Principles of Microeconomics
Principles of Microeconomics ECO 2023
University of Central Florida
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Date Created: 10/22/15
ECO 2023 0005 Principles of Microeconomics TTh 900 1015 CSB 101 UCF Spring Semester 2009 Instructor Thomas Martin Of ce Hours TTh 1030 1130 Of ce CBA II 303D Tel 407 823 5681 E mail tmartinbusucfedu Home Page wwwbusucfeduma1tin Economics is the study of human behavior as we go about the ordinary business of life to quote the famous economist Alfred Marshall As such it offers a way of thinking about how the world works Like it or not economic issues dominate much of the world in which we live We are faced with economic issues on television in newspapers in the voting booth and especially in a career choice Another distinguished economist defined the field as the study of the use of scarce resources which have alternative uses The economy is a system of production and distribution of goods and services under the constraint of scarcity In a world of scarcity we must make choices both as an individual and as a society Economics examines the nature of those choices and the consequences of those choices by us as an individual and by us as a society through government regulation Economics is about the material welfare of society as a whole rather than the financial wellbeing of any particular individual It is a way of thinking rather than a set of facts to be memorized This semester we will examine the economic way of thinking and apply that way of thinking to contemporary economic issues We will do so by reading the following material before the dates listed The Reading Mankiw N G Principles of quot 39 quot 11 5Lh edition 2009 Optional Hakes DR Study Guide Southwestern Also visit Mankiw s web sites and other ones he identifies in the text Miller RL DK Benjamin and DC North The Economics of Public Issues Boston Massachusetts Pearson AddisonWesley 15Lh edition 2008 HB171M544 2008 The readings are centered around the text by Mankiw A11 chapters are from Mankiw unless otherwise noted The readings from Miller are short chapters Each one is a story about a particular contemporary and often controversial economic issue The Course Learning Objectives N E 4 V39 0 gt1 9 0 Students will be able to specify why scarcity of resources necessitates that choices must be made and thus why tradeoffs occur when decisions are made Students will be able to differentiate between comparative and absolute advantage and explain why the former is the key principle behind gains from trade Students will be able to identify and classify the determinants of demand functions that is to say they will be able to recognize the single factor that causes a change in quantity demanded versus those factors that cause a change in demand Students will be able to identify and classify the determinants of supply functions that is to say they will be able to recognize the single factor that causes a change in quantity supplied versus those factors that cause a change in supply Students will be able to determine the market clearing price and quantity in a market and to predict the effect on the equilibrium price and quantity when the factors that shift a demand or supply curve change Students will be able to use demand supply analysis to assess the economic implications of government interventions including concepts of consumerproducer surplus and deadweight loss Students will be able to explicate why competitive markets lead to economically efficient outcomes and how government intervention can improve or decrease market efficiency Students will be able to define calculate and determine the economic implications of price elasticity of demand price elasticity of supply income elasticity and cross price elasticity of demand Students will be able to calculate in addition to articulate the distinction among the various costs of production and furthermore describe why certain costs matter for making economic decisions and why others do not Students will be able to determine the profit maximizing quantity of a perfectly competitive firm and show how it changes in response to changes in the market price and the determinants of production costs Students will be able to distinguish production decisions between the long run and the short run and how that affects the entryexit decision Students will be able to formulate why marginal revenue is less than price for a firm with monopoly power and how this relates to the economic inefficiency of such firms Students will be able to determine the profit maximizing price and quantity for a monopolist and to explain why a monopolist has no supply curve Exams Web Site Access webcourses through myucfedu lthttpmyucfedugt and click on the online courses tab When that site is not available you can directly access webcourses through L 439 ed lthttp L 39 439 ed Your username is your NID Your default password is PYYMMDD your birthday All exams will be taken in the CBA II Testing Lab The exam will be available in the lab make sure you check on the hours during which the Lab is open I missed the exam because the Lab was closed when I tried to take the exam is NOT a valid excuse for missing a test Your score is reported immediately after you take your exam You may bring a pen or pencil to use on scratch paper provided by the testing lab Do not bring a calculator you may use the one on the computer Review