Villanova University
School of Business
Introduction to Microeconomics
ECO-1001-008 and ECO-101-010
Fall 2007
Mary Kelly, Ph.D.
Class Meeting:
ECO-1001-008: MWF from 10:30 a.m. until 11:20 a.m. in Bartley 3001
ECO-1001-010: MWF from 11:30 a.m. until 12:20 p.m. in Bartley 3001
How to contact me:
Office: Bartley 3067
Office phone: 9-6445
Office Hours: MWF (9:00AM to 10:30AM), Tuesdays (Noon until 2PM), or by
appointment
Email: mary.kelly@villanova.edu
Course Description:
This course is an introduction to the study of how microeconomic forces and policies
affect consumer choices and firm behavior. Topics addressed include the price system,
demand and supply analysis, consumer behavior and utility maximization, the production
process, and analysis of market structures.
Course Objective:
At the conclusion of this course, students should be able to evaluate, discuss, and apply
microeconomic principles.
Method:
Required
Textbook:
Other
Materials:
Lecture and Discussion
PowerPoint slides are available on WebCT Vista – “Learning Modules”
Microeconomics by Campbell R. McConnell and Stanley L. Brue, 17th
edition (bundled with Aplia software). Text is available in the bookstore
or at www.aplia.com.
Aplia software for practice and graded assignments (www.aplia.com)
Articles and case studies relevant to chapter discussions (most available on
WebCT Vista)
The Wall Street Journal is available for free throughout Bartley Hall. All
other material will be distributed in class or made available on WebCT
Vista.
Requirements:
Exam I
Exam II
Exam III
Assignments
Aplia Problem Sets
Worksheet/Case Study
Analyses
Group Project
Grading:
Points
40
40
40
Chapters
1-4, 6, 7
8-11
13, 14, 16, 18, 20
And presentation topics
20
30
30
Total
200
100-94 (188+ points)
90-93 (180-186 points)
87-89 (174-178 points)
84-86 (168-172 points)
80-83 (160-166 points)
77-79 (154-158 points)
A
AB+
B
BC+
74-76 (148-152 points)
70-73 (140-146 points )
67-69 (134-138 points)
64-66 (128-132 points)
60-63 (120-126 points)
Below 60 (120- points)
C
CD+
D
DF
Grading is determined based on the above criteria. There is no extra credit offered in this
course. Rounding up or down will be based on attendance and class participation.
Exams:
Exams must be taken on the scheduled dates. Make-up exams will be offered only for
extenuating circumstances and must be taken within two days of the scheduled exam
date. If a student does not take exam I or exam II, the weight on the third exam will
increase to 80 points and will include material from the missed exam.
Assignments:
Worksheet/Case Study Analysis:
During the semester, students will be required to complete eight worksheets which will
involve an analysis of a case study, external readings associated with particular chapters,
or web-based questions from the text. Students can choose to work on these assignments
individually or in groups (hand in one assignment per group, max of 4 students/group).
Some of the assignments will be take-home; others will be completed in class.
Aplia Problem Sets:
During the semester, students will be required to complete problems accessed through
Aplia to demonstrate their understanding of the chapter material. Due dates for the
assignments will be announced in class and will be posted on Aplia. Once the due date
passes, the answers are made available to students. Because of this, deadlines cannot be
extended on an individual student basis.
Group Project
Listed below are microeconomic topics.
1.
2.
3.
4.
5.
6.
7.
8.
Evaluation of Executive Compensation Packages (chapter 14)
Unionism in the U.S. and around the world (chapter 14)
U.S. Environmental Laws (Clean Air/Clean Water) (chapter 16)
Global Warming and the Kyoto Protocol (chapter 16)
Microsoft Antitrust Case (chapter 18)
U.S. Health Care Policies and Issues (Medicare and Medicaid) (chapter 20)
U.S. Public Pension System (Social Security) Policies and Issues (chapter 20)
Income Inequality in the U.S. and around the world (chapter 20)
In groups of five to six, students will conduct an in-depth analysis of one of these subtopics in microeconomics. Students will provide a 10 to 15 minute summary of their
findings to the class and pose a question for class discussion. The presentation/discussion
will be linked to the appropriate chapter. Each group is required to hand in the summary
and a bibliography listing information sources.
