AAEC 3580
Intermediate Economic Principles
Fall 2004
Instructor: Michael E. Wetzstein
Office: 315E Conner
Hall
I. INTENT:
This course is designed to build upon the
principles course with the intent to further investigate the efficiency and
equity impacts on social welfare. General equilibrium and welfare economics are
introduced and investigated under alternative market structures and economic
systems. The insight which elementary mathematics affords the study of economics
is explored.
II. TEXT:
Required: Wetzstein, M.E. Microeconomic Theory
Concepts and Connections. 2004.
III. PREREQUISITES:
(AAEC 2580 or ECON 2106) and (MATH
2110 or MATH 2210, 2210L)
IV. GRADING:
- Four examinations
- September 20, 2004 (20% of grade)
- October 22, 2004 (20% of grade)
- December 6, 2004 (20% of grade)
- Final Examination, Wednesday December 15, 2004, 8:00-11:00 a.m.
(30% of grade)
- Joint Problem Sets -- 10% of grade
Extra Credit Reports
Maximum Number: Two
Date Due:
October 25, 2004
December 8, 2004
Procedure:
Learn as much by writing as by reading. These
projects involve finding current (August 20, 2004 or later) articles in the
popular press (newspapers or magazines) and writing an economic analysis of the
content. The written report has a maximum of five typed double-spaced pages plus
a copy of the article with its date. The report should focus on an economic
model which provides qualitative support, contradicts, or both, aspects of the
popular reasoning. For most examples a complete geometric model will be
appropriate. Reports will be graded on the following basis: (1) Quality and
completeness of economic analysis, (2) Correct theoretical interpretation of the
article, (3) Quality of exposition and neatness of paper.
Tentative Schedule of Lecture Topics, Problem Sets, and Examinations
| WEEK | DATE | LECTURE/LAB TOPIC | PROBLEM SETS | |
| 1 | August | 20 | Introduction (Chapter 1) | |
| 2 | 23 | Math Review (Appendix) | Math Problems Due | |
| 23 | Preference Relations (Chapter 2) | |||
| 25 | Indifference Curves (Chapter 2) | |||
| 25 | Budget Constraint (Chapter 3) | |||
| 27 | Review (Chapter 2) | Chapter 2 Problems Due | ||
| 3 | 30 | Utility Maximization (Chapter 3) | ||
| 30 | Application (Chapter 3) | |||
| September | 1 | Review (Chapter 3) | Chapter 3 Problems Due | |
| 1 | Demand Functions (Chapter 4) | |||
| 3 | Comparative Statics (Chapter 4) | |||
| 4 | 8 | Review (Chapter 4) | Chapter 4 Problems Due | |
| 8 | Market Demand (Chapter 5) | |||
| 10 | Elasticity (Chapter 5) | |||
| 5 | 13 | Review (Chapter 5) | Chapter 5 Problems Due | |
| 13 | Pure Exchange (Chapter 6) | |||
| 15 | Efficiency of a Price System (Chapter 6) | |||
| 15 | Social Welfare (Chapter 6) | |||
| 17 | Review (Chapter 6) | Chapter 6 Problems Due | ||
| 6 | 20 | Review for Examination | ||
| 20 | Examination #1 (Chapters 1 - 6) | |||
| 22 | Production Functions (Chapter 7) | |||
| 22 | Isoquants (Chapter 7) | |||
| 24 | Answers to Examination | |||
| 7 | 27 | Elasticity of Substitution (Chapter 7) | ||
| Classifying Production Functions (Chapter 7) | ||||
| 29 | Review (Chapter 7) | Chapter 7 Problems Due | ||
| 29 | Cost (Chapter 8) | |||
| October | 1 | Average and Marginal Costs (Chapter 8) | ||
| 8 | 4 | Long-run Costs (Chapter 8) | ||
| 4 | Perfect Competition (Chapter 9) | |||
| 6 | Review (Chapter 8) | Chapter 8 Problems Due | ||
| 6 | Short-Run Equilibrium (Chapter 9) | |||
| 8 | Market Demand and Supply Shifters (Chapter 9) | |||
| 9 | 11 | Long-Run Equilibrium (Chapter 9) | ||
| 11 | Economic Efficiency (Chapter 10) | |||
| 13 | Review (Chapter 9) | Chapter 9 Problems Due | ||
| 13 | Review (Chapter 10) | Chapter 10 Problems Due | ||
| 15 | General Competitive Equilibrium (Chapter 11) | |||
| 10 | 18 | Efficiency in Production and Exchange (Chapter 11) | ||
| 18 | Competitive Economy (Chapter 11) | |||
| 20 | Review (Chapter 11) | Chapter 11 Problems Due | ||
| 20 | Review | |||
| 22 | Examination #2 (Chapters 7-11) | |||
| 11 | 25 | Answers to Examination #2 Report #1 Due | ||
| 25 | Monopoly (Chapter 12) | |||
| 27 | Inefficiencies of Monopoly (Chapter 12) | |||
| 27 | Regulation of Monopoly (Chapter 12) | |||
| 12 | November | 1 | Price Discrimination (Chapter 13) | |
| 1 | Review (Chapter 12) | Chapter 12 Problems Due | ||
| 3 | First Degree (Chapter 13) | |||
| 3 | Second Degree (Chapter 13) | |||
| 5 | Third Degree (Chapter 13) | |||
| 13 | 8 | Sequential Games (Chapter 14) | ||
| 8 | Review (Chapter 13) | Chapter 13 Problems Due | ||
| 10 | Game Theory (Chapter 14) | |||
| 10 | Pay the Game (Chapter 14 | |||
| 12 | Review (Chapter 14) | Chapter 14 Problems Due | ||
| 14 | 15 | Industrial Organization (Chapter 15) | ||
| 15 | Product Differentiation (Chapter 15) | |||
| 17 | Monopolistic Competition (Chapter 15) | |||
| 17 | Oligopoly (Chapter 15) | |||
| 19 | Review (Chapter 15) | Chapter 15 Problems Due | ||
| 15 | 22 | Competitive Input Markets (Chapter 16) | ||
| 22 | Marginal Productivity Theory (Chapter 16) | |||
| 16 | 29 | Comparative Statics in Input Demand (Chapter 16) | ||
| 29 | Review (Chapter 16) | |||
| December | 1 | Review | ||
| 1 | Monopoly Power in Input Markets (Chapter 17) | |||
| 3 | Examination #3 (Chapters 12 - 16) | |||
| 17 | 6 | Answers to Examination #3 | ||
| 6 | Wage Discrimination (Chapter 17) | |||
| 7 | Bilateral Monopoly (Chapter 17) | |||
| 7 | Labor Unions (Chapter 17) | |||
| 8 | Review (Chapter 17) | Report #2 Due | ||
| 8 | Review | |||
| 18 | 15 | Final Examination | ||