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.
The course will follow the textbook:
Cowen & Tabarrok, 2020, Modern Principles of Economics, 5th edition, Worth Publishers.
You can also use an older edition, the chapter numbers may be different, though.
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 and watch the assigned videos 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.
Consult the problems we want to discuss (see below) before each class so that you can prepare questions.
You can always contact me via email or twitter. For meetings appointments can be arranged through the my webpage at: https://economicscience.net/appointments/
Updated information, links to the literature, additional materials, etc. can be found on my webpage as well.
Missed quizzes cannot be made-up, in case you were excused from a quiz it will be dropped from the grade calculation.
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 and Preparation (4 hours / week)||60 hours|
|Problem Sets and Review (3 hours / week)||45 hours|
Topics and Reading Assignments
Trade (Ch. 2, PEC: 7)
Video: The Big Ideas of Trade
Video: Division of Labor: Burgers and Ships
Video: How the Division of Knowledge Saves Lives
Video: Comparative Advantage
Video: Another Look at Comparative Advantage
Video: Comparative Advantage Example Explained
Video: Comparative Advantage and the Tragedy of Tasmania
Video: Lesson of the Pencil
- Supply and Demand (Ch. 3, PEC: 4)
Video: The Demand Curve
Video: A Deeper Look at the Demand Curve
Video: The Demand Curve Shifts
Video: The Supply Curve Video: A Deeper Look at the Supply Curve Video: The Supply Curve Shifts
- Elasticities (Ch. 5, PEC: 5)
Video: Elasticity of Demand
Video: Calculating the Elasticity of Demand
Video: Elasticity of Demand in Practice
Video: Elasticity of Supply
Video: Elasticity and Slave Redemption
Video: Applications Using Elasticity
- Taxes and Subsidies (Ch. 6, PEC: 12)
Video: Commodity Taxes
Video: Who Pays the Tax
Video: Tax Revenue and Deadweight Loss
Video: Wage Subsidies
Price System (Ch. 7, PEC: 3)
Video: I, Rose
Video: A Price Is a Signal Wrapped up in an Incentive
Video: Markets Link the World
Video: The Great Economic Problem
Video: Information and Incentives
Video: Prediction Markets
Video: The Aalsmeer Flower Auction
Price Ceilings and Floors (Ch. 8, PEC: 6)
Video: Price Ceilings
Video: Price Ceilings: Shortages and Quality Reduction
Video: Price Ceilings: Lines and Search Costs
Video: Price Ceilings: Deadweight Loss
Video: Price Ceilings: Misallocation of Resources
Video: Price Ceilings: Rent Controls
Video: Rent Control in Mumbai
Video: Price Floors: The Minimum Wage
Video: Price Floors: Airline Fares
Video: Why Do Governments Enact Price Controls?
Video: Price Controls and Communism
The Economist, 2.4.2016, Spot the difference.
- Externalities (Ch. 10, PEC: 13)
Video: An Introduction to Externalities
Video: External Benefits
Video: Command and Control Solutions
Video: The Coase Theorem
Video: Trading Pollution
Video: A Deeper Look at Tradable Allowances
Video: Externalities and Incentives: The Economics of COVID
Costs and Profits under Perfect Competition (Ch. 11, PEC: 16)
Video: Introduction to the Competitive Firm
Video: Maximizing Profit Under Competition
Video: Maximizing Profit and the Average Cost Curve
Video: Entry, Exit, and Supply Curves: Increasing Costs
Video: Entry, Exit, and Supply Curves: Constant Costs
Video: Entry, Exit, and Supply Curves: Decreasing Costs
(Perfect) Competition (Ch. 12, PEC: 17)
Video: Minimization of Total Industry Costs of Production
Video: The Balance of Industries and Creative Destruction
Game Theory (Ch. 15, PEC: 18)
Video: Game Theory in One Minute
Video: Game Theory 101: Introduction
Video: Game Theory 101: The Prisoner’s Dilemma and Strict Dominance
Video: Game Theory 101: Iterated Elimination of Strictly Dominated Strategies
Video: Game Theory 101: Pure Strategy Nash Equilibrium and the Stag Hunt
Video: Game Theory 101: What Is a Nash Equilibrium?
Video: Game Theory 101: Best Responses
Video: Game Theory 101: Subgame Perfect Equilibrium
Video: Game Theory 101: Backward Induction
Video: Game Theory 101: Hotelling’s Game and the Median Voter Theorem
Monopolistic Competition (Ch. 17, PEC: 18)
Video: Monopolistic Competition
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)
Video: Introduction to Consumer Choice
Video: Budget Constraints
Video: Indifference Curves
Video: Consumer Optimization
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.
Upload you solutions to this pCloud folder [Click Here!]
Please use PDF or plain text for your uploads.
If you do not have a pCloud account yet: You can get one for free!