Introduction to Microeconomics
Economics 102: Spring 2009
Section 220:102:03 (Index #43267) Monday and Wednesday, 5:35 pm – 6:55 pm Hickman Hall 138, Douglass College Campus
Instructor: Martin K. Perry, Ph.D., J.D. (Marty) Office: 106B New Jersey Hall, College Avenue Campus Phone: 732-932-7572 Email: perry@econ.rutgers.edu Webpage: http://econweb.rutgers.edu/perry/ Office Hours: Monday and Wednesday, 9:00 – 10:00 pm, 106B NJ Hall Appointments: Tuesday afternoon or early evening, 106B NJ Hall Teaching Assistants: Ying Zhang Yoichi Otsubo
Room 104, New Jersey Hall, CAC Email: yizhang@econ.rutgers.edu Room 102, New Jersey Hall, CAC Email: yotsubo@econ.rutgers.edu
Course Packet: There is no required or recommended textbook. Instead, we will
use my PowerPoint lecture slides (564). A Pequod Course Packet with these slides can be purchased for about $30 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.
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. The exams are open book, so if your notes are organized, you can refer to them more efficiently during the exams. Color pens or pencils are helpful for identifying the important areas in the graph slides.
Review Sessions: The teaching assistants 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 one or two review sessions during the evening.
Examinations and Grading:
Midterm 1: Monday, March 2 (Hickman 138) – tentative date (100 points) Section I and Section II Midterm 2: Monday, April 6 (Hickman 138) – tentative date (100 points) Section III and parts of Section IV Midterm 2 IS NOT Cumulative
Final: Friday, May 8, 4:00 – 7:00 PM (Hickman 138)
(200 points) Final IS CUMULATIVE But heavy emphasis on the 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. For each exam, I will post practice problems and study hints on my webpage. You can download these files to prepare for the exams. You can also bring these to the exams. The practice problems will not be graded. I will not take attendance. Since there are 25 lecture days and 400 points, each lecture will cover the material for 16 points. Thus, missing two or three lectures puts an entire letter grade at risk. 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 near 300 points (75%) and the lowest A will probably be near 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 MONDAY MARCH 23. If you do poorly on the first 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 (or any other course) and still remain a full-time student with 12 credits.
Outline of the Lecture Slides
I.
Course Packet
Page 1 5 12 17 25 36
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 Technologies 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.
45 50 57 65 74 78 82 86 93 98
III.
105 106 112 116 127 136 141 146 152
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. Cartels and Collusion 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
159 170 178 182 192 198 202 207 211
V.
214 218 224 227 233 246 255 261 268