Cal Poly Pomona

							Cal Poly Pomona, Spring 2009                                         Office: 1-339; Phone: (909) 869-5074
Professor: Bruce Brown                                               email: bbrown@csupomona.edu
Wednesdays 6-9:50 PM, Room 5-255                                     Office Hrs. Tu 9 AM-12; Wed 4-6 PM

                       ECONOMICS 550 – Microeconomic Analysis - CRN 32997

Course Description and Objectives:
This course focuses on the behavior of economic agents (consumers, firms, & government) and how they
interact in markets to determine prices and allocate goods. It presents supply, demand, and the underlying
optimization problems of consumers and producers. It illustrates the different outcomes which result from
different levels of competition. A theoretical role for government to increase efficiency in markets with public
goods, externalities, and how asymmetric information leads to the problems of adverse selection and moral
hazard problems will be presented. Graphs and math including calculus will be used to illustrate theory and
concepts.

The emphasis will be on problem solving. Many numerical problems will be solved during class, problem sets
will be assigned nearly each class meeting, and exams will require solving numerical and graphical problems.
Although all problem sets will be turned in individually, working and studying in groups will be very beneficial.
 Students should get to know other students and communicate with them outside of class. Feel free to ask any
and all questions during class.

Although prior economic backgrounds of students are likely very different, all students should be familiar with
the basic concepts of microeconomics which include: production possibilities frontier, supply, demand,
equilibrium, elasticity, production functions, utility functions, consumer maximization of utility and producer
maximization of profits, market structure (perfect competition, monopoly, oligopoly, monopolistic competition,
and oligopoly), externalities, public goods, etc. In general, this class focuses on the behavior of economic
agents (consumers, firms, & government) and how they interact in markets to determine prices and allocate
goods.

Students must devote a significant amount of time to this class to gain an adequate understanding of the
material, and see its relevance to the “real world.” After this class students should understand how economists
use theoretical models to usefully analyze real world economic phenomena.

Intermediate microeconomics and mathematical economics are official prerequisites for this class. An ability to
take derivatives in order to solve economic problems is essential. However, math should be seen as a tool, not
an end in itself in this class. Students who have less background, or who have taken prerequisites a long time
ago, will need to devote more time to this course in order to succeed.

Grading:
Course grades will be determined by the following weights: i) one comprehensive final exam - covering all the
material in the course (50%); ii) one midterm exam (25%); iii) assignments (20%); and iv) in class discussion
and participation (5%). As we have only 10 class meetings, if a student misses even one class it would be a
problem.

Required text:
Microeconomic Theory – Basic Principles and Extensions, 10th ed. by Walter Nicholson & Christopher Snyder

Additional text, possibly helpful:
Microeconomic Theory – An Integrated Approach, 2002; by Stephen Mathis and Janet Koscianski
Tentative Course Outline (subject to change)

Date                Lecture Topics                                          Chapters in Nicholson & Snyder

4/1    Introduction to the class; Whirlwind review of basic microeconomics, assumptions,           Ch. 1 &
       models, and examples of economic reasoning; review of important calculus topics.            2 (to pg 55)
       If students find Chapter 2 difficult, they should not wait until completely understanding
       all of it to proceed on to Ch. 3; Ch 2 can be referred to throughout the course.

4/8    Finish math review; Utility functions, preferences and indifference curves.                 Ch. 2 (to
                                                                                                   pg. 55) & 3

4/15 Utility maximization. Consumer response to changes in income and price; Indirect utility Ch. 4 & 5
     function, individual demand curves; Income compensated demand (utility constant).

4/22 Substitutes and complements in consumption Market demand and elasticities                     Ch. 5 & 6

4/29 Production functions, short run vs. long run with more than one input variable;               Ch. 9 & 10
     Returns to scale; Elasticity of substitution between inputs.

5/6    Cost functions and profit maximization.                                                     Ch. 10 & 11

5/13 Midterm Exam (during second half of class, after review and problem solving).

5/20 Partial equilibrium with perfect competition; Short run and long run; Welfare analysis        Ch. 12
     with consumer and producer surplus; International trade and restrictions.

5/27 Monopoly and Price discrimination                                                             Ch 14

6/3    Imperfect competition; Monopolistic competition and oligopoly; Review.                      Ch. 15

6/10 Final Exam - covering all course material (6:00 - 8:00 PM)

Other:

- Feel free to contact me by phone or email. If you can not attend office hours, please schedule an appointment.
- Exchange email addresses and/or phone numbers with classmates. If you can not avoid missing a class, be sure
to find out what happened and get notes for a classmate. Studying in groups is highly encouraged.
- There may be revisions to this syllabus. If so they will be announced in lecture.