Course Description: Microeconomics studies the behavior of individual participants within the economic system. Models are developed and evaluated which explain the choices of consumers, producers and government agents related to consumption, production, and distribution of goods and services within the economy. Significant attention is paid to market theory, pricing policies, and incentives facing firms in different market environments ranging from the very competitive to the monopoly. Concepts covered include profit maximization, economic efficiency, market failure, resource markets, monopolistic competition, oligopoly, game theory, externalities and public goods.

Course Objectives: In this class you will learn to apply microeconomic models to evaluate many economic problems facing consumers, businesses, and government. As noted by the authors of the text, " For students who care about how the world works, microeconomics is one of the most relevant and interesting subjects they study. A good grasp of microeconomics is vital for managerial decision making, for designing and understanding public policy, and more generally for appreciating how a modern economy functions." The application of microeconomic models in a variety of contexts, with examples and problems, from the trivial (toothpaste prices) to the profound (organ transplants), will demonstrate the valuable contribution of economics to individual and societal decision-making.

About Class: Classes will consist of a mix of lectures, class discussion, and problem solving exercises. Regular class attendance is expected. If you miss a class, let me know in advance (e-mail or phone message) if possible, and be sure to see me or obtain the notes for the class from another student. Your grade for the class will be partly based on class participation.

Grades and Course Requirements: Final grades will be determined on the basis of the following. There will be three tests during the semester. The two highest scores will count towards your test average and the lowest one will be dropped.

1. Two tests (20 percent each) 40 percent

2. Four Problem sets (5 percent each) 20 percent

3. Class Participation 10 percent

4. Final exam 30 percent

Special Challenges: If you have a documented disability and wish to discuss academic accommodations, please meet with me within the first week of class or as soon as possible thereafter. Students who believe that they may have a disability, but who have not yet had their disability documented, should immediately contact and meet with the director of the Academic Support Center.

Text Book The required textbook for this course is Microeconomics, by Pindyck and Rubinfeld, available in the college bookstore. Supplemental problem sets will be handed out in class on a regular basis. A few additional readings may be placed on reserve in the college library. Students should also to keep up with current economic events by reading the New York Times, Wall Street Journal, Business Week, or the Economist on a regular basis. Subscriptions are not required. There is an excellent on-line study guide available through the publisher which provides sample questions to each chapter, and links to recent articles in the news. The link is as follows:

http://myphlip.pearsoncmg.com/bridgepage/index.cfm?vbridgeid=61 . Let me know if you have problems accessing this web page.

An outline of the class along with required readings, tests, and problem sets is presented below.

1. Economic Theories and Models

2. Supply and Demand Analysis

3. Elasticities of Supply and Demand

4. Applications of Supply and Demand

Readings:

***Problem set 1 due Friday, September 13

1. Assumptions about consumer behavior

2. The budget constraint

3. Consumer Preferences

4. Solving the Consumer Choice Problem

5. Applications of Consumer Theory

Readings: 1. Text, Chapters 3 and 4

*** Test # 1, Friday, Sept 27 ***

1. Production Functions

2. Cost Functions

3. Isoquants and Isocost lines

4. Short run and long run analysis

5. Applications of Production and Cost Theory

6. Profit Maximization and the competitive firm.

Readings: Text, Chapters 6 and 7

*** Problem set 2 due Friday, October 11***

1. Perfect Competition

2. Short run and long run analysis

3. The supply curve of an individual firm

4. The efficiency of perfect competition.

5. Applications using the Competitive Market Model

Readings: Text: Chapters 8 and 9

*** Problem set 3 due Friday, Oct. 25***

1. Monopoly

2. Monopolistic Competition

3. Monopsony

5. Government regulation of monopoly

6. Anti-trust

Readings: Text, Chapters 10 and 12

*** Test # 2, Friday, Nov 1 ***

Part VI. Oligopoly, Competitive strategy and pricing policies (1 and 1/2 weeks).

Readings: Text, Chapters 11 and 13

*** problem set 4, due Friday, November 15***

1. Derived Demands for Factors of Production

2. The Labor Supply Decision

3. Investment and the Marginal productivity of capital.

4. Saving, investment, and interest rates.

4. Applications of Factor Market Analysis

Readings: Text, Chapters 14 and 15

***Test # 3, Monday, Nov. 25***

1. The shortcomings of the market mechanism

2. Externalities

3. Public Goods

4. Evaluating Economic Welfare

5. Applications

Readings: Text, Chapters 16 and 18