Principles of Microeconomics Spring 2017

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Course Description

An introductory course covering issues relating to individual economic units: namely, the individual consumer, the individual firm.

Topics covered include, but are not limited to, price theory, price determination through equilibrium, supply and demand, analysis of consumer demand, utility theory and marginal utility, consumer equilibrium, indifference curve analysis, analysis of supply, theory of production, pricing in perfectly and imperfectly competitive markets, types of imperfect competition, and anti-trust laws.

Course Objectives

The course will enable students to gain an understanding of how the market economy works and how economic theory can be used to understand the interactions of individual decision makers and entities like consumers, firms, and the government.

Course Materials


The course will follow the textbook: Cowen & Tabarrok, 2015, Modern Principles of Economics, 3rd edition, Worth Publishers.
Available from bookdepository and amazon

Further recommendations:

Klein & Bauman, 2010, The Cartoon Introduction to Economics: Volume One: Microeconomics, Macmillan
bookdepository amazon

Sometimes it is helpful to have access to an alternative textbook that explains the material in a different way. For this purpose I recommend: Goodwin et. al., 2014, Principles of Economics in Context, Routledge.
Available from amazon and bookdepository.

To prepare for the exams, Schaum’s Outlines of Principles of Economics offers a huge number of fully solved problems. Available from amazon and bookdepository.

Course Requirements:

Students must read the corresponding chapters of the textbook before each session. Reading the economic and political press will also be helpful.

I recommend that you try to solve the end of chapter problems in preparation and review of each class session.

Instructor Information:

Prof. Dr. Dennis A. V. Dittrich

My office hours are 24 hours a day via email. For meetings in my office appointments can be arranged through the my webpage at:

Updated information, links to the literature, additional materials, etc. can be found on my webpage as well.

Grading Guidelines:

Grading Component Weight
Midterm Exam 1 30%
Midterm Exam 2 30%
Final Examination 40%

If the final exam is better than one or both of the midterm exams the corresponding midterm exam grade(s) will be replaced by the grade of the final exam.

You can earn extra points for the final exam by handing in solutions to the problem sets (see below).


A typical 3 credit course requires 150 hours of your time. The table below identifies how I expect those 150 hours will be allocated. While you do not receive direct marks for reading, reading will affect your class participation mark (your ability to participate in class discussions and activities) and your final exam mark. While some weeks have more readings than others, you should be able to read the required reading in an average of 2 hours per week.

Activity Time
Class Time (3 hours / week) 45 hours
Reading (3 hours / week) 45 hours
Preparation and Review (4 hours / week) 60 hours

Topics and Reading Assignments

Session 1 (13.02.)

Economics: The Big Ideas (Ch. 1)

Session 2 (16.02.)

Trade (Ch. 2)

How I built a toaster:
Lesson of the Pencil
I, Pencil: My Family Tree as told to Leonard E. Read http://www.
How to Make a $1500 Sandwich in Only 6 Months

Session 3 (20.02.)

Trade (Ch. 2)

Session 4 (23.02.)

Supply and Demand (Ch. 3)

Session 5 (27.02.)

Session 6 (2.03.)

Equilibrium (Ch. 4)

Session 7 (6.03.)

Elasticities (Ch. 5)

Session 8 (9.03.)

Elasticities (Ch. 5)

Session 9 (13.03.)

Session 10 (16.03.)

Midterm Exam 1

Session 11 (20.03.)

Taxes and Subsidies (Ch. 6)

Session 12 (23.03.)

Taxes and Subsidies (Ch. 6)

Session 13 (27.03.)

Price System (Ch. 7)

Session 14 (30.03.)

Price Ceilings and Floors (Ch. 8)

The Economist, 2.4.2016, Spot the difference.

Session 15 (3.04.)

Price Ceilings and Floors (Ch. 8)

Session 16 (6.04.)

Costs and Profits under Perfect Competition (Ch. 11)

Session 17 (20.04.)

(Perfect) Competition (Ch. 11 and 12)

Session 18 (24.04.)

Session 19 (27.04.)

Midterm Exam 2

Session 20 (4.05.)

Monopoly (Ch. 13)

Session 21 (8.05.)

Price Discrimination (Ch. 14)

Session 22 (11.05.)

Game Theory (Ch. 15)

Session 23 (15.05.)

Oligopoly & Game Theory (Ch. 15)

The Economist, Mar 26th 2016, Too much of a good thing

Session 24 (18.05.)

Monopolistic Competition (Ch. 17)

In “Industrial Organization” we will discuss issues of imperfect competition (Monopolies, Oligopolies, Cartels, Strategic Pricing) in more detail.

Session 25 (22.05.)

Consumer Behavior (Ch. 25)

Session 26 (29.05.)

Consumer Behavior (Ch. 25)

In “Intermediate Microeconomics” we will discuss consumer behavior in more detail.

Session 27 (8.06.)


Session 28 (12.6.)


Topics and reading assignments are subject to changes.

Problem sets

We will discuss problems – mostly taken from our textbook – in class. You will find the problems for download in a dropbox folder: here.

Answers to questions marked with an * can be handed in at the beginning of the respective classes mentioned in the problem sets for extra points on the final exam. In total over all homework problem sets you will be able to earn 10 extra points on the final exam. Handing in answers to the problem sets is voluntary.

If you do not have a Dropbox account yet: Get one for free!