Class Participation:
Students are required to attend all lectures and actively participate in the class discussion.
You should be prepared for class. This includes reading the chapter and any
corresponding material from assigned readings prior to coming to class. Students who do
poorly in microeconomics are typically those who have not kept up with the reading.
Integrity Policy:
The Code of Academic Integrity of Villanova University addresses cheating, fabrication
of submitted work, plagiarism, handing in work completed for another course without
instructor’s approval, and other forms of dishonesty. For the first offense, a student who
violates the Code of Villanova University will receive 0 points for the assignment. The
violation will be reported by the instructor to the Dean’s Office and recorded in the
student’s file. In addition, the student will be expected to complete an educational
program. For the second offense, the student will be dismissed from the University and
the reason noted on the student’s official transcript.
Disability Statement:
It is the policy of Villanova to make reasonable academic accommodations for qualified
individuals with disabilities. If you are a person with a disability, please contact me after
class or during office hours and make arrangements to register with the Learning Support
Office by contacting 610-519-5636 or as soon as
possible. Registration is needed in order to receive accommodations.
Course Outline:
Weeks 1-3
Review of syllabus, WebCT, Aplia
Chapters 1
Limits, Alternatives, and Choices
Economics is a social science which examines how society fills economic
wants using limited resources. Chapter 1 presents how and why we study
economics, including a discussion on the economizing problem and the
production possibilities model. The appendix of chapter 1 provides a
review of graphs and their meaning.
Aplia Problem Set #1: Limits, Alternatives, and Choices II
Chapter 2
The Market System and the Circular Flow
This chapter contrasts different economic systems and specifically
addresses the characteristics of a market system. The chapter also answers
such questions as what will be produced, how it will be produced, who
will get the product, and how the market system will accommodate
change.
Chapter 3
Demand, Supply, and Market Equilibrium
In individual markets, buyers and sellers interact and determine the
equilibrium price and quantity for a product or service. Chapter 3
discusses the law of demand and supply and shows how equilibrium is
determined. The chapter concludes with an explanation of non-price
determinants which change the equilibrium price and/or quantity.
Outside reading: Stephen P.A. Brown and Richard Alm. Running on
Empty? How Economic Freedom Affects Oil Supplies. Economic Letter,
Federal Reserve Bank of Dallas, 1(4). (April 2006).
Worksheet Analysis #1: Respond to questions on the above reading (3 pts)
Aplia Problem Set #2: Demand & Supply and Market Equilibrium II
Weeks 4-5
Chapter 4
The US Economy: Private and Public Sectors
There are two major sectors within the market system; the private sector
consisting of households and businesses, and the public sector
(government). This chapter discusses each sector and uses the Circular
Flow Model to demonstrate the interplay between the sectors.
Chapter 6
Extension of Demand and Supply Analysis
This chapter explores the sensitivity of demand to own price changes,
price changes of related products, and income changes. It also shows the
differences in supply responses between the short run and long run.
Worksheet Analysis #2: An evaluation of cigarette elasticities (3 pts)
Aplia Problem Set #3: Extension of Demand and Supply Analysis II
Chapter 7
Consumer Behavior and Utility Maximization
In the Theory of Consumer Behavior, individuals want to maximize utility
when making choices given a particular budget constraint. The appendix
provides a more in-depth analysis of consumer behavior using indifference
curves.
Worksheet Analysis #3: Here is $500 – Go Spend It at Wal-Mart (WB#2,
page 137) (3 pts)
Aplia Problem Set #4: Consumer Behavior & Utility Maximization II
Exam I
Weeks 6-7
Chapters 1-4, 6, 7
Wednesday, September 26
Chapter 8
The Costs of Production
In order to produce g/s, a business needs economic resources. The firm’s
cost of production consists of payments to resource owners and the
opportunity costs of using their own resources.
