Intermediate Microeconomics
Instructor:
Office Phone:
Email:
Daniel J. D'Amico, Ph.D.
561-870-5941
danieljdamico@gmail.com
Office Hours:
This semester I am teaching Mondays, Wednesdays and Fridays. My formal
office hours will be from 9am – 11am on those days. But in general I tend to
be in my office, or on campus, throughout the week with the exception of
lunchtime, economics club meetings (occasional Thursdays during the
window) or administrative meetings.
If you find me, and need to ask a question, feel free to grab me when you
can, but the best and most reliable means is to come to the office during
those morning hours and or schedule an explicit appointment via the email
above.
I hope that you come by to introduce yourself, ask questions about class,
discuss economics and current events, or just plain say hello. My door is
always open and I honestly enjoy the company and conversation.
Course Prerequisites:
Prerequisite course required w/ minimum grade of C for ECON-B201or
Prerequisite course required MATH-A116
--- and MATH-A257
--- and MATH-C116
or Prerequisite course required w/ minimum grade of C for ECON-B200
Catalog Description:
This course is an analysis of market and firm coordination; the theory of
consumer behavior and demand; the theory of supply; competition; the
pricing of goods and resources; and government policies.
Course Goals and Objectives:
This course is meant to transform the beginning economics student into his more advanced self. Before
this class the student should have already been introduced to the basic principles of economics or “the
economic way of thinking,” as I like to call it. The concepts with which an enrolled student should have a
working familiarity before the beginning of this course include, but are not limited to, opportunity costs,
marginalism, mutually beneficial exchange, comparative advantage, the analytics of supply and demand.
This class will take these concepts to the next level. The student will learn a fuller accounting of
opportunity costs, the calculative implications of marginalism, some fuller implications of mutually
beneficial exchange, the broader applicability of comparative advantage and a more precisely honed ability
to work the supply and demand framework. In other words, much of the science of economics is
concerned with explaining phenomena of exchange within the social world. Basic examples of trade and
market behavior are more easily understandable to the beginner economist, but more complex examples of
market behavior, individual choice, and social interaction, require some more precisