LAKE SUPERIOR STATE UNIVERSITY
EC202 Principles of Microeconomics (Fall 2004)
Dr. J.E. Erkkila Office: South Hall, Room 310 Telephone: 635-2108
E-mail: jerkkila@lssu.edu Office Hours: MW 11-11:50, T 1-2:50, R 1-1:50 &
by Appointment
Textbook: Case, K. and Fair, R. (2002). Principles of Economics. (7th
edition). Upper Saddle River, NJ: Prentice Hall.
Course Objectives
Your purpose in taking this course is to learn microeconomics with
particular emphasis on using microeconomics for decision making. The ways of
economic thinking will prove useful in problem solving and critical thinking
necessary to your functioning as a consumer, a provider of economic resources,
and as a citizen. The course focuses on the economic objective of efficiency
in the allocation of resources. Students will learn how the market performs in
meeting this objective. Students will be able to assess government efforts to
improve efficiency through regulation, taxation, and expenditure. At the
conclusion of this course, students should understand and be able to apply the
following economic tools and concepts:
1.Opportunity cost. The student will understand opportunity costs and be able
to use production possibility curves to explain the concept, particularly when
applied to problems dealing with choice and scarcity.
2.Thinking incrementally. The student will be able to use marginal analysis
in making choices. Students will understand how the concepts of incremental
costs and incremental benefits are used by consumers to make rational choices,
by businesses to maximize profits, and in the public sector to provide for
appropriate governmental programs.
3.Trade promotes growth. Students will understand and be able to explain the
concept of comparative advantage and its application to free trade, both
domestically and globally, and how specialization in production and trade
allows for greater levels of production and consumption.
4.Markets coordinate consumption and production. Students will understand the
forces that determine market prices -- supply and demand--and how these
market-determined prices help society allocate resources efficiently.
Students will
 be able to use the concept of elasticity to explain the magnitude of price
changes.

understand the underlying concepts of demand including utility and
indifference curve analysis.
 be able to explain economic efficiency and measure inefficiency using the
concepts of consumer surplus and producer surplus.
 understand the theory of production and economic costs including average,
total and marginal costs.
 be able to explain and evaluate price and output determination under purely
competitive market conditions, and in the models of pure monopoly,
oligopoly, and monopolistic competition.
 understand how resource prices, and incomes, are determined.
5. Markets can fail. Students will understand when government efforts to
modify income distribution, or to change resource allocation, are desirable,
and the form that the intervention should take. Students will be able to
evaluate government actions and be more effective citizens.
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Student Evaluation
Students should focus on mastering microeconomics rather than trying to
obtain a specific grade. There is usually a high, positive correlation between
a knowledge of microeconomics and a grade. There are no make-up tests unless
you are excused by a university vice president or let me know 24 hours in
advance. You will need a Scantron and No. 2 pencil for all tests and for the
final exam
Evaluation
10 Quizzes
Test 1
Date
Every Wednesday,
Except Test Days,
Starting Sep 8th
Sep. 29th
Test 2
Nov. 3rd.
Final Exam
Monday, Dec. 13th
12:30 – 2:30
Coverage
One Week’s Material
Everything We Have Done
Up to the End of Ch. 4
Chs. 5 to 8
Appendicies to Chs. 5 &
6
Comprehensive
But With Emphasis on
Chs. 7, 12
Total
100 Points
50 Points
50 Points
100 Points
300 Points
Extra Credit Assignment: There is no extra credit.
Grade ranges are: A+ 100-97, A 96-93, A- 92-90, B+ 89-87, B 86-83, B- 82-80 C+
79-77, C 76-73, C- 72-70, D+ 69-67, D 66-63, D- 62-60, F < 60
Students who attend all classes, take all the quizzes and tests, will
receive a grade no lower than that earned on the final exam. I reserve the
right to alter calculated grades based on attendance and my assessment of the
student’s acquired knowledge in the class.
Attendance Policy
I have one rule –DO NOT MISS ANY CLASSES. Attendance is taken every day.
Research shows that grades and attendance are positively correlated. Put
simply, if you do not attend class, you do not pass. You are expected to
attend class. As adults, you are free to make your own choices but you must
also be prepared to accept the consequences.
Disability Statement:
In compliance with Lake Superior State University policy and equal
access laws, disability-related accommodations or services are available.
Students who desire such services are to meet with the professor in a timely
manner, preferably the first week of class, to discuss their disabilityrelated needs. Students will not receive services until they register with
the Resource Center for Students with Disabilities (RCSD). Proper
registration will enable the RCSD to verify the disability and determine
reasonable academic accommodations. RCSD is located in Library 101. The
telephone number is (906) 635-2454.
