Principles of Microeconomics
An introductory course on issues relating to individual economic units: namely, the individual consumer, the individual firm, and their interaction in markets.
Topics 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.
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.
Additionally, material from the following text may be used:
Goodwin et. al., 2014, Principles of Economics in Context, Routledge.
Available from amazon and bookdepository.
Relevant chapters are listed below as [PEC:Chapter number].
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.
Please bring a hard copy of the problems we want to discuss (see below) to each class.
Electronic devices, i.e. laptops, are discouraged from use during class sessions. See http://economicscience.net/content/laptop-use/ for the reasons.
You can always contact me via email. For meetings in my office appointments can be arranged through the my webpage at: http://economicscience.net/content/book-appointment.
Updated information, links to the literature, additional materials, etc. can be found on my webpage as well.
If the final exam is better than the midterm exam the corresponding midterm exam grade will be replaced by the grade of the final exam.
In case you were excused from the midterm exam, the make-up exam for the missed midterm will be administered with the final exam.
Missed quizzes cannot be made-up, in case you were excused from a quiz it will be dropped from the grade calculation.
You are allowed to bring a dictionary and pocket calculator to all exams. For the final exam only, you are allowed to bring a single-sided page DIN A4 with hand-written notes.
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.
|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
- Economics: The Big Ideas (Ch. 1, PEC: 1)
- Trade (Ch. 2, PEC: 7)
How I built a toaster
Lesson of the Pencil
I, Pencil: My Family Tree as told to Leonard E. Read
How to Make a $1500 Sandwich in Only 6 Months
Video: How the Division of Knowledge Saves Lives
- Equilibrium (Ch. 4, PEC: 4)
Video: Equilibrium and the Gains from Trade
Video: Demand, Infrastructure Affects Price and…
- Elasticities (Ch. 5, PEC: 5)
Video: Elasticity and Slave Redemption
- Taxes and Subsidies (Ch. 6, PEC: 12)
- Price System (Ch. 7, PEC: 3)
Video: The Aalsmeer Flower Auction in Action
Video: The Rose and the Invisible Hand
Video: A Price is a Signal
- Price Ceilings and Floors (Ch. 8, PEC: 6)
The Economist, 2.4.2016, Spot the difference.
Video: Price Ceilings
- Price Ceilings and Floors (cont’d)
- Externalities (Ch. 10, PEC: 13)
Video: Trading Pollution
- Costs and Profits under Perfect Competition (Ch. 11, PEC: 16)
The new ‘sharing economy’ can enrich micro-entrepreneurs but at what cost?
- (Perfect) Competition (Ch. 11 and 12, PEC: 17)
- Monopoly (Ch. 13, PEC: 18)
- Price Discrimination (Ch. 14, PEC: 18)
Video: Should Cable Companies Be Required to Sell…
- Oligopoly & Game Theory (Ch. 15, PEC: 18)
The Economist, Mar 26th 2016, Too much of a good thing
- Oligopoly (Ch. 15, PEC: 18) cont’d
Video: Watch the FBI’s Secret Video of the Lysine Cartel
- Monopolistic Competition (Ch. 17, PEC: 18)
In “Industrial Organization” we will discuss issues of imperfect competition (Monopolies, Oligopolies, Cartels, Strategic Pricing) in more detail.
- Consumer Behavior (Ch. 25, PEC: 8, 9)
In “Intermediate Microeconomics” we will discuss normative and descriptive theories of consumer behavior in more detail.
Topics and reading assignments are subject to changes.
We will discuss problems – mostly taken from our textbook – in class. You will find the problems for download in a pCloud folder: here.
If you do not have a pCloud account yet: You can get one for free!