Principles of Microeconomics
Important dates:
- March 13
- Midterm exam 1
- April 17
- Midterm exam 2
- May 29
- Final exam
Course Description
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.
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
Required:
The course will follow the textbook:
Cowen & Tabarrok, 2015, Modern Principles of Economics, 3rd edition, Worth Publishers.
Available from bookdepository and amazon
Further recommendations:
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].
Klein & Bauman, 2010, The Cartoon Introduction to Economics: Volume One: Microeconomics, Macmillan
bookdepository amazon
To prepare for the exams, Schaum’s Outlines of Principles of Economics offers a large 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.
Class meets each Monday at 15:05 till 16:20 and Wednesday at 15:30 till 16:45. 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.
Instructor Information:
Prof. Dr. Dennis A. V. Dittrich
dennis.dittrich@touroberlin.de
http://economicscience.net
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.
Grading Guidelines:
Grading Component | Weight |
---|---|
Midterm Exam 1 | 20% |
Midterm Exam 2 | 20% |
Final Examination | 60% |
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.
In case you were excused from a midterm exam, the make-up exam for the missed midterm will be administered with the final exam.
Workload
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.
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
- Economics: The Big Ideas (Ch. 1, PEC: 1)
Session 2
- 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
Session 3
- Trade (Ch. 2, PEC: 7)
Session 4
- Supply and Demand (Ch. 3, PEC: 4)
Video: The Demand Curve
Video: The Supply Curve
Session 5
- Supply and Demand (Ch. 3, PEC: 4)
Session 6
- Equilibrium (Ch. 4, PEC: 4)
Video: Equilibrium and the Gains from Trade
Session 7
- Equilibrium (Ch. 4, PEC: 4)
Video: Demand, Infrastructure Affects Price and…
Session 8
- Elasticities (Ch. 5, PEC: 5)
Video: Elasticity and Slave Redemption
Session 9
- Elasticities (Ch. 5, PEC: 5)
Session 10
Midterm Exam 1
Session 11
- Taxes and Subsidies (Ch. 6, PEC: 12)
Session 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
Session 13
- Price Ceilings and Floors (Ch. 8, PEC: 6)
The Economist, 2.4.2016, Spot the difference.
Video: Price Ceilings
Session 14
- Price Ceilings and Floors (Ch. 8, PEC: 6)
Session 15
- Externalities (Ch. 10, PEC: 13)
Video: Trading Pollution
Session 16
- Costs and Profits under Perfect Competition (Ch. 11, PEC: 16)
The new ‘sharing economy’ can enrich micro-entrepreneurs but at what cost?
Session 17
- (Perfect) Competition (Ch. 11 and 12, PEC: 17)
Session 18
- (Perfect) Competition (Ch. 12, PEC: 17)
Session 19
- Monopoly (Ch. 13, PEC: 18)
Session 20
Midterm Exam 2
Session 21
- Price Discrimination (Ch. 14, PEC: 18)
Video: Should Cable Companies Be Required to Sell…
Session 22
- Game Theory (Ch. 15, PEC: 18)
Session 23
- Oligopoly & Game Theory (Ch. 15, PEC: 18)
The Economist, Mar 26th 2016, Too much of a good thing
Session 24
- 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.
Session 25
- Consumer Behavior (Ch. 25, PEC: 8, 9)
Session 26
- Consumer Behavior (Ch. 25, PEC: 9)
In “Intermediate Microeconomics” we will discuss normative and descriptive theories of consumer behavior in more detail.
Session 27
Review
Session 28
Final
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 pCloud folder: here.
If you do not have a pCloud account yet: Get one for free!