Economics 101: Principles of Microeconomics                                                                                Prof. Carpenter

UMBC                                                                                                                                                Spring 02

 

This course will introduce you to techniques used in economics.  I will help you to understand how economists analyze the way that people and businesses behave.  I will also help you learn how to predict the likely effects of different sorts of policies (both policies that are economic and policies that, at first, don’t appear to be.)  By the end of this course I hope that you will be a more informed citizen.

A quick word of advice.  Economics is hard for a lot of people.  To succeed in this course, you have to study the material, not just read it.  There is no substitute for repeated exposure and hours of effort.  Think of an exam like a race; you cannot succeed without preparation and training, and you can’t train a lot the day before and expect to do well. 

Required Texts:

Case and Fair, Principles of Microeconomics, 6th edition.

Kaufman.  Study Guide and Workbook.

Recommended Texts:

The Wall Street Journal.

Course Format:

This course is offered on Tuesdays and Thursdays from 830 to 945.

This is an early class, and early classes can provide students with a strong incentive to stay in bed.  That’s not good because some of the material in this course will not be contained in the readings and my tests typically have a moderate to strong emphasis on what I cover during the lecture.  It has been my experience that copying your classmates’ notes is no substitute for participation in classroom discussions.  Let me state my position as clearly as possible…attendance is required.  To provide you with the proper incentives, I have an attendence policy.  You will receive an increment to your total score of 2*(2-N) percentage points, where N is the number of times you are absent or substantially absent.  Therefore, should you attend all lectures you will receive 4 bonus points.  Should you be absent twice you receive no increment.  Three absences (more than one week of the course) and you receive a negative increment of 2 points.  When N is greater than 5, the formula changes to 4*(5-N) for only those absences greater than 5.  Your sixth absence (three full weeks of the course) then reduces your score by 4 percentage points.  Suppose then, that you receive a score of 93 for the course, but are absent 7 times.  Your score is then 93+(2*(2-5))+(4*(5-7)) or 93-6-8 or 79.  Excused absences are exempt.  Valid excuses include work related trips (documented on company letterhead) illness or injury (documented and prior notification, please) and university related trips (e.g., athletes).  Invalid excuses include weddings (except for your own) vacations, and exam preparation for other classes.

Reading:

The primary text will be Case and Fair’s textbook.  My lectures will highlight what I believe to be the important points in the assigned chapters.  I will expect you to be familiar with the material that I do not cover in class.  In addition, I may assign outside readings (including material found on the World Wide Web) from time to time and the lectures may draw on material found in supplementary sources.  Unless this supplementary material is assigned as reading or on the syllabus, you will be responsible for only the portion that I cover in class.  You will always have several days to obtain and read such assignments.

While the Wall Street Journal is not required for this course, I have no idea how anyone can keep track of the day to day developments in the U.S. economy without reading it (although I have heard some reports of people trying the New York Times).  I also use it to emphasize the policy implications that are everywhere in economics.  While I do not require the Wall Street Journal, I highly recommend that you purchase a subscription for the semester. 

Grading:

We will have two midterm exams in this course.  You may think of each midterm exam as defining one “unit” of the course.  Each midterm exam is comprehensive in the sense that the material in this course builds upon itself.  However, the primary focus of each exam will be to test your understanding of the material in each unit.  The final, however, is explicitly cumulative.  The exams will be held during class, and the final exam will take place on the during the scheduled final exam period.  Each exam may consist of both multiple choice and essay questions.  I expect the exams in this class to be mostly (more than 85%) multiple choice with possibly one or two short answer questions.  I should warn you that many times I will write questions that test your mastery of the material by making you apply your knowledge to new and interesting questions; in microeconomics these questions often deal with real world examples of economic policy.  The exams will be held on the following dates:  EXAM I TBA, EXAM II, TBA, Exam III, TBA.

I will determine your course grade based primarily on the exams. The midterm exams will each have a weight of 25 percent; the final is worth 40%.  In addition, we will also have 3 quizzes.  I will throw out the lowest quiz when I calculate grades.  I will not give make up quizzes for any reason.  If you miss an quiz, that will constitute your lowest quiz score.  Each quiz will have a weight of 5 percent.  I “curve” the scores by adjusting the median of the distribution (in a practical sense, this adds a fixed number of points to each test) then assign letter grades using a standard grading scale (e.g., 80-82=B-, 83-86=B, 87-89=B+).  (Unfortunately, UMBC does not have a +/- system, but you get the idea.)  This means that your grade will be determined based solely on your performance, and not your performance relative to your classmates.  This system also allows you to compute your precise grade in the class at all times.  I round up, but I don’t fudge grades.

I strongly encourage you to purchase a copy of the study guide for this textbook and work the practice tests and application problems.  If you do, it will improve your score.

Case and Fair also have something called the “Microeconomics Explorer CD-ROM.”  I believe that it is included with your textbook.  The publisher assures me that it’s “The Most Powerful Economics Simulation CD-ROM Available!”  I am not sure how they know this, but give them the benefit of the doubt, and try it out. 

Lastly, I expect you to be familiar with, and to follow, the whatever honor code governs student conduct at UMBC and for all work related to this course.

Inclement weather policy: 

Should the university be closed because of the weather, and an midterm exam scheduled for that date, the exam will be postponed 7 days.  Quizzes, on the other hand, will be given during the next class session that the university is open. 

Important Dates:

Quizzes come between exams.

There may be one or two dates where class is cancelled.  I will inform you if this turns out to be the case.

Office Hours:

My office hours are first come-first served on Tuesday and Thursday from 945 to 1120.  My office is the administration bldg. Room 818.  You may also leave email messages for me at bobc@umbc.edu.  Let’s all agree not to use voice mail except for emergencies. 

Course Outline:

Course Outline:

 

I.    Fundemental issues and skills:

1.      What is Economics?

2.      Scarcity and Choice. 

3.      The Structure of the U.S. Economy: The Private, Public, and International Sectors.

4.      Demand, Supply, and Market Equilibrium.

5.      The Price System, Supply and Demand, and Elasticity.

II.   FOUNDATIONS OF MICROECONOMICS: CONSUMERS AND FIRMS.

1.      The Behavior of People I.

2.      The Behavior of Firms I (profit-maximization).

3.      The Behavior of Firms II (the short run).

4.      The Behavior of Firms III (the long run).

5.      Input Demand I: Labor and Land.

6.      Input Demand II: Capital Markets and Investment.

III. MARKET AND MARKET IMPERFECTIONS

1.      Markets I:  Perfect Competition.

2.      Markets II: Monopoly.

3.      Markets III:  Monopolistic Competition and Oligopoly.

4.      Antitrust Policy and Regulation. 

5.      Externalities, Public Goods, Imperfect Information and Social Choice.

6.      Income Distribution and Poverty.

V.  THE GLOBAL ECONOMY.

1.      International Trade, Comparative Advantage and Protectionism.

2.      Economies in Transition and Alternative Economic Systems.

3.      Economic Growth in Developing Nations.

(We will probably not get too far past this point)

IV. CURRENT MICROECONOMIC ISSUES.

1.      The Economics of Labor Markets and Labor Unions.

2.      Immigration, and Urban Problems.

3.      Current Topics in Applied Microeconomics: Health Care,

4.      Public Finance: The Economics of Taxation.

 

VI.  Miscellaneous things that I may talk about if and when it becomes timely

1.      The implications of economic integration in Europe

2.      The economics of recreational land use

3.      The underlying economics that pop up when you move across the country

4.      The microeconomic determinants of stock prices

5.      Any other weird and/or important economic event that comes up during the semester