Microeconomics 1201: Course Syllabus and Study Guide

Course Overview

Introduction to Microeconomics

This course provides an introduction to the fundamental principles of microeconomics, focusing on how individuals and businesses make decisions regarding the allocation of scarce resources. Students will explore market mechanisms, the role of government, and the impact of economic policies on society.

• Key Texts: Principles of Microeconomics by Hubbard & O'Brien; Naked Economics by Charles Wheelan.

• Supplementary Readings: Selected articles from The Wall Street Journal, The Economist, and other publications.

Scope and Objectives of the Course

Course Goals

The course aims to provide students with a solid foundation in microeconomic theory and its real-world applications. Students will learn to analyze economic problems, understand market outcomes, and evaluate the effects of public policy.

• Understand the basic principles of microeconomics, including scarcity, opportunity cost, and trade-offs.

• Analyze how markets function and how prices are determined.

• Evaluate the impact of government intervention in markets.

• Apply economic reasoning to current events and policy debates.

Course Structure and Grading

Assessment Components

• Homework: 20% of grade (completed online via MyEconLab)

• Quizzes: 30% of grade (administered online, may be timed)

• Midterm Exam: 20% of grade (held in the main lecture class)

• Final Exam: 30% of grade (cumulative, date set by Registrar)

• Extra Credit: Up to 5% (conducted online)

Grading Scale:

Grade	Letter Grade	GPA
92-100	A	4.0
90-91	A-	3.7
87-89	B+	3.3
82-86	B	3.0
80-81	B-	2.7
77-79	C+	2.3
72-76	C	2.0
70-71	C-	1.7
67-69	D+	1.3
62-66	D	1.0
60-61	D-	0.7
0-59	F	0.0

Course Topics

Weekly Breakdown

• Weeks 1-2: Introduction: Way of Thinking, Exchange, and Gains from Trade; Supply and Demand

  • Key Concepts: Scarcity, Opportunity Cost, Comparative Advantage, Market Equilibrium

  • Formula: $Q_d = Q_s$ (Equilibrium where quantity demanded equals quantity supplied)

• Weeks 3-4: Elasticity

  • Price Elasticity of Demand: Measures responsiveness of quantity demanded to price changes.

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

  Special Topic: The Economics of the Shared Economy

• Weeks 4-5: Consumer and Producer Surplus, Price Controls, and Taxes

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

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

  • Price Controls: Government-imposed limits on prices (e.g., price ceilings and floors).

  • Taxes: Effects on market equilibrium and welfare.

  Special Topic: Price Controls and Minimum Wages: Global Perspectives

• Weeks 5-6: Externalities and Public Goods

  • Externality: A cost or benefit imposed on third parties not involved in a transaction.

  • Public Good: Non-excludable and non-rivalrous good (e.g., national defense).

  • Formula for Externality Correction: $\text{Social Cost} = \text{Private Cost} + \text{External Cost}$

  Special Topic: The Economics of Climate Change

• Weeks 7-8: Information and Health Care Economics

  • Asymmetric Information: When one party has more or better information than the other.

  • Adverse Selection and Moral Hazard: Problems arising from information asymmetry.

• Weeks 9-10: Firms, Production Costs, and Price Takers

  • Firm: An organization that transforms inputs into outputs for profit.

  • Production Function: $Q = f(L, K)$, where $Q$ is output, $L$ is labor, $K$ is capital.

  • Price Taker: A firm that cannot influence market price and must accept the equilibrium price.

• Weeks 11-13: Market Structures: Perfect Competition, Monopoly, Oligopoly, and Monopolistic Competition

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

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

  • Oligopoly: Few firms, interdependent decision-making.

  • Monopolistic Competition: Many firms, differentiated products.

  • Formula for Monopoly Pricing: $MR = MC$ (Monopolist sets marginal revenue equal to marginal cost)

  Special Topic: Are Google, Microsoft, Amazon, and Facebook (Meta) Monopolists? Should they be regulated or split into smaller companies?

• Week 15: Public Choice and the Economics of Public Decision Making

  • Public Choice: Application of economic principles to political processes.

  • Analysis of government decision-making and policy outcomes.

Academic Integrity and Student Responsibilities

• Academic Integrity: Students must adhere to the university's code of conduct regarding honesty and plagiarism.

• Accommodations: Support is available for students with documented disabilities.

• Communication: Professional and respectful communication is expected in all course interactions.

• Absences: Reasonable accommodations are made for religious observances and extra-curricular activities.

Support and Resources

• Office Hours: Mondays and Wednesdays, 5:00 pm – 6:00 pm, or by appointment.

• Digital Learning Center: Support for online learning and technical issues.

• Additional Resources: Academic integrity guides, library research tools, and writing resources.

Key Definitions and Concepts

• 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 decision.

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

• Elasticity: A measure of how much one economic variable responds to changes in another.

• Externality: A side effect of an economic activity that affects third parties.

• Public Good: A good that is non-excludable and non-rivalrous.

• Monopoly: A market structure with a single seller and high barriers to entry.

• Perfect Competition: A market structure with many sellers, identical products, and free entry and exit.

Example Application

Example: If the government imposes a price ceiling on rental apartments below the equilibrium price, it may lead to a shortage as the quantity demanded exceeds the quantity supplied. This is a classic example of how price controls can create unintended market outcomes.