ECON102: Introductory Microeconomics Analysis and Policy – Syllabus and Study Guide

Course Overview

This course provides an introduction to microeconomic analysis and policy, focusing on how individuals and firms make decisions, interact in markets, and how government policies affect these decisions. The course covers foundational models, market systems, efficiency, elasticity, market structures, and public policy issues.

Course Objectives

• Understand how households and firms make choices under scarcity.

• Analyze the determination of prices and quantities in markets.

• Evaluate the impact of government policies on market outcomes.

• Apply microeconomic concepts to real-world events and policy debates.

Major Topics and Chapters

• Economics: Foundations and Models – Introduction to economic thinking, opportunity cost, and the role of models in economics.

• Trade-offs, Comparative Advantage, and the Market System – Specialization, gains from trade, and the functioning of markets.

• Demand and Supply – Determinants of demand and supply, market equilibrium, and the effects of shifts in curves.

• Economic Efficiency, Government Price Setting, and Taxes – Consumer and producer surplus, price controls, and tax incidence.

• Externalities, Environmental Policy, and Public Goods – Market failures, government intervention, and the provision of public goods.

• Elasticity – Price elasticity of demand and supply, income elasticity, and cross-price elasticity.

• Firms, Production, and Costs – Short-run and long-run production, cost curves, and economies of scale.

• Market Structures – Perfect competition, monopoly, monopolistic competition, and oligopoly.

• Labor Markets and Income Distribution – Determination of wages, labor supply and demand, and income inequality.

Key Microeconomic Concepts

Scarcity and Opportunity Cost

• Scarcity: The fundamental economic problem of having limited resources to meet unlimited wants.

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

• Example: Choosing to attend college involves the opportunity cost of foregone earnings from working full-time.

Supply and Demand

• Law of Demand: As the price of a good increases, the quantity demanded decreases, ceteris paribus.

• Law of Supply: As the price of a good increases, the quantity supplied increases, ceteris paribus.

• Market Equilibrium: The point where quantity demanded equals quantity supplied.

• Equation:

$Q_d = Q_s$

• Shifts vs. Movements: Changes in non-price factors shift the curves; price changes cause movements along the curves.

Elasticity

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

• Equation:

$E_d = \frac{\%\ \text{change in quantity demanded}}{\%\ \text{change in price}}$

• Interpretation: If $|E_d| > 1$, demand is elastic; if $|E_d| < 1$, demand is inelastic.

Market Efficiency and Government Intervention

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

• Producer Surplus: The difference between the price received by sellers and their minimum acceptable price.

• Deadweight Loss: The loss of total surplus due to market distortions such as taxes or price controls.

Market Structures

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

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

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

• Oligopoly: Few firms, interdependent decision-making.

Comparison: Microeconomics vs. Macroeconomics

Division of Economics	Production	Prices	Income	Employment
Microeconomics	Production in individual industries and firms How much steel, cars, wheat, etc.	Price of individual goods and services Price of medical care, gasoline, food, apartments	Wages in the auto industry, salaries of accountants, rent on apartments	Employment in individual firms and industries Number of employees in a firm
Macroeconomics	Total industrial output Gross domestic product Growth of output	Aggregate price level Consumer price index Rate of inflation	National income Total wages and salaries	Employment and unemployment in the economy as a whole Total number of jobs

Course Policies and Expectations

• Active participation in class discussions and assignments is required.

• Assignments are due weekly; late submissions may incur penalties.

• Academic integrity is strictly enforced.

• Students are encouraged to apply economic reasoning to current events and real-world issues.

Assessment Overview

• Quizzes, midterms, and a final exam assess understanding of key concepts.

• Short essays require application of microeconomic analysis to news articles.

• Participation and homework contribute to the final grade.

Recommendations for Success

• Master economic vocabulary and practice using graphs and models.

• Engage with course materials, participate in discussions, and seek help when needed.

• Apply concepts to real-world examples for deeper understanding.

Additional info: This syllabus provides a comprehensive overview of the course structure, expectations, and main topics in introductory microeconomics, closely aligned with standard college-level microeconomics curricula.