Intermediate Microeconomics

Course Description:

This course presents the conceptual foundations and analytical methods of microeconomics. It covers the basic theories of consumer and firm behavior, welfare economics, imperfect competition, market failures, and decisions made under conditions of uncertainty or asymmetric information.

We will begin this course by briefly reviewing and expanding upon the principles of supply and demand discussed in the principles of economics courses (EC 101 and EC 102). After this review, the rest of this course will be divided into six sections. The first part of this course will cover the theories of consumer preferences, consumer choice, and the demand curve. The second part of this course will discuss game theory and strategies used under conditions of uncertainty. The third part of this course will cover the production process and costs of production. The fourth part of this course will investigate the conditions under the perfectly competitive market structure. The fifth part of this course will cover the monopolistic, monopolistically competitive, and oligopoly market structures and how these types of firms engage in strategic behavior. Finally we will deal with the economic theory surrounding input market pricing, externalities, and public goods.

Since modern microeconomic theory is highly mathematical, the above topics will be discussed using basic concepts from single variable calculus. I will provide all of the background mathematical knowledge you need. However please see me if you have any concerns about your ability to understand the material using calculus.

Readings:

Walter Nicholson and Christopher Snyder. Intermediate Microeconomics. 10th edition.

Learning Objectives:

Having outlined our agenda for this course, my intent is that you will develop the following skills:

Understand more advanced microeconomics terms and concepts such as consumer theory and the theory of the firm
Understand the intricacies of various forms of organizing the production process
Appreciate the manner by which economic theory attempts to (and falls short of) understanding reality
Develop mathematical/quantitative/graphical skills as they apply to microeconomic thought
Utilize oral and written communication skills in the economic realm
Apply mathematical microeconomic theory to better understand and critically evaluate real world circumstances

Classroom Policies:

First, I don’t take attendance. As an economist, I believe that free choice in decision making yields optimal outcomes. I would, of course, strongly advise you to come to class if you wish to succeed and do well in the course (in fact, it is rare that someone that does not attend class would receive an A or B). You should not feel the need to seek my approval if you are going to miss class. It goes without saying that you are ultimately responsible for what is discussed in class (whether you are there or not). Obviously you are also required to attend class on days when there is an exam.

Second, unless you talk to me first, I cannot accept course work late or via email.

Evaluation:

Your performance in this course will be evaluated with problem sets, a term paper, and exams. Except for those with a college-approved excuse, under no circumstances will I allow you take an exam at a time different from the rest of the class. If you are sick and cannot show up for an exam, you will need a note from the health clinic. Furthermore, there will be no opportunities for extra credit.

Problem Sets/Presentations: 10%
Term paper and presentation: 15%
Exam I: 25%
Exam II: 25%
Exam III: 25%

Assignments/Presentations: This will consist of short problem sets and presentations of research articles to the class.

Term Paper: I will ask that you each prepare a 10-12 page analysis of a microeconomic topic that I assign to you. This paper will utilize the theory that you have learned over the course of the semester and incorporates both the popular and scholarly literature.
With the topic I have assigned to you, you will peruse the Wall Street Journal for articles that relate to your topic. I would like you to exclusively use this resource for “popular” literature on your topic. Once you have a collection of 5-8 WSJ articles, you will then start to peruse the professional literature for 2-3 articles on your topic.

From this collection of popular and professional literature and the theory you learned in class in mind, you will then do the following:

1.Provide a 1-2 page overview of the microeconomic theory with regard to how it applies to your topic.
2.Provide a 3-4 page summary of the professional literature and how it extends/critiques/applies the theory that we learned in class.
3.Provide an overview of how the various popular articles you selected apply to this theory and essentially “bring the microeconomic theory to life.”
4.Finally, provide a 1-2 page discussion of possible research topics in this field, areas where perhaps more research needs to be done.