Resources:
1. Tutor or Supplemental Instructor
2. There is a study guide on reserve in the Library
3. There is a film called Economics, Microeconomics on reserve in the Library.
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Course Outline
Schedule is Subject to Modification
Assignment
Ch. 1, pp. 23-27 & 35-39, pp. 667-672
Date
Aug. 30,
Sep. 1, 3
Sep. 8, 10, 13, 15, 17
Ch. 3, Ch. 4
Sep. 20, 22, 24, 27
Ch. 4 , pp. 369-371
Sep. 29
Oct. 1, 4
Oct. 6, 8
Oct. 11, 13, 15, 18
Oct. 20, 22, 25, 27
Oct. 29, Nov. 1
Nov. 3
Nov. 5, 8
Test 1
Ch. 5 & Appendix
Ch. 6 pp. 136-142 & Appendix
Ch. 7 & pp. 151-162
Ch. 6 pp. 129-136, Ch. 7 pp. 162-169, Ch. 8
pp. 173-180
Ch. 8 pp. 180-191
Test 2
Ch. 9
Nov. 10, 12, 15, 17, 19
Ch. 12
Nov. 22, 29
Ch. 13
Dec. 1, 3, 6, 8, 10
Dec. 13th
Ch. 14 pp. 317-336, pp. 338-340
Final Exam – Comprehensive
12:30 – 2:30
Topic
Introduction, Opportunity Cost, the
Optimum Quantity, Production Possibility
Frontier, Gains from Trade
Demand and Supply, Price Rationing,
Price Ceilings & Floors, More Trade,
Consumer Surplus, Producer Surplus,
Deadweight Loss (Excess Burden)
Elasticity, Revenue & Elasticity,
Deadweight Loss
Utility Theory, Indifference Curve Theory
Theory of Production
Theory of Costs in Short-Run
Theory of Perfect Competition
Costs & Output Decisions in the Long-Run
Theory of Input Demands in Perfect
Competition
Theory of Monopoly, Efficiency Aspects
of Markets, Antitrust
Theory of Monopolistic Competition &
Oligopoly
Theory of Market Failure
Relationship of Course to Outcomes of the School, of Business, Economics, & Legal Studies
Outcome one: Graduates will demonstrate knowledge in microeconomics, one of the business-core subjects.
Graduates will know the economic environment of business .
Outcome three: Graduates will demonstrate skills in critical thinking.
Outcome eight: Graduates will appreciate the work ethic.
State Standards met by this course
2.2.4
demonstrate how a free and competitive economy operates through
monetary exchange, market pricing, and the law of supply and demand
2.2.5
identify key U.S. economic measures in terms of gross domestic product,
employment, unemployment rate, inflation, and capital spending
2.2.7 explain how allocating private and public resources affects the economy
2.2.8 describe the rights and responsibilities of citizens in the U.S.
economics prosperity
2.2.9 use a rational decision making process as it applies to the role of
citizens, workers and consumers
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Schedule for TR Class
Date
Jan. 14, 16
Jan. 21, 23, 28
Jan. 30
Feb. 4, 6
Feb. 11, 13
Feb.
Feb.
Feb.
Mar.
18
20, 25
27, Mar. 11
13, 18
Mar. 20
Mar. 25, 27
Apr. 1
Apr. 3, 8
Apr. 10
Apr. 15
Apr. 17, 22
Apr. 24
Apr. 29
Course Outline
Schedule is Subject to Modification
Assignment
Topic
Ch. 1, Ch. 2 pp. 25-29 & 36-40, Introduction, Opportunity
Ch. 30 pp. 667-674
Cost, Production Possibility
Frontier, Gains from Trade
Ch. 3, Ch. 4 pp.75-84, Ch. 5
Demand and Supply, Price
pp. 116-118
Rationing, Price Ceilings &
Floors, Trade, Consumer
Surplus
Test 1
Ch. 4 pp. 75-96, Ch. 14 pp.
Elasticity, Revenue &
345-346
Elasticity, Excess Burden
Ch. 5 & Appendix
Utility Theory, Indifference
Curve Theory
Test 2
Ch. 6 pp. 140-146 & Appendix
Theory of Production
Ch. 7 pp. 155-166
Theory of Costs
Ch. 6 pp. 133-140, Ch. 7 pp.
Theory of Perfect
166-172
Competition
Test 3
Ch. 8
Costs & Output Decisions in
the Long-Run
Ch. 9
Theory of Input Demands
Ch. 12
Theory of Monopoly
Ch. 13
Theory of Monopolistic
Competition & Oligopoly
Test 4
Ch. 14 pp. 317-336, pp. 338-340 Theory of Market Failure
Ch. 11
Perfect Competition &
Efficiency
Final Exam – Comprehensive
12:30 – 2:30 LBR 203
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