School of Economics
Academic Year 2014-15
Term 2
COURSE CODE & COURSE TITLE
Instructor Name
: Massimiliano Landi
Email
: landim@smu.edu.sg
Tel
: 6828 0872
Office
: 04-37 SOE
COURSE DESCRIPTION
Intermediate microeconomics aims at providing the basic analytic tools that are required in upper level
economics classes at SMU, as well as showing how to use economic principles to explain details of
everyday life. Throughout the semester, you will be facing a variety of examples that help developing
economic intuition and demonstrating the relevance of economics. You will see how basic
microeconomic principles can help answer such questions as: Why has the demand for luxury grills
grown so rapidly in recent years?
Why do doctors and lawyers often offer discounts to people with low incomes? Why do lawyers in small
towns buy cheaper suits than their counterparts in big cities? Why are you bidding too much to enroll to
some classes at SMU? Why do some students work less than others in the group project?
You will also learn a set of analytical tools (Yes, we are going to use mathematics!) that are very helpful
in showing how those economic principles can be generalized to a variety of situations and topics. The
main difference between B and A sessions is that the former emphasizes more on using mathematics.
LEARNING OBJECTIVES
By the end of this term you will be able to fully appreciate the relevance of economic thinking, and
start applying it to any situation you may experience in your daily life. Moreover, by being exposed to
a variety of topics (such as consumer theory, theory of the firm, government intervention, labor
markets, strategic behavior and decision under risk) you will be able to make a more informed choice
among the upper level economics classes that you need to take for your curriculum. Last but not
least, you will be equipped with analytical tools that help you in taking those classes.
ASSESSMENT METHODS
Class Participation
Mid-term Test
Final Examination
Total
: 10%
: 40%
: 50%
: 100%
Midterm is 1 hour long. It comprises of some problem solving questions. Questions will be designed in
such a way that students will typically be able to complete each midterm within 45 minutes. (So 15
minutes are left to recover from panic attacks.)
Final examination is 2 hours long. It comprises two parts. Part 1 is comparable to what could have
been called midterm 2. Part 2 consists of 2 short questions, which can be drawn from any part of the
syllabus.
Participation: the grade will be assigned taking into account the following components:
1.
Homework participation: the grade is one a binary number: 1 for handing in the homework
on time, 0 otherwise. Please keep a copy of the homework for your reference, as I might
not return the one handed in to me. Submitting an empty homework is equivalent to
not submitting it.
2.
Attendance: one point for coming to class on time and behave; 0 points otherwise.
1
3.
4.
Involvement in the on-line forum and participation to consultation hours. For the forum
component you are required to write one question and / or one answer per week.
Anything more than that will add zero towards your grade.
Participation quiz: during the term classes may or may not begin with a short quiz whose
questions are taken from the past class’ topic. The decision of whether or not to give the
quiz is purely random. By answering correctly to the questions in the quiz, the student
gets 1 point.
A Cobb Douglas function will be used to turn all your scores in each of these components into a
participation grade. Specifically:
All the values of these components are normalized so that they range from 0 to 12. If you come to
class all the times, do all the homework assignments, are at the top for in class and on the forum
participation, and answer correctly all your participation quizzes, your score becomes 90, which
corresponds to an A+. As soon as you score 0 in either component, you fail in participation. (More
details are provided in class.)
As you will learn during this course, the property of this function is that diversification is best: do not
put all your eggs in one of the four baskets above!
ACADEMIC INTEGRITY
All acts of academic dishonesty (including, but not limited to, plagiarism, cheating, fabrication,
facilitation of acts of academic dishonesty by others, unauthorized possession of exam questions, or
tampering with the academic work of other students) are serious offences.
All work (whether oral or written) submitted for purposes of assessment must be the student’s own
work. Penalties for violation of the policy range from zero marks for the component assessment to
expulsion, depending on the nature of the offense.
When in doubt, students should consult the instructors of the course. Details on the SMU Code of
Academic Integrity may be accessed at http://www.smuscd.org/resources.html.
CLASS SESSIONS AND EXPECTATIONS
Class sessions are of 1.5-hour duration twice a week. Each session involves a lecture, active group
discussion of relevant issues, quantitative problem-solving, and review of homework assignments.
Students are strongly encouraged to think critically, challenge others intellectually, and be ready to
defend themselves. Do not expect me to spoon-feeding you the existing knowledge. In the spirit of the
SMU approach, I will rather assist you in exploring ‘new’ findings. So I will ask many questions in the
class and you are expected to think seriously about the answers rather than copying from books.
You are expected to look at the lecture notes before coming to class and to print them if you need a
reference. The use of the laptop is generally not allowed as it has proven to be more of a
distraction than a learning tool. Exceptions are made upon written request.
You are expected to do the homework independently and hand them in on time. You are encouraged,
however, to form small study or discussion groups.
There are no make-up exams and no acceptance of late assignments.
RECOMMENDED TEXT AND READINGS
th
Besanko and Braeutigam (2014) Microeconomics 5 ed. Wiley
2
WEEKLY LESSON PLAN
Week
Topic
Readings
Introduction, Demand and Supply
Chapters 1, 2
2
Consumer Preferences
Homework 1
Chapter 3
3
Consumer Choice
Chapter 4
4
The Theory of Demand
Homework 2
Chapter 5
5
Inputs and Cost Minimization
Chapters 6, 7
1
6
7
5 Jan 15, Mon
Cost Curves
Homework 3
Perfect Competition
Midterm Exam
Chapter 8
Chapter 9, 10
8
Recess Week
9
Monopoly and Price discrimination
Homework 4
Chapters 11, 12
10
Game Theory
Chapter 14
11
Duopoly, Oligopoly
Homework 5
Chapter 13
12
General Equilibrium and
Chapter 16
13
Market Failures
Homework 6
Chapter 17
14
Revision Week
15
Final Examination
3