ECN 201 (01 & 04) PRINCIPLES OF MICROECONOMICS Spring 2006

Prof. G. S. Suzawa Office: Chafee Social Science Ctr. 812

Office Tel. 874-4125 Regular Office Hours: MWF: 9 – 10 AM and 1 – 2 PM

(Will see students by appointment as well.)

COURSE CONTENT: This course deals primarily with the division of economics called "microeconomics." Microeconomics is the study of firm and individual decision-making behavior and the role of price changes in a capitalistic, market-based economic system such as that of the United States.

The subject matter of the course is divided into three (3) units for learning purposes. The first unit reviews the basic supply and demand model of market behavior, deals with the concept of elasticity, and also deals with the utility theory of consumer behavior and profit maximization of firms. The second unit covers production and cost aspects of a profit-making business firm, details how profit-maximization generates market supply under alternative market structures, and deals with the role of government in market intervention. The last unit deals with a mixed bag of subject matters: the labor markets, the distribution of income and government income redistribution programs, and the inability of markets to deal with public goods and negative externalities.

COURSE OBJECTIVES: This course entails both description and analysis. In one way or another, you will be exposed to a lot of factual information. In addition you will learn about concepts and models that help you understand what goes on in the economy and that help you make predictions about the future course of economic events. However, since information is readily available in our computerized, mass- media society, this course will emphasize the development of analytical skills and creative problem solving, i.e. the ability to think critically and creatively via the use of economic concepts and models. The primary objective is for you to achieve the highest level of understanding of economics.

METHOD OF INSTRUCTION: This course is based on a "tripod" principle of learning. The textbook, classroom presentations and homework assignments are all an integral part of the course. The textbook may do a good job of introducing you to economic concepts (principles) and of providing up-to-date economic information. However, the textbook is, at times, too simplistic and does not stimulate enough critical and creative thinking. This is where classroom presentations and homework assignments come in. Classroom activities will generally require a higher order of understanding than the just being able to regurgitate the materials in the text. During class sessions, I will attempt to challenge you to think more critically and creatively about economic matters. In class I will also provide some foundation for you to do the more difficult exercises on your homework assignments.

TEXTBOOK AND SUGGESTED REFERENCES: The required text for this section is John B. Taylor’s Principles of Microeconomics, 4th edition (Houghton Mifflin Co., 2004). I have made arrangements with the publisher to ship to our bookstore a shrink-rapped package consisting of Text and Student Technology Package. The Technology Package contains useful tools for self-study and practice questions for multiple choice type exams. However, if you think you can succeed in the course without the supplemental Student Technology Package, then you can make arrangements to purchase just a copy of the paperback text itself. In addition to the required text, students are encouraged to read the business and economic sections of such newspapers as the New York Times and the Wall Street Journal. Also, to scan such periodicals as The Economist, Fortune, and Business Week in order to obtain some idea of what is going on in terms of current economic events.

COURSE GRADING: There will be three term examinations corresponding to the three units mentioned above. The last exam will be held during the scheduled final exam period. All exams will consist of multiple choice type questions and will be scored on the basis of 100 points. Students are required to take all three exams.

In addition to the three exams, there will be three formal homework assignments issued during the semester. Homework assignments will consist of short essay questions and quantitative problems (not necessarily taken from the Study Guide). Each of the assignments will be due a week from the time they are distributed and will be scored on a 100 point’s basis. Exceptional homework papers will receive a bonus of 50 points. (This is restricted to no more than 2% of the class per assignment.)

Course grade is based on a performance standard. Your personal results will be reflected in your average (weighted) of homework and examination scores. The average of your three homework assignment scores will be equivalent to an exam score. That is to say, your course average will be obtained by applying a weight of 25% to each of your three exam scores and to the simple average of your three homework assignment scores. The significance of your course performance will be determined on the basis of where you stand in the combined distribution (Sections 01 and 04) of student weighted averages. Course grades are allocated in the following manner:

Top 15 percentile A's

Next 20 percentile B's

Next 40 percentile C's

Next 15 percentile D's

Last 10 percentile F's

This is a grading system that evaluates your performance on the basis of how you do relative to how the other students do in the course. There are no provisions for a higher grade via extra individual credits.

COURSE SCHEDULE TOPICS/(TEXTBOOK READING ASSIGNMENTS)__

Jan. 23, 25 Introduction to Discipline and Course orientation.

Jan. 27, 30, Feb. 1 Concepts and Models: Scarcity, Opportunity Costs,

Specialization and Exchange (Chapter 1).

Feb. 3, 6, 8 Methodology: Observing and Explaining (Chapter 2,

including Appendix).

Feb. 10, 13, 15 Basic Supply and Demand Model (Chapter 3).

Feb. 17, 22 Elasticity Concepts and Applications (Chapter 4).

Feb. 20 Holiday (No class)

Feb. 24, 27 Demand Curve and Consumer Behavior (Chapter 5

including Appendix).

Mar. 1 (Wed.) FIRST EXAMINATION (Chapters 1 to 5)

Mar. 3, 6 Supply Curve and Business Firm Behavior

(Chapter 6).

Mar. 8, 10 Economics of the Firm: Costs (Chapter 8 including

Appendix).

Mar. 13, 15, 17 Spring Break (No classes)

Mar. 20, 22 Interaction of People in Markets (Chapter 7).

Mar. 24, 27 Changing Market Structure (Chapter 9).

Mar. 29, 31 Monopoly (Chapter 10).

Apr. 3, 5, 7 Competition and Rivalry (Chapter 11).

Apr.10 (Mon.) SECOND EXAMINATION (Chapters 6 to 11)

Apr. 12, 14 Government Regulation/Antitrust Laws (Chapter 12).

Apr. 17 Income Distribution, Taxes, and Transfers (Chapter

14).

Apr. 19, 21 Public Goods, Externalities, Public Policy/Chapter

15.

Apr. 24, 26 Labor Markets (Chapter 13).

Apr. 28, May 1 Physical Capital and Financial Markets/Chapter 16

including Appendix).

TBA THIRD EXAMINATION (Chapters 12 to 16)

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