COURSE SYLLABUS Economics 202 Principles of Microeconomics ...

COURSE SYLLABUS Economics 202 Principles of Microeconomics (with experimental applications) University of Alaska Anchorage Fall 2006 GENERAL INFORMATION INSTRUCTOR: Lance Howe, Ph.D. COURSE HOURS: M,W 4-6:45 SECTION #: 604 EMAIL: [email protected] PHONE: 786-5409 ROOM #: RH 202 OFFICE: RH 214; DIP 501D OFFICE HOURS: Mon. & Wed., 1-2pm COURSE DATES: August 28-Oct.16 COURSE WEB PAGES: main: http://www.iser.uaa.alaska.edu/iser/people/elhowe/ECON_F06 other: econ.aplia.com COURSE OBJECTIVES This is a course in principles of microeconomics. Similar to standard courses we will cover core economic concepts (as described in the course outline). In addition, we will integrate experimental methods of economics throughout the course in order to more effectively communicate core concepts. As such, in addition to lectures, readings, and analytic problem solving we offer students a hands-on method to better understand principles of microeconomics. Economics is a social science. Similar to other sciences, economists typically explore economic questions within the confines of an economic model. As we will see, certain questions can also be explored in the “economics laboratory.” At the micro level economists are particularly interested in behavioral issues. That is, given a certain set of rules, or an institutional framework, how do human subjects act or behave. When the environment or the rules change, for instance, the introduction of price controls or the concentration of market power with one buyer or seller, how does behavior change? From this “positive” framework (what is the case given certain assumptions) “normative” conclusions (what ought to be the case) can be drawn by policy makers. As such, economics is an important tool used in a wide range of disciplines including law, public policy, health, banking, business, forestry, wildlife management, and agriculture. Throughout our studies we will seek to apply what we are learning to contemporary issues. Students who successfully complete the course should have a better understanding of microeconomics, experimental economics, and the market system in general. Students will be equipped with new analytic tools that can be applied in one’s field of choice. REQUIREMENTS AND GRADING REQUIRED RESOURCES: 9 Experiments with Economic Principles: Microeconomics (2’nd edition, 2000, ISBN:0-07226518-X) by Theodore C. Bergstrom and John H. Miller 9 Online textbook which requires an APLIA subscription (http://econ.aplia.com see page 6 for details): Microeconomics: Principles and Policy (10’th edition, 2006) by Alan Blinder and William Baumol

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APLIA: As noted above Aplia is a required resource. By purchasing an Aplia subscription you have access to a pdf file of the actual textbook and multiple integrated problem sets. The Baumol and Blinder textbook on Aplia is less than ½ of the physical textbook price. Also, if you wish to have a hard-copy of the book you may purchase this through Aplia at a highly discounted price. The last page of the syllabus contains the Aplia registration information. In the course schedule below we have mapped out the reading schedule that corresponds with the outline we will most likely follow in this course. I suggest that you print out the Baumol and Blinder chapters from Aplia.com during the first week of class or save them as pdf files that you can easily reference later in the course. OPTIONAL: 9 It is recommended that you periodically read the business sections of major newspapers (all available on-line) including the Anchorage Daily News, the New York Times, and the Washington Post. Better yet, you can subscribe to the Wall Street Journal. The Journal offers a special student subscription for one semester that includes hard copies plus unlimited online access for around $35. You can register by filling out an inclass form, calling 800-975-8602, or register online at: http://subscribe.wsj.com/semester 9 Check out www.collegejournal.com – the Wall Street Journals free webpage for students – includes job listings and internship opportunities. GRADING: The course grade will be determined as follows: Problem Sets Attendance and Experimental payoffs Midterm Final Exam

20 % 10 % 30 % 40 %

(Monday, October 16, 4-6:45)

The final exam time is firm and if it conflicts with your schedule we need to discuss alternatives during the first week of class. There are generally no makeup exams. For students who miss an exam due to a documented emergency or University sponsored event other contributors to the course grade will be weighted more heavily. As with other courses here at UAA, students must adhere to complete academic integrity. In this course, we will strictly adhere to the guidelines set by the University. EXPERIMENTS AND PROBLEM SETS In the course schedule below we have identified prospective dates for experiments although this schedule may change. Because we are holding our class in the lab we can be flexible about when we run experiments. It is very important that you are present during experiments. Also there is generally some “pre-experiment reading” that you should plan to complete prior to a scheduled classroom experiment.

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Note that experiments count two ways toward your grade. First, you are graded based on performance in a particular experiment. Attendance and experimental payoffs will make up 10% of your final grade. Second, most of the homework will be based on analyzing outcomes from experiments. Homework makes up 20% of your final grade. The problem sets you will be asked to solve will be a tremendous aid to you in understanding key course material. Problem sets will be announced in the class and experimental results needed for each assignment will be posted on the course webpage. Solutions to the assignments will be posted on the due dates and consequently, NO late homework can be accepted. Important Note: As you know this course has about half the number of days as a traditional semester course (our final exam is on October 16). As a result, we have a very intense schedule during the days that we meet. It is really important that you come to class (missing one day is like missing two days of a regular semester long class) and keep up with the readings. The payoff for your hard work will include an in-depth knowledge of microeconomic principles and, as a bonus, you will be done with this class before the snow accumulates! Here are some study hints: 1. Come to class prepared and engaged - skim or read material before class - take good notes and ask questions 2. Interact with material after class - re-read chapters after class paying particular attention to concepts discussed in the lecture - revisit your class notes and highlight concepts that you are having difficulty with, write out your question, and ask it in the next class or during office hours 3. Start on the homework early 4. Form a study group with other students A projected course outline is given below. While considerable effort will be made to stick to this outline some modifications may be necessary. The most current version of the course outline will be posted on the course webpage: http://www.iser.uaa.alaska.edu/iser/people/elhowe/ECON_F06

