailed content for each topic. Students are expected to consult the main textbook and lecture materials for in-depth study.

• Key formulas, definitions, and examples have been added to provide academic context for exam preparation.