the following information and procedures prior to taking exams in the Testing Lab 9 Checkin and out for an exam You may checkin for your exams during the Testing Lab open hours listed below A valid U CF Student ID Card is required to gain entrance to the Lab Your UCF ID will be electronically scanned to authenticate your access You may or may not be assigned to sit at a particular computer workstation and your UCF ID will be held by the Lab staff as a seat count indicator and returned to you when you checkout of the Lab O Reporting problems Ifyou encounter difficulty with any equipment or software in the Testing Lab you must report the problem to a proctor or staff member for assistance before proceedingattempting to fix the problem on your own Report as much information about the problem and your location as you can Because many exams are timed reporting a technical problem as quickly as possible will minimize the time required to get back online and complete the exam NOTE The Testing Lab environment and its computers are electronically monitoredrecorded to include real time Video All perceived incidents of student misconduct will be reported to the Student Conduct Board for action O No unauthorized materials No cell phones PDAs calculators backpacks books papers or any other materials will be allowed in the Testing Lab If you arrive for the exam with these things you will have to store them in the payforuse lockers located in room 105 The Testing Lab is not responsible for lost or stolen items O Leaving the testing area Once you are seated for an exam you are not permitted to move from that location for the duration of the exam Should an emergency occur in which you must leave the exam a proctor will go with you if you wish to return to the exam Otherwise your computer will be reset and reassigned to the next student checking in You will have from Monday through Friday during the testing week to take the exam It is not a valid excuse to say you missed the exam because the lab was closed Check the lab hours as they vary during the week My advice is to not wait until the last day or minute to take the exam You of course always have 9AM10 15AM TTh during our scheduled class hours to take the exam So no excuses please Academic Honesty UCF is committed to maintaining a fair academic environment for all students A policy of academic honesty is strictly enforced Conduct compromising this policy will result in academic andor disciplinary action Any student who violates or assists in violating these standards will be pursued through the Office of Student Conduct as outlined in The Golden Rule Student Handbook See httpwwwucf edugoldenrule for further details Possession of any item other than approved items discussed elsewhere on this syllabus in the testing lab will constitute cheating including cell phones Accessing any Internet resource including past quizzes presentations emails andor notes is also considered cheating Technical Help Resources 39 UCF User Services Help Desk is open from 800am to 5pm MF Visit them at CCI 104 or phone 4078235117 or use their website httpwwwhelpdeskucfedu UCF s Techrangers website http 39 cdws ncf J t is full of useful and wellorganized information for online courses Write to them through the link provided on that page from your computer for help They are also available by telephone from 90am to 500pm MF 4078233808 Login Security Issues Some students have not changed their initial PYYMMDD passwords and it is important that all users do so in order to maintain security and confidentiality 0 During registration you will be asked for your NID NID letters are NOT capitalized Use small letters only or your grades will not be handled correctly I am the only one who has access to this information DATES AND READINGS Week 1 PART I Week 2 January 8 INTRODUCTION CHAPTER 1 TEN PRINCIPLES OF ECONOMICS How People Make Decisions How People Interact How the Economy as a Whole Works Miller PART ONE The Foundations of Economic Analysis Chapter 1 Death by Bureaucrat when bureaucratic choices mean life for some people and death for others Chapter 2 Ethanol Madness how one government policy illustrates the nature of all government policy January 13 15 CHAPTER 2 THINKING LIKE AN ECONOMIST The Economist as Scientist The Economist as Policy Advisor Why Economists Disagree CHAPTER 3 INTERDEPENDENCE AND THE GAINS FROM TRADE A Parable for the Modern Economy The Principle of Comparative Advantage Applications of Comparative Advantage Miller Chapter 3 Flying the Friendly Skies how safe is commercial air travel and how safe should it be Chapter 4 The Mystery of Wealth why some nations are rich and others are poor Week 3 January 20 22 PART 2 SUPPLY AND DEMAND I HOW MARKETS WORK Week 4 CHAPTER 4 THE MARKET FORCES OF SUPPLY AND DEMAND Markets and Competition Demand Supply Supply and Demand Together CHAPTER 5 ELASTICITY AND ITS APPLICATION The Elasticity of Demand The Elasticity of Supply Three Applications of Supply Demand and Elasticity The Farm Problem January 27 29 CHAPTER 6 SUPPLY DEMAND AND GOVERNMENT POLICIES Supply and Demand Applications Controls on Prices Oil and Gasoline Prices Apartment Rent Controls The Minimum Wage Excise Taxes and Ad Valorem Taxes Prohibition Miller PART TWO SUPPLY AND DEMAND Chapter 5 Sex Booze and Drugs the unintended and often harmful consequences of prohibiting voluntary exchange Chapter 6 Expanding Waistlines why