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Course Outline: Class # 1

Date Monday, August 28, 2006

Topics Organization and Introduction Experimental Methods Scarcity and Opportunity Costs Experiment 1: Double Oral Auction experiment prep: read Bergstrom and Miller (EEP) pp.1-6 Baumol and Blinder (BB) Ch. 3 "Scarcity and Choice"

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Wednesday, August 30, 2006

Introduction to Supply and Demand Exploring Demand Experiment 2: Shifting Supply and Demand Pre-class experiment prep: read EEP pp. 39-41 Pre-class reading: Bergstrom and Miller (EEP) pp. 7-24 BB Ch. 4 "Supply and Demand: an initial look" (skip pages 65+) Aplia HW due

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Monday, September 4, 2006

LABOR DAY HOLIDAY – UNIVERSITY CLOSED

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Wednesday, September 6, 2006

Demand (continued) and Comparative Statics Introduction to Elasticity Experiment 3: Sales Taxes experiment prep: read EEP pp. 59-61 Pre-class reading: EEP pp. 42-52 & 401-413 BB ch. 5 "Consumer Choice" and ch. 5 Appendix HW #1 Due: - EEP pp. 29-38

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Elasticity (cont.) Production and Costs Pre-class reading: BB Ch. 6 "Demand and Elasticity” BB Ch. 7 "Production, Inputs, and Cost" EEP pp. 42-52 and 401-413 HW #2 Due: EEP pp. 53-56 & Handout on Demand and Elasticity

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Wednesday, September 13, 2006 Production and Costs (cont.) Profit Maximization and Marginal Analysis Pre-class reading: EEP pp. 62-84 BB Ch. 8 "Marginal Analysis and Maximization of Total Profit

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Profit Maximization (cont.) The Firm and the Industry Experiment 4: Minimum Wage experiment prep: read EEP pp. 119-122 Pre-class reading: BB ch. 10 "The Firm and the Industry Under Perfect Competition"

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Wednesday, September 20, 2006 The Firm and the Industry (cont.) Market Efficiency and Interventions Pre-class reading: BB Ch. 4 pages 65+; Ch. 14 "The Price System and the Case for Free Markets" HW #3 Due: Handout on Profit Maximization

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Market Efficiency and Interventions (cont.) Review for Midterm 1 Experiment 5: Monopoly experiment prep: read EEP pp. 185-191 HW #4 Due: pp. EEP pp.79-90 & 140-152

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Wednesday, September 27, 2006 Exam #1 (4:00 - 5:30) Monopoly and Oligopoly (5:45-6:45)

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Monday, October 2, 2006

Monopoly and Monopolistic Competition Experiment 6: Externalities and Public Goods experiment prep: read EEP pp. 155-158 Pre-class reading: BB ch. 11-12 EEP pp. 192-211

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Wednesday, October 4, 2006

Externalities and Public Goods Pricing the Factors of Production Pre-class reading: EEP 159-170 BB ch 17 HW #5 Due: pp. EEL pp.212-222 & Handout

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Pricing the Factors of Production (cont.) Experiment 7. Auctions Pre-class reading: BB pp 127-131 & chapters. 19 -20

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Wednesday, October 11, 2006

Auctions Pre-class reading: EEP 351-369 HW #6 Due: Public Goods and Factors of Production

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Final Exam: 4:00-6:45

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Student Registration Instructions

Principles of Microeconomics, Fall 2006, Howe Professor E. Lance Howe

Course Name: Prin of Microeconomics, Fall 06 (Baumol & Blinder) Start Date: 08/28/2006 Course Key: V7K8-PVJX-9BBN You can begin working on your homework as soon as you register! • In this course, you will use a textbook and a website. • You will save money if you buy these together. • Don't buy anything until you understand your alternatives.

Registration Registration Instructions 1. Connect to http://www.aplia.com . 2. Click the System Configuration Test link below the Sign In and Register sections to make sure you can access all of the features on Aplia's website. This takes just a few seconds and tells you how to update your browser settings if necessary. 3. Return to http://www.aplia.com . • If you have never used Aplia before, click the New Student button to register and follow the registration instructions. • If you have used Aplia before, sign in with your usual e-mail address and password. If you are not prompted for a new Course Key, click the Enter Course Key button to enroll in a new Aplia course. 4. During registration, enter your course key: V7K8-PVJX-9BBN. 5. If you understand your payment options, pay now. Otherwise, postpone your purchase decision by choosing the option to pay later. Your payment grace period ends at the end of the day on 09/17/2006. Payment Pay Aplia Directly • Purchase access to your course directly from Aplia on our website for $60.00 USD. The website includes: - An online copy of your textbook. - Content that has been customized for your textbook and course. • However, if you try using the online textbook and decide you would also like a physical textbook, you can order one from Aplia for $50.00 USD plus shipping.

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