Principles of Microeconomics
(ECO 202 3.0 Cr)
Arts & Sciences
Course Description
Economics is the study of how people satisfy
their wants in the face of limited resources.
There are two main branches of economics:
macroeconomics and microeconomics. Macroeconomics
is concerned with economy-wide factors such
as inflation and unemployment. Microeconomics
deals with the behavior of individual households
and firms. Students will study how households
make decisions about what goods to buy, and
will also learn how firms make decisions about
what to produce and how to produce it. Examining
the behavior of households and firms will
give students the necessary insight to understand
how the interaction between consumers' demands
and producers' supplies determines prices
in the marketplace.
Economists
use what they call “models”
to examine various principles of economics.
In this course, students will develop economic
models that explain how markets determine
prices in competitive markets. Students
will use these models to analyze the behavior
of producers and consumers. Students will
also use models of "non-competitive"
behavior to explore economic principles
such as monopoly and oligopoly, and examine
the role that government plays in a mixed
economy.
Learning
Objectives
After completing this course, students will
be able to:
•
Explain the role of the market mechanism
in determining the prices of goods and services
in an economy
• Apply an economic model called supply
and demand to individual markets
• Describe the concept of market demand
as it pertains to consumer behavior
• Explain the basic constructs of
the "theory of the firm," particularly
the role of costs of production, and relate
them to market supply
• Analyze the extent of price competition
in a market competitive and monopoly models
• Assess the effects of "imperfect"
price competition on markets for goods and
services
• Prepare an argument defending or
opposing free international trade
• Analyze public policy issues such
as minimum wage laws and rent control legislations
using welfare economics
• Design an economic policy related
to an important issue, such as the efficient
reduction of environmental pollution
Breadth
of Assignments
This course uses a variety of methods to
explore the Principles of Microeconomics
including: textbook reading assignments,
online presentations designed to present
the material in a way that the textbook
cannot, web resources provided to support
particularly challenging subject matter,
self-assessment quizzes, collaborative projects
involving problem-solving or discussions
with classmates, individual activities ranging
from Java and Flash based interactive exercises
to writing assignments and case studies.
Required
Resources
Mankiw, N. (2003). Principles of Microeconomics
(3rd Edition). South-Western College
Publishers. ISBN 0-32-417188-9
A national/international newspaper or journal
of your choice is strongly suggested. The
following are recommended: The Financial
Times, The Wall Street Journal, The Economist.
Principles
of Microeconomics
Arts & Sciences
Module/Topics
Module
1: What is Economics
• The ten basic principles of economics
• Analyzing basic problems the way
an economist would
• Constructing simple economic models
• The importance of opportunity cost
in making choices among scarce resources
Module
2: Economic Modeling and the Gains from
Trade
• Interpreting graphs and calculate
slope and elasticity
• The importance of omitted variables
in determining causality
• Why economists generally favor free
trade
• Comparative advantage
Module
3: Supply and Demand
• The features of a competitive market
• The law of demand
• The law of supply
• How supply and demand determine
market price
• How changes in supply and demand
affect equilibrium
Module
4: Elasticity
• Demand elasticity
• The factors that influence demand
elasticity
• Income and supply elasticity
• How elasticity can be used to formulate
sound public policies
Module
5: Government Policy Using Supply and Demand
• How price ceilings affect markets
• How price floors affect markets
• Specific instances of price ceilings
and floors
• The effects of the minimum wage
• How taxes affect market outcomes
Module
6: Consumer and Producer Surplus
• Deriving consumer surplus from a
demand curve
• The significance and application
of consumer surplus
• Producer surplus
• Combining consumer and producer
surplus to measure consumer welfare
• How markets maximize welfare
Module
7: International Trade
• Determine market equilibrium with
and without trade
• The welfare effects of free trade
• The welfare effects of tariffs
• The arguments for and against free
trade
Module
8: Externalities and Public Goods
• Positive and negative externalities
• Why many government policies designed
to handle externalities are inefficient
• Designing an efficient strategy
to reduce pollution in your community, state
or at the national or global level
• Distinguishing a public good from
a private good
• Why many enterprises, like public
television, are under-funded
Module
9: Costs and Production
• The production function
• The different concepts of costs
recognized by economists
• Determining and utilizing marginal
cost
• The relationship between short run
and long run costs
Module
10: Perfect Competition
• The assumptions of the model of
perfect competition
• How competitive firms decide how
much to produce
• The short run equilibrium for a
perfectly competitive firm
• Predicting firm behavior in a competitive
industry where profits are too high or too
low
Module
11: Monopoly
• The feature that characterizes all
monopolies
• The components that determine the
short run equilibrium of a monopolist
• The welfare costs of monopoly
• Regulations designed to control
monopolists
• The Microsoft antitrust case
Module
12: Imperfect Competition
• The nature of imperfect competition
• Models of collusion and oligopoly
• Utilizing the prisoner's dilemma
model to study collusion
• Monopolistic competition
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