Americans are getting heavier Chapter 7 Is Water Different are necessities like water really other goods Chapter 8 Slave Redemption in Sudan how wellintended efforts to promote freedom can back re Chapter 9 Smoking and Smuggling why taxes fuel interstate and international trade in bootleg cigarettes Chapter 10 Bankrupt Landlords from Sea to Shining Sea when governments lower rents tenants can sulTer Chapter 11 Why Are Women Paid Less why are women paid less while men are working less Chapter 12 The Effects of the Minimum Wage how a living wage can ruin the lives of minority youngsters Chapter 13 Immigration Superstars and Poverty in America are the rich getting richer and the poor getting poorer and if not why does it look that way Chapter 14 A Farewell to Jobs why efforts to save jobs makes us all poorer Week 5 February 26 FIRST EXAM is open testing lab Week 6 February 10 12 PART 3 SUPPLY AND DEMAND 11 MARKETS AND WELFARE CHAPTER 7 CONSUMERS PRODUCERS AND THE EFFICIENCY OF MARKETS Consumer Surplus Producer Surplus and Market Efficiency CHAPTER 8 THE COSTS OF TAXATION The Deadweight Loss of Taxation The Determinants of the Deadweight Loss Deadweight Loss and Tax Revenue as Taxes Vary CHAPTER 9 APPLICATION INTERNATIONAL TRADE The Determinants of Trade The Winners and Losers From Trade The Arguments for Restricting Trade The Evolution of International Economic Institutions Week 7 February 17 19 CHAPTER 9 APPLICATION INTERNATIONAL TRADE continued Miller PART SEVEN International Trade and Economic Prosperity Chapter 30 Free Trade Less Trade or No Trade if free trade is beneficial why do people complain about it Chapter 31 The 750000 Steelworker the economic consequences of restricting international trade Chapter 32 The Lion the Dragon and the Future do China India and other modernizing nations spell the demise of America Week 8 February 24 26 PART 4 THE ECONOMICS OF THE PUBLIC SECTOR Chapter 10 EXTERNALITIES EXtemalities and Market Inefficiency Private Solutions to EXtemalities Public Policies Toward Extemalities Property Rights and the Environment Miller PART FIVE Political Economy Chapter 21 Raising Less Corn and More Hell how your taX dollars end up in farmers pockets Chapter 22 Killer Cars and the Rised of the SUV why fuel economy kills Chapter 23 Crime and Punishment incentives matter especially to criminals Chapter 24 The Graying of America America is getting older and you will foot the bill Chapter 25 Heavenly Highway how a simple market mechanism can eliminate traf c jams Miller PART SIX Property Rights and the Environment Chapter 26 The Trashman Cometh the costs and bene ts of recycling Chapter 27 Bye Bye Bison why some species are endangered and others are not Chapter 28 Smog Merchants how markets can reduce pollution Chapter 29 Greenhouse Economics the economics of global climate change Week 9 March 3 5 Chapter 11 PUBLIC GOODS AND COMMON RESOURCES Week 10 Week 11 The Different Kinds of Goods Public Goods Common Resources The Importance of Property Rights Chapter 12 THE DESIGN OF THE TAX SYSTEM A Financial Overview of thee US Government Taxes and Efficiency Taxes and Equity March 1620 SECOND EXAM open in the lab March 24 26 PART 5 FIRM BEHAVIOR AND THE ORGANIZATION OF INDUSTRY Week 12 Week 13 Chapter 13 THE COSTS OF PRODUCTION Production and Costs The Various Measures of Cost Costs in the Short Run and in the Long Run Chapter 14 FIRMS IN COMPETITIVE MARKETS What is a Competitive Market Pro t Maximization and the Competitive Firm s Supply Curve The Supply Curve in a Competitive Market March 31 April 2 Chapter 15 MONOPOLY Why Monopolies Arise How Monopolies Make Production and Pricing Decisions The Welfare Costs of Monopoly Public Policy Toward Monopoly April 7 9 Chapter 16 MONOPOLISTIC COMPETITION Competition With Differentiated Products Advertising Brand Names Miller PART FOUR Market Structures Chapter 15 Monopsony and Competition in Health Care insurance makes health care expensive but also good Chapter 16 Big Oil Big Oil Prices does ExxonMobil decide how much we pay at the pump Chapter 17 Contracts Combinations and Conspiracies why the NCAA and OPEC have more than four letter names in common Chapter 18 Coffee Tea or TuitionFree who wins and who loses from price discrimination Chapter 19 College Costs and Costs and Costs college costs have tripled but the quality of the product hasn t what s going on Chapter 20 Keeping the Competition Out when the government steps in the competition steps out Chapter 17 OLIGOPOLY Between Monopoly and Perfect Competition Markets With Only a Few Sellers Game Theory and the Economics of Cooperation Public Policy Toward Oligopolies Antitrust in the New Economy Week 14 April 14 16 PART 7 TOPICS FOR FURTHER STUDY Chapter 21 THE THEORY OF CONSUMER CHOICE The Budget Constraint Preferences What the Consumer Wants Optimization What the Consumer Chooses Three Applications Week 15 April 21 23 Chapter 22 FRONTIERS OF MICROECONOMICS Asymmetric Information Political Economy Behavioral Economics Summary and Conclusions Review for the Final Exam Final Exam Monday April 27 Friday May 1 Available in the testing lab Grades Your grade is this class is based on your performance on the following Exam 1 33 Exam 2 33 The Final Exam 33 Grades are based on the usual tenpoint scale with some rounding issues A 8945 100 B 7945 7 8944 C 6945 7 7944 D 5945 7 6944 F 5944 and below
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