Principles of Microeconomics

Econ. 102 (sections 03, 04, & 05)

Spring Semester 2007

Instructor: Dr. Ken Smith

Office: McComsey 326

Tel.: 872-3582

E-mail: kenneth.smith@millersville.edu

Office Hours: Mon. & Fri. 8:30 - 9:45, Wed. 3:00 – 4:30, and Tues. 10:00 – 12:00 (or by appointment – Tues. & Thurs., I’m usually pretty flexible)

Course Overview: This course provides an introduction to basic microeconomic principles and theory. In particular, economic principles and methodology are used to examine the behavior of individual consumers, households, and firms within the context of a market economy. Further we will explore what occurs when markets “fail” in some way and how the government might remedy market failures. As time permits, particular issues in microeconomics (e.g., optimal taxation, labor markets, etc.) will be examined in more detail.

The following competencies considered fundamental to an understanding of economics are covered in this course:

A. A thorough and complete understanding of the role of markets and market forces in our microeconomy.

(1) Be able to identify and explain the fundamental concepts of the market system such as the role of scarcity, opportunity cost, incentives, and marginal analysis.

(2) Be able to critically analyze, explain, and model the role of consumers in a market economy by using techniques such as supply and demand analysis and utility maximization.

(3) Be able to critically analyze, explain, and model production in a market economy by using techniques such as supply and demand analysis and profit maximization.

E. Develop and apply economic modelling skills, including:

(1) determination of main variables involved in an economic problem.

(2) specifying relationships between variables.

(3) specifying direction of causation between variables.

(4) recognition of interdependence and inter-linkages across relationships.

Required Text: Principles of Microeconomics (4^th edition), N. Gregory Mankiw

Core Reading (supplemental readings will be assigned when appropriate)

I. Introduction to Economics

a) Ch. 1 – Ten Principles of Economics

b) Ch. 2 – Thinking Like an Economist

c) Ch. 3 – Interdependence and the Gains from Trade

II. Supply and Demand

a) Ch. 4 – The Market Forces of Supply and Demand

b) Ch. 5 – Elasticities

c) Ch. 6 – Supply and Demand and Government Policy

III. Firm and Consumer Behavior

a) Ch. 13 – The Costs of Production

b) Ch. 14 – Firms in Competitive Markets

c) Ch. 7 – Consumers, Producers, and the Efficiency of Markets

d) Ch. 8 – The Costs of Taxation

IV. Market Failure and Government Intervention

a) Ch. 15 – Monopoly

b) Ch. 10 – Externalities

Grading System

Grades will be determined by cumulative point totals based on the following:

Midterm Exam 1 – 100 points (Mon. Feb. 19 – tentative)

Midterm Exam 2 – 100 points (Mon. April 2 – tentative)

Problem Sets – 120 points (6 in all – handed out periodically)

Final Exam (comprehensive) – 200 points Section 03 – Fri. May 11, 8:00 AM – 10:00 AM

Section 04 – Thurs. May 10, 8:00 AM – 10:00 AM

Section 05 – Tues. May 8, 10:15 AM – 12:15 AM

The midterm exams will be given in class and last 50 minutes. The final exam will be a 2-hour cumulative exam. Make-up exams will not be given without an excellent reason supported by documentation (i.e., a note from a doctor in case of illness). Cheating on an exam will result in a zero score on that exam. Cooperation on problem sets is encouraged though everyone must hand in each problem set. Late problem sets will be penalized 4 pts. for each day or partial day they are late unless a valid excuse is provided for missing the deadline.

The following is a reference representing the Maximum cumulative point total necessary to fall in each grade category. Final grades will likely be based on a curve.

A – 90-100%

B – 80-<90%

C – 70-<80%

D – 60-<70%