UNIVERSITY OF WATERLOO
Department of Economics
Economics 101-003 - Introduction to Microeconomics
9:30 - 10:20 a.m. MWF in DC 1351
E. Lau
Fall 2007
Course Objectives and Overview
The objective of this course is to help the students to understand and learn the basic principles of
microeconomics and to enable the students to appreciate economics in our daily life. Students
should note that Econ 101 is primarily a theory course, but ample applications of the theoretical
model will be sampled. Economics is concerned with choices that must be made because all
resources are scarce. The fundamental economic problem is to allocate labour and physical
resources to various types of production and leisure activities in the most desirable way. To this
end, economics focuses on the supply of goods (production) and the demand for goods (for
consumption), and examines whether goods are produced and distributed in an efficient manner.
Below is a complete list of topics to be covered in this course.
Text
Parkin and Bade, Microeconomics, 6th edition, (Addison Wesley).
Examinations - All examinations in the course are in multiple choice format, no Apenalty marking@.
A)
3 in-class mid-term tests:
September 28
20%
October 28
20%
November 16
20%
B)
Final Examination (covers all material)
40%
Total
100%


There are no deferred or make-up term tests. If you miss a test due to illness, please remit
>valid= documentation to E. Lau for approval. You may then shift the weight of the test to
the final exam.
Marks will be posted intermittently in the classroom. We regret that marks cannot be
posted in public or sent out to individuals via e-mail or by phone.
Consultation
3. Students are encouraged to discuss their questions or problems about the course/course
materials with me during office hours, Mondays and Wednesdays 1:00 p.m. -3:00 p.m.
and during tutorials. Other times can be arranged by appointment. While some students
may warrant extra attention, on average, private consultation with myself or the course TA, is
limited initially to 2 hour per student per term. My office is located in Room 217, Hagey
Hall, extension 33560.
4. Ask the Prof / TA / Peers= Web Page
Please post ALL questions relating to the course via the UW-ACE communication web page.
Peers= response to the posted questions are strongly encouraged and much appreciated.
Bonus marks will be awarded to students who continuously responded to peers= postings as
well as those who post insightful questions/comments. Personal questions and comments
can be emailed directly to: elau@uwaterloo.ca
5. Important announcements, additional course information, course notes, and T.A. office hours
can be accessed through the UW-ACE course web page.
Page 2
Lecture Topics and Readings
I.
Scarcity and Choice, Text, Ch. 1, 2
1.
wants and scarcity
2.
normative and positive economics
3.
opportunity cost
4.
production possibility curve
5.
absolute and comparative advantage
II.
Demand and Supply: The Market, Text, Ch. 3, 6
1.
shifts of the demand curve
2.
shifts of the supply curve
3.
equilibrium price and quantity
III.
Demand and Supply Elasticity, Text, Ch. 4
1.
price elasticity of demand
2.
price elasticity of supply
3.
income and cross elasticities
IV
Markets in Action, Text, Ch 6
1.
surpluses and shortages; price ceiling, price floor
2.
unit taxes
3.
markets in action
September 28 - In-Class Test #1 - Chapters 1, 2, 3, 4 ( P. 84- 87), 6 (p.124-128)
V.
Theory of Demand - Consumer Behaviour, Text, Ch. 7, 8
1.
marginal utility rule, Ch.7
2.
consumer surplus - Ch.7
3.
indifference curve/budget analysis, Ch.8
4.
deriving an individual=s demand curve, Ch.8
VI. Organizing Production, Text. Ch.9 (p.198-199, 207-211)
1.
implicit and explicit costs
2.
economic profit
3.
market types
VII. Cost and Perfectly Competitive Supply: The Short Run, Text, Ch. 10
1.
Laws of Production - short run and long run
2.
the short run
i)
variable and fixed costs
ii) diminishing returns
iii) short run cost curves - total cost, average cost, marginal cost
October 26 - In-Class Test #2 - Chapters 7, 8, 9 (p.198-199, 207-211), Ch 10 (p.220-227)
3.
Long run average cost curves
i)
economies of scale
ii) diseconomies of scale
Page 3
VIII. Perfect Competition and Economic Efficiency, Text, Ch. 11, 5
1.
assumption
2.
profit maximizing output
3.
shut down point
4.
entry and exit
5.
the achievement of efficiency - Ch. 5
IX. Monopoly, Text, Ch. 12
1.
characteristics
2.
natural monopoly
3.
theory of monopoly
4.
price discrimination
5.
allocative inefficiency
November 16 - In-Class Test #3 - Chapters 10, 11, 12
X.
Markets Between Monopoly and Perfect Competition, Text, Ch. 13
1.
monopolistic competition
2.
oligopoly, collusion and the kinked demand curve
XI.
Optional Topics, Text, Ch. 15, 17, 18
1.
Externalities
2.
Factor markets
3.
Economic Inequality
Note on avoidance of academic offences: All students registered in the courses of the Faculty of Arts are expected
to know what constitutes academic integrity, to avoid committing academic offences, and to take responsibility for
their actions. When the commission of an offence is established, disciplinary penalties will be imposed in accord
with Policy #71 (Student Academic Discipline). For information on categories of offences and types of penalties,
students are directed to consult the summary of Policy #71 (Student Academic Discipline) which is supplied in the
Undergraduate Calendar (section 1; on the Web at
http://www.adm.uwaterloo.ca/infosec/Policies/policyhttp://www.adm.uwaterloo.ca/infosec/Policies/policy71.htm).
If you need help in learning what constitutes an academic offence; how to avoid offences such as plagiarism,
cheating, and double submission, how to follow appropriate rules with respect to “group work” and collaboration; or
if you need clarification of aspects of the discipline policy, ask your TA and/or your course instructor for guidance.
Other resources regarding the discipline policy are your academic advisor and the Undergraduate Associate Dean.
Also, “Students who believe that they have been wrongfully or unjustly penalized have the right to grieve; refer to
Policy #70, Student Grievance, http://www.adm.uwaterloo.ca/infosec/Policies/policy70.htm”
Note for students with disabilities: The Office for Persons with Disabilities (OPD), located in NH1132,
collaborates with all academic departments to arrange appropriate accommodations for students with disabilities
without compromising the academic integrity of the curriculum. If you require academic accommodations to lessen
the impact of your disability, please register with the OPD at the beginning of each academic term.
The final exam period for Fall Term 2007 is December 6 to December 20. Students are expected to be available
during this time. Travel plans are not acceptable grounds for granting an alternative final examination time. (See
http://www.registrar.uwaterloo.ca/exams/finalexams.html)