This paper should have a bibliography, introduction, conclusion, and be organized. You must cite everything that is not your own contribution. If in doubt, cite!!!!

At the end of the semester you will present your paper to the class in the form of a PowerPoint presentation that will take approximately 7-10 minutes.

Exams: The exams will consist of mathematical problems, and short answer questions.



Academic Integrity:

The following excerpt is drawn from the course catalog but basically it can be summarized as “don’t cheat.” This applies to all work you complete in this course. However, you should feel free to collaborate with others in your completion of assignments. The work you turn in however must ultimately be your own.

Standards of Academic Integrity
Elizabethtown College assumes that students will act honorably. Students are expected to adhere to the Pledge of Integrity adopted by both the students and the faculty in 1995:
Elizabethtown College is a community engaged in a living and learning experience, the foundation of which is mutual trust and respect. Therefore, we will strive to behave toward one another with civility and with respect for the rights of others, and we promise to represent as our work only that which is indeed our own, refraining from all forms of lying, plagiarizing, and cheating.
Reflecting commitment to the pledge, new students are expected to sign a pledge stating, “I pledge to be honest and to uphold integrity.”
Academic Dishonesty, including cheating and plagiarism, constitutes a serious breach of academic integrity. Academic work is expected unequivocally to be the honest product of the student’s own endeavor.
Cheating is defined as the giving or receiving of unauthorized information as part of an examination or other academic exercise. What constitutes “unauthorized information” may vary depending upon the type of examination or exercise involved, and the student must be careful to understand in advance what a particular instructor considers to be “unauthorized information.” Faculty members are encouraged to make this definition clear to their students.
Plagiarism is defined as taking and using the writings or ideas of another without acknowledging the source. Plagiarism occurs most frequently in the preparation of a paper, but is found in other types of course assignments as well.
Other forms of academic dishonesty include (but are not limited to) fabrication, falsification, or invention of information when such information is not appropriate. To knowingly help or attempt to help another student to commit an act of
academic dishonesty is considered to be an equivalent breach of academic integrity and is treated as such.
Cases of academic dishonesty are reviewed individually and according to the circumstances of the violation; however, students who violate the standards of academic integrity can normally expect a grade of F in the course and/or possible dismissal from the College.

Disability:

If you have a documented disability please contact the Director of Disability Services in the Center for Student Success in BSC 288. You will also need to meet with me once you have obtained your accommodation letter from the Disability Services office to discuss how I can accommodate you.

Week of August 24:

Theme: Review of basic principles

Chapter 1: Economic models



Week of August 31:

No class on September 1

Theme: Theory of demand

Chapter 2: Utility and choice



Week of September 7:

Theme: Theory of demand (cont.)

Chapter 3: Individual demand curves

Chapter 4: Market demand and elasticity



Week of September 14:

Theme: Uncertainty

Chapter 5: Uncertainty

Chapter 17: Asymmetric information



Week of September 21:

Theme: Game theory

Chapter 6: Game theory

EXAM I



Week of September 28:

Theme: Production and cost

Chapter 7: Production



Week of October 5:

Theme: Costs of production and the goal of profit maximization

Chapter 8: Costs

Chapter 9: Profit maximization and supply



Week of October 12:

Theme: Perfect competition

Chapter 10: Perfect competition in a single market

Chapter 11: Applying the competitive model



Week of October 19:

Theme: General equilibrium theory

Chapter 12: General equilibrium and welfare

EXAM II



Week of October 26

Theme: Monopoly

Chapter 13: Monopoly



Week of November 2

Theme: Imperfect competition

Chapter 14: Imperfect competition



Week of November 9:

Theme: Input market pricing

Chapter 15: Pricing in input markets



Week of November 16:

Theme: Externalities and public goods

Chapter 18: Externalities and public goods



Week of November 23:

Research presentations

Week of November 30:

Catch-up



Week of December 7:
Exam III:
2:30pm – 5:30pm on December 9