Introduction to Microeconomics
Economics 102: Fall 2008
Section 220:102:06 (00239) Tuesday and Thursday, 2:15 pm – 3:35 pm Hickman Hall 138, Douglass College Campus
Instructor: Martin K. Perry, Ph.D., J.D. (Marty) Office: 106B New Jersey Hall Phone: 732-932-7572 Email: perry@econ.rutgers.edu Webpage: http://econweb.rutgers.edu/perry/ Office Hours: Tuesday and Thursday, 4:00 pm – 5:00 pm Cafeteria in Douglass Student Center Appointments: Wednesdays in New Jersey Hall Teaching Assistants: Ying Zhang Andy Vassallo
Room 104, New Jersey Hall, CAC Email: yizhang@econ.rutgers.edu Room 104, New Jersey Hall, CAC Email: avassallo@econ.rutgers.edu
Course Packet: There is no required or recommended textbook. Instead, we will
use my PowerPoint lecture slides (about 540). These slides can be purchased in a Pequod Course Packet (for $30-35) at the Douglass Student Co-Op Store. This Course Packet will have two slides per page. Alternatively, you can download the lecture slides from my webpage above under Teaching, 102, Lecture Slides. If you download the lecture slides, you can put them in any size and format that suits you.
Preparation for Lectures: We will cover about 20 slides in each lecture. Before
each lecture, you should read over the next group of slides. After each lecture, you should summarize your notes in some fashion. You can print out additional copies of the slides from my webpage in order to organize your notes. This will be particularly useful for the graphical slides. Since the exams are open book, organized notes will allow you to refer to them more efficiently during the exams.
Review Sessions: The teaching assistants are Ying and Andy. Ying will hold
weekly review sessions to go over the lecture slides from the past week. I will announce that schedule during the second week of class. Immediately before each examination, I will also hold several review sessions during the evening.
Examinations and Grading:
Midterm 1: TUESDAY, OCTOBER 7 (Hickman 138) (100 points) Section I and Section II Midterm 2: Tuesday, November 11 (Hickman 138) – firm date (100 points) Section III and part of Section IV Midterm 2 IS NOT Cumulative
Final: Monday, December 15, 8:00 – 11:00 AM (Hickman 138)
(200 points) YES, first thing in the morning Final IS Cumulative, but heavy emphasis on the remainder of Section III, Sections IV and V
The questions on all three examinations will be multiple choice questions. At least 60% of the questions will be graphical problems. The two midterms will each have 20 questions worth five points each, for a total of 100 points. The final examination will have 50 questions worth four points each, for a total of 200 points. Thus, the total number of points for the course is 400. All three examinations will be open book. You can use the Course Packet (purchased or downloaded from my webpage), your own notes, and any notes from your fellow students. I will post some practice problems on my webpage that you can download to prepare for the exams. These practice problems will not be graded. I will not take attendance. Since there are 25 lecture days and 400 questions, each lecture will cover the material for 16 points. In order to pass the course with a D, your total score must be at least 200 points (50%). In order to obtain a C, your total score must be at least 240 points of the 400 points (60%). For scores above 240 points, I will “curve” the final grades. Based on past classes, the lowest B will probably be somewhere between 280-300 points (70-75%) and the lowest A will probably be around 340 points (85%). There will be no extra credit of any kind, either during the semester or after the final examination. The results from the first midterm will be available before the last day to withdraw on OCTOBER 27. If you do poorly on this midterm, I will provide you will some data from prior classes so that you can decide whether you should withdraw from the course. In order to preserve your ability to withdraw from this course, it would be very prudent to take at least 15 credits. With 15 credits, you can withdraw from this course and still remain a full-time student with 12 credits.
Outline of the Lecture Slides
I.
Course Packet
Page 1 5 12 17 24 34
Introduction to Microeconomics (2 weeks) A. Market Economy and Legal Infrastructure B. Mathematical Fundamentals C. Graphing Functions D. Geometry and Areas E. Present Value of Stocks and Flows F. Valuation of Bonds and Common Stock Costs and Supply of Competitive Firms (3 weeks) A. Types of Costs B. Mortgages and Depreciation C. Variable Cost and Marginal Cost D. Competitive Firm and Profit Maximization E. Competitive Firm and Profitability F. Supply Curve of the Competitive Firm G. Bankruptcy: Reorganization and Liquidation H. Investments in New Plants or New Technology I. Decision Making under Uncertainty J. Futures Markets Demand by Consumers (2 weeks) A. Types of Goods and Services B. Budget Constraint C. Diminishing Marginal Utility D. Consumer Choice and the Expansion Path E. Demand Curve for Consumption Goods F. Shifts in the Demand Curve G. Consumer Surplus H. Demand Curve for Durable Consumer Goods I. Network Externalities
II.
42 47 54 62 73 77 81 85 92 97
III.
104 106 112 116 126 135 140 145 153
IV.
Monopoly and Imperfect Competition (3 weeks) A. Monopoly Pricing B. Consumer Surplus and Deadweight Loss C. Two-Part Tariffs D. Price Discrimination E. Dominant Firm F. Collusion and Cartels G. Oligopoly H. Monopolistic Competition I. Ad Valorem Sales Taxes Markets and Auctions (3 weeks) A. Elasticity of Industry Demand and Supply B. Open Auctions and the Competitive Equilibrium C. Supply Surplus and Shortage D. Efficiency of the Competitive Equilibrium E. Shifts in Demand and Supply F. Public Goods G. Continuous Auctions and Stock Markets H. International Trade I. Game Theory and the Nash Equilibrium
160 169 177 181 190 196 198 203 205
V.
208 212 219 222 227 239 248 254 261