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Microeconomics – Econ 1
Mark McNeil
Spring 2019

WELCOME TO ECON 1:  This is the first semester of the principles of economics series.  In this course, we focus on the behavior and decision-making processes of individual economic units – households, firms, individuals and government agencies as they make maximizing choices, given scarcity.  In this context, we study the topics of scarcity, markets, a price system, and costs.  Macroeconomics, Econ 2, looks at the economy as a whole – the unemployment rate, the level of output, interest rates, money and monetary policy, and international finance.
 
TEXT AND READINGS:  The text used in this course will be Microeconomics, A Contemporary Introduction, by William A. McEachern, 11th edition (ISBN-978-1-30550553-7). This book is available to rent or you can purchase the digital version. This text is also available for library use at the IVC reserve book desk. Many students find that the previous edition, the 10th, works very well also. There will be additional readings assigned as the term progresses. To sign up for the Wall Street Journal receiving the student subscription rate: www.wsj.com/studentoffer
 
GRADING:  There will be 3 midterm examinations (150 points total), a series of quizzes, homework assignments (100 points total), and a comprehensive final examination (100 points). The mid-term examinations and the final examination will be part multiple choice questions and part short essays and problems. The quizzes will be multiple choice only. For every test or quiz you will need to bring a Scantron form (one that has 5 possible answers, a-e) and a simple calculator. You may not use cell phones, PDA’s, or fancy calculators.  When I calculate the grade, I drop the lowest 50 point test score.  Final grades will be assigned as follows: 90% or more of the total points, A; 80% of the total points, B; 70%, C; etc.  The diagram below will help you keep track of your grades.  Please keep all returned tests, quizzes and homework for your records.
 
YOU ARE ENCOURAGED TO: 
1.     Attend. You need to attend class because you are responsible for what happens in the class – if a test or quiz is announced or if something is handed out; because you need a complete set of notes to study for tests or the final exam; because listening to the lectures is very helpful in learning the material; and because the instructor is insecure and feels he has no function in life when students do not attend the lecture - and do well in the class.
2.     Be Optimistic and Do the Work. Hard work and perseverance are rewarded. There is no substitute for spending the time to do the work.  Success in an economics class is almost always the result of hard work and a positive attitude.  This material is manageable - I promise. Stick with it.
3.     Ask questions. If you have questions or difficulties, ask.  Ask questions in class, ask other students, ask me, or go to the tutoring center in the library.
4.     Relate the course material to the real world. Since an economics course will help you understand your world much better, feel free to raise questions about economic events that are taking place during the semester.
5.     Enjoy the process. Learning involves work and is sometimes difficult, but it is also very satisfying and, in some strange way, fun. Make it a positive experience.


STUDENT LEARNING OUTCOMES:
1. Define and explain the fundamental economic problem of scarcity and its consequences - choice, cost, and economizing.
2. Use a production possibilities diagram to show and explain the concepts of limits, choice, cost, efficiency, and economic growth.
3. Construct a supply and demand model and use it to explain how prices are determined in markets.
4. Employ supply and demand diagrams to evaluate the consequences of legally imposed prices (ceiling and floor prices).
5. Calculate the elasticity coefficient for supply or demand in a market and interpret the result.
6. Differentiate the alternative definitions of profit, implicit and explicit costs; and use them to calculate profit given the appropriate data.
7. Apply the law of diminishing returns to show, calculate, and explain costs in the short run.
8. Define, explain and evaluate the different market structures.
9. Determine a firm's profit maximizing (or loss minimizing) quantity and the price given cost and revenue data, for each of the market types.
10. Critically evaluate the efficiency differences between purely competitive industries and monopolies.
11. Assess and interpret the market factors that determine the prices and quantities in resource markets.
SLO 1, Scarcity: Define and explain the fundamental problem of scarcity and its consequences - choice, cost, and economizing.
SLO 2, Production Possibilities: Use a production possibilities diagram to show and explain the concepts of limits, choice, cost, efficiency and economic growth.
SLO 3, Supply and Demand: Construct a supply and demand model and use it to explain how prices are determined in markets.


WEB SITES AND IMPORTANT DATES:
The McNeil, Microeconomics web page address http://www.mcneilecon.com

The tutorial videos can be found here:
http://mcneilecon.com/videopage.html

Please be aware of the following dates:
Martin Luther King, Jr. Holiday: Jan. 21
Last day to drop without a “W”:  Feb. 3
Lincoln/President's Day Holiday: Feb. 15-18
Spring Break: Mar.17-23
Last day to drop:  Apr. 10
Final Exams: May 16-22
Commencement: May 24


OFFICE HOURS:
Office number: BSTIC 201H-- Telephone: (949) 451-5313 -- e-mail: mmcneil@ivc.edu
Office Hours (please note that these are subject to change):
Monday, Tuesday, Wednesday: 2 - 3
Thursday: 10 - 11
Or by appointment.


