Principles of Microeconomics
Economics 101 - 004, Syllabus, Fall 2014
Class Hours: Mo / We / Fr, 12:00am-12:50pm,
08/28 – 12/09/2014
Class Room: Candler Library 114
Instructor:
Otto Lenhart
Office:
Rich Memorial Building 310B
Office Hours: Mondays, 4:00-5:30pm; Friday 1:00pm – 2:30pm and by appointment
E-mail:
otto.lenhart@emory.edu
Textbook:
Robert Frank and Ben Bernanke, Principles of Microeconomics, Fifth Edition,
McGraw (FB)
Course Description:
In this course, we learn the basic concepts and methods of microeconomics – the study of
how individuals make decisions and interact in markets, under conditions of perfect and
imperfect competition. We also apply these concepts and methods to a range of economic
questions and policy issues. One important set of policy issues is whether and how markets
may fail and whether, when they fail, government intervention may be needed to correct
those failures. Topics covered include demand and supply in competitive markets, market
power, game theory, externalities, and asymmetric information.
Course Outline and Readings:
1. Individual Decision Theory. FB, Chapter 1.
(a) Choice in a World of Scarcity
(b) Applying the Cost-Benefit Principle
(c) Important Decision Pitfalls
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2. Extension: Choice Under Uncertainty (Handout 1)
(a) Contingent Consumption and Expected Utility
(b) Risk Averse, Risk Neutral, and Risk Loving Individuals
(c) Application
3. Trade Theory. FB, Chapter 2.
(a) Exchange and Opportunity Cost
(b) Comparative Advantage and Production Possibilities
4. Market Competition and Social Efficiency
(a) Basics of Supply and Demand. FB, Chapter 3.
i.
ii.
iii.
Buyers and Sellers in Markets
Market Equilibrium
Predicting Changes in Prices and Quantities
(b) Demand. FB, Chapter 5.
i.
ii.
iii.
iv.
v.
The Law of Demand
Translating Wants into Demand
Applying the Rational Spending Rule
Individual and Market Demand Curves
Demand and Consumer Surplus
(c) Extension: Demand with some more Math
i.
ii.
iii.
iv.
v.
Total and Marginal Utility Functions with One and Two Goods
Allocating a Fixed Income Between Two Goods
Marginal Utility Functions and Indifference Curves
Rational Spending Rule Revisited
Deriving Optimal Choices
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(d) Perfectly Competitive Supply. FB, Chapter 6.
i.
ii.
iii.
iv.
v.
The Importance of Opportunity Cost in Supply
Individual and Market Supply Curves
Profit-Maximizing Firms in Perfectly Competitive Markets
Applying the Theory of Supply
Supply and Producer Surplus
(e) Efficiency and Exchange. FB, Chapter 7.
i.
ii.
Market Equilibrium and Efficiency
The Cost of Preventing Price Adjustments
5. Market Imperfections
(a) Monopoly. FB, Chapter 9.
i.
ii.
iii.
Profit Maximization for the Monopolist
The Deadweight Loss from Monopoly
Public Policy toward Monopoly
(b) Game Theory. FB, Chapter 10.
i.
Simultaneous-Move Games
A. Dominant Strategies
B. Nash Equilibrium
C. Applications
ii.
Sequential-Move Games
A. Incredible Threats
B. Subgame Perfect Nash Equilibrium
C. Applications
(c) Asymmetric Information. FB, Chapter 12.
(d) Externalities. FB, Chapter 11.
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Course Grading:
Your final grade for the course will be based on the following
components (with the weight of each component in parentheses):
1. Class-Participation and Assignments (15%)
2. First Midterm Exam (25%)
3. Second Midterm Exam (25%)
4. Final Exam (35%)
Class participation requirements:
Part of the requirement is that you attend class. In addition, I will regularly reserve time for
us to solve one or two problems from the book after we completed certain topics or
chapters. You must be actively involved in these class problem-solving sessions.
Assignments:
I will also give homework assignments from the book and additional assignments with
answers. I will collect and grade some of these assignments throughout the semester.
Completing the will help you better understand the material, participate in class, and
practice for the exams.
Exam Policy:
The Emory Honor Code is in effect for all the exams:
http://college.emory.edu/home /assets/documents/advising/homor_code.pdf
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