Principles of Microeconomics

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Important dates:

September 2nd
No Class
September 4th
No Class
October 7th
Midterm exam 1, begin at 15:05
November 13th
No Class: Please attend the talk by Mr. Hilper on the Management of non-Profit organisations instead
November 27th
Midterm exam 2, begin at 15:30
December 11th
double session — from 15:30 until 18:00
December 18th
double session — from 15:30 until 18:00
January 8th
Final exam, begin at 15:30

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 ComponentWeight
Midterm Exam 120%
Midterm Exam 220%
Final Examination60%

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.

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.

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.

ActivityTime
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

Session 3

  • Trade (Ch. 2, PEC: 7)

Session 4

Session 5

  • Supply and Demand (Ch. 3, PEC: 4)

Session 6

Session 7

Session 8

Session 9

Midterm Exam 1

Session 10

  • Elasticities (Ch. 5, PEC: 5)

Session 11

  • Taxes and Subsidies (Ch. 6, PEC: 12)

Session 12

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

Session 16

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

Session 22

  • Game Theory (Ch. 15, PEC: 18)

Session 23

Session 24

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!