Microeconomics Course Overview and Study Guide

Introduction to Microeconomics

What is Microeconomics?

Microeconomics is the branch of economics that studies the behavior and decision-making processes of individual agents in society, such as consumers, producers, and the government. Unlike macroeconomics, which focuses on aggregate economic indicators like unemployment, inflation, and GDP, microeconomics examines the choices and interactions of individual entities and how these contribute to the allocation of resources.

• Key Focus: Individual decision-making, market mechanisms, and resource allocation.

• Agents: Consumers, firms, and government.

• Applications: Consumer choice, firm entry/exit, pricing, and policy analysis.

• Contrast with Macroeconomics: Macroeconomics studies the economy as a whole, while microeconomics focuses on parts of the economy.

Example: Analyzing how a consumer decides between two products based on price and preference, or how a firm determines the optimal quantity of output to maximize profit.

Course Learning Goals

The course aims to equip students with analytical tools and economic reasoning skills to understand and evaluate individual and collective choices in various market settings.

• Scientific Process: Use hypothesis testing and curiosity to understand economic phenomena.

• Model Application: Select and apply appropriate economic models to analyze choices and policies.

• Quantitative Reasoning: Develop skills in working with equations and graphs.

• Model Assumptions: Identify and connect model assumptions to theoretical and real-world outcomes.

• Economic Communication: Discuss economic issues clearly, using proper terminology and reasoning.

Major Topics Covered

• Supply and Demand: Understanding how market prices and quantities are determined by the interaction of supply and demand.

• Elasticity: Assessing how responsive consumers and producers are to changes in price and other factors, and its impact on total revenue.

• Market Disruptions: Analyzing effects of events like supply chain issues on markets.

• Business Decisions: Comparing marginal benefits, marginal revenues, and marginal costs to guide firm behavior.

• Opportunity Cost and Sunk Cost: Applying these concepts to production and decision-making.

• Market Structures: Examining profit maximization and price-setting in perfect competition, monopolistic competition, oligopoly, and monopoly.

• Market Failures and Government Intervention: Understanding externalities, public goods, and corrective policies.

• Efficiency vs. Equity: Evaluating government policies like minimum wages, price caps, and rent ceilings.

• Information Problems: Exploring moral hazard, adverse selection, and principal-agent issues in markets and corporate governance.

Key Economic Concepts and Definitions

• Marginal Benefit (MB): The additional benefit received from consuming or producing one more unit of a good or service.

• Marginal Cost (MC): The additional cost incurred from consuming or producing one more unit of a good or service.

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

• Sunk Cost: A cost that has already been incurred and cannot be recovered; should not affect current decision-making.

• Elasticity: A measure of how much quantity demanded or supplied responds to changes in price or other factors.

• Externality: A cost or benefit imposed on a third party not directly involved in a transaction (e.g., pollution).

• Public Good: A good that is non-excludable and non-rivalrous, such as national defense.

• Market Failure: A situation where the market does not allocate resources efficiently on its own.

Course Structure and Assessment

Assessment Components

• Homework Assignments (20%): Online assignments for each chapter, best score out of three attempts counted. Two lowest grades dropped.

• Quizzes (10%): In-class quizzes on selected chapters, multiple-choice or short essay/graphical questions. Lowest grade dropped.

• Class Assignments (5%): In-class activities, may be unannounced, graded on accuracy and attendance.

• Class Attendance (5%): Tracked via Canvas.

• Semester Exams (40%): Two exams covering multiple chapters, mix of multiple-choice and short-answer questions.

• Final Exam (20%): Comprehensive, multiple-choice, administered online.

Grading Scale

Grade	Range (%)
A	93 - 100
A-	90 - 92.99
B+	87 - 89.99
B	83 - 86.99
B-	79 - 82.99
C+	76 - 78.99
C	73 - 75.99
C-	70 - 72.99
D+	67 - 69.99
D	64 - 66.99
D-	60 - 63.99
F	0 - 59.99

Note: Grades are not rounded up. For example, 89.99% is a B+, not an A-.

Course Schedule and Major Chapters

Week	Topic/Chapter
1	Chapter 1: Introduction to Economics
2-3	Chapter 3: Forces of Demand and Supply
4	Chapter 4: Economic Efficiency, Government Price Setting, and Taxes
5	Chapter 5: Externalities, Environmental Policy, and Public Goods
6	Chapter 6: Elasticity
7	Review and Exam I (Chapters 1, 3, 4, 5, 6)
8	Spring Break
9	Chapters 7 & 8: Health Care, Firms, Stock Market, Corporate Governance
10	Chapter 11: Production, Costs & Technology
11	Chapter 12: Perfect Competition
12	Chapter 15: Monopoly
13	Chapter 13: Monopolistic Competition
14	Review and Exam II (Chapters 7, 8, 11, 12, 13, 15)
15	Chapter 14: Oligopoly
16	Review Session
Finals	Comprehensive Final Exam

Textbook and Materials

• Primary Textbook: Hubbard and O'Brien, Microeconomics, Custom Edition for Temple University, Pearson.

• Digital Access: MyLab software required for assessments and e-text access.

• Alternative Options: Used or alternative editions are acceptable; digital access code is required for online assignments.

• Supplementary Reading: Regular reading of economic news sources (e.g., New York Times, Financial Times, Wall Street Journal, Economist) is encouraged.

Prerequisites

• Minimum grade of C- in specified mathematics or quantitative analysis courses.

Additional Information

• All required materials and assignments are available via Canvas and Pearson MyLab.

• Course policies regarding extensions, retakes, and grading are strictly enforced.

• Course content aligns with BBA program goals, emphasizing rational decision-making, market analysis, and profit maximization.

Summary Table: Major Microeconomics Topics

Topic	Description
Supply and Demand	Determines market prices and quantities through interaction of buyers and sellers.
Elasticity	Measures responsiveness of quantity demanded or supplied to changes in price or other factors.
Market Structures	Analyzes different types of markets: perfect competition, monopoly, monopolistic competition, oligopoly.
Market Failures	Examines situations where markets do not allocate resources efficiently (e.g., externalities, public goods).
Government Intervention	Studies policies like taxes, subsidies, price controls, and regulation to correct market failures.
Consumer and Producer Choice	Explores how individuals and firms make decisions to maximize utility and profit.

Key Formulas and Concepts (Preview)

• Price Elasticity of Demand: $\text{Price Elasticity of Demand} = \frac{\%\ \text{Change in Quantity Demanded}}{\%\ \text{Change in Price}}$

• Marginal Cost: $\text{MC} = \frac{\Delta TC}{\Delta Q}$

• Marginal Revenue: $\text{MR} = \frac{\Delta TR}{\Delta Q}$

• Profit Maximization Condition: $\text{Profit is maximized when } MR = MC$

• Consumer Surplus: $\text{Consumer Surplus} = \text{Willingness to Pay} - \text{Price Paid}$

• Producer Surplus: $\text{Producer Surplus} = \text{Price Received} - \text{Cost of Production}$

Additional info: This guide is based on the course syllabus and introductory materials. For detailed explanations, examples, and problem sets, refer to the assigned textbook chapters and online resources.