Aplia Problem Set #5: The Costs of Production II
Chapter 9
Pure Competition
This chapter discusses the characteristics and profit maximization in the
short-run and long-run of a competitive market structure wherein each
firm provide only a very small portion of the total market output.
Aplia Problem Set #6: Pure Competition II
Week 8
Fall Break
Weeks 9-11
Chapter 10
Pure Monopoly
This chapter explores the characteristics and profit maximization of a pure
monopoly wherein a sole producer supplies the entire market output.
Aplia Problem Set #7: Pure Monopoly II
Chapter 11
Monopolistic Competition and Oligopoly
Most markets fall between the two extremes of pure competition and pure
monopoly. This chapter describes the two market types in the middle,
including their characteristics, profit maximization, and efficiency
outcomes.
Outside Reading: Lawrence J. White. Application of the Merger
Guidelines: The Proposed Merger of Coca Cola and Dr. Pepper (1986).
The Antitrust Bulletin. Edited by John Kwoka, Jr. and Lawrence J. White.
Oxford University Press, 2002.
http://www3.oup-usa.org/sc/0195161181/pdf/0673383776_03.pdf.
(available on WebCT Vista )
Worksheet Analysis #4: Case study of the proposed merger of Coke and
Dr. Pepper (5 pts)
Worksheet Analysis #5: Analysis of barriers to entry (baby food or
toothpaste industry) (5 pts)
Aplia Problem Set #8: Monopolistic Competition II
Exam II
Chapters 8-11
Wednesday, November 7
Weeks 12-13 Chapter 13
The Demand for Resources (labor)
This chapter explains the major factors that underlie resource (labor)
demand and the impact on pricing and employment of resources.
Aplia Problem Set #9: The Demand for Resources II (optional)
Chapter 14
Wage Determination
This chapter discusses the interaction of labor demand and supply to
determine hourly wages and salaries.
Other reading: Hans P. Johnson. Illegal Immigration. At Issue, Public
Policy Institute of California. (April 2006)
http://www.ppic.org/content/pubs/atissue/AI_406HJAI.pdf (June 7, 2006)
(available on WebCT)
Worksheet Analysis #6: Respond to questions on the above reading (3 pts)
Aplia Problem Sets #10: Wage Determination II (optional)
Group Projects: Executive Compensation, Unionism
Weeks 14-16 Economics and Ethics
Present three ethical theories (Deontology, Utilitarianism, Virtue Ethics)
and discuss their application to the study of economics.
Chapter 16
Government and Market Failure
This chapter examines market failure – a circumstance in which private
markets do not bring about the allocation of resources that best satisfies
society’s wants. The three kinds of market failures discussed are public
goods, externalities, and information asymmetries. The chapter also
discusses government’s role in correcting market failures.
Worksheet Analysis #7: The economics and ethics of drug pricing (3 pts)
Group Projects: U.S. environmental laws, Kyoto Protocol
Chapter 18
Antitrust Policy and Regulation
This chapter examines three sets of government policies toward business:
antitrust policy, industrial regulation, and social regulation. We’ll
examine the economic and ethical issues of the Microsoft antitrust case.
Group Project: Microsoft case
Chapter 20 Income Inequality and Poverty
This chapter explores the sources and trends of income inequality, and
evaluates US programs to combat poverty.
Other readings: Rev. Dr. Richard S. Gilbert. Was Robin Hood Right?
Ethics and Economic Justice in America Today. Fifth Annual Kiplinger
Lecture on Ethics in American Society, Cedar Lane Unitarian Universalist
Church, November 5, 2005.
http://www.cedarlane.org/2005lecture.pdf (June 4, 2006)
(available on WebCT)
Worksheet Analysis #8: Respond to question on the above reading (5 pts)
Group Projects: U.S. health care policies, social security, and income
inequality
Exam III
Chapters 13, 14, 16, 18, 20, and presentation topics
ECO-1001-008: Saturday 12/15 from 1:30PM to 4:00PM
ECO-1001-010: Monday 12/17 from 10:45AM to 1:15PM