This is a grid that will help you keep track of your grade in the course.

Grade Grid


ACADEMIC HONESTY:
a. It is a fundamental requirement of the course that you do your own work and abide by the academic honesty policy. If you cannot do this, you cannot pass the course.
b. Any work you turn in must be your own. If you study and do your homework with other students, you may work out the answers to the problems together, but when you write your answers on the homework paper, it must be in your own words.
c. The penalties for any type of cheating are very severe. Please be sure to do your own work.


FINAL MATTERS:
a. Mobile phones must be turned off. No exceptions.
b. If you want to make audio recordings of the class or use computers in class, please discuss this with me first.
c. The information on this syllabus is subject to change over the course of the semester. Information about any changes will be discussed with and provided to the class.
d. Please forward your student email account to your home account so that I can communicate with you should the need arise. (You can do this on MySite.)
e. All materials for this course are copyrighted. They may not be disseminated or used for anything other than your personal, private, study purposes unless you first recieve my written permission.
e. If you have any disability that impairs your ability to complete this class, please see the people at our DSPS office. They are very helpful.


COURSE OUTLINE AND ASSIGNMENT SCHEDULE

LESSON 1 Introduction

a. Economics, its relevance and usefulness.
b. On relationships - how do you know what you know?
c. A little math - very handy.
d. Scare City.
e. The economizing problem.
Reading assignment: Chapter 1, McEachern
Lesson 1: Lecture Outline, Study Questions

LESSON 2 Efficiency, Exchange and Comparative Advantage

a. Costs - opportunity, of course.
b. Production possibilities.
c. Specialization and comparative advantage.
Reading assignment: Chapter 2 & 19 (the first 6 pages), McEachern
Lesson 2: Lecture Outline, Study Questions

LESSON 3 The Four Sectors of the Economy

a. Households.
b. Firms - coordinated activities and transaction costs.
c. Government - and the inevitable.
d. The foreign sector.
Reading assignment: Chapter 3, McEachern
Readings on Externalities & Public Goods
Lesson 3: Lecture Outline, Study Questions

Test 1 (Chapters 1-3)

LESSON 4 Markets - the Fundamentals
a. The origin of prices - markets.
b. Supply and demand, making noises like an economist.
c. Equilibrium.
d. Controlled prices, surpluses and shortages.
Reading assignment: Chapter 4, McEachern
Lesson 4: Lecture Outline, Study Questions

Lesson 5 Elasticity - even marketing majors need to know this stuff!

a. Elasticity - the concept
b. Elasticity of demand
c. The other elasticities: supply, income, cross price
d. Applications of elasticity (and a couple of wrinkles)
Reading assignment: Chapter 5, McEachern
Lesson 5: Lecture Outline, Study Questions

LESSON 6 Demand and Consumer Utility

a. Diminishing marginal utility - why I drink tea on a Saturday night.
b. Utility maximization given some useful assumptions.
c. Consumer surplus, producer surplus and excess burden.
Reading assignment: Chapter 6, McEachern
Lesson 6: Lecture Outline, Study Questions

Test 2 (Chapters 4-6)

LESSON 7 Costs and Revenues

a. The rule.
b. Costs; long run, short run, and sideways.
c. Industry structure and the firm's revenues.
Reading assignment: Chapter 7,
McEachern Lesson 7:Lecture Outline, Study Questions

LESSON 8 Profit Maximizing Decisions and Market Types

a. Purely competitive markets
b. Making decisions in a perfectly competitive market.
c. And in the long run.
Reading assignment: Chapter 8, McEachern
Lesson 8: Lecture Outline, Study Questions

Test 3 (Chapters 7 & 8))

LESSON 9 Imperfect Competition

a. Monopoly, the real game
b. Oligopoly and monopolistic competition - a look at the real world.
c. Regulation or deregulation - issues and dilemmas.
Reading assignment: Chapters 9 & 10, McEachern
Lesson 9: Lecture Outline, Study Questions

LESSON 10 Resource Markets - Why LA Bron Makes a Fortune and I Don't

a. Resource markets - supply and demand (what else?)

Reading assignment: Chapter 11, McEachern
Lesson 10: Lecture Outline, Study Questions

LESSON 11 Capital and Financial Decision-making

a. Capital, interest and corporate finance - it's all about time.
b. Interest rate determination.
Reading assignment: Chapter 14, McEachern

LESSON 12 Environmental Economics

a. The problem with pollution.
b. Environmentally safe solutions?
Reading assignment: Chapter 18, McEachern
Final Examination

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©Mark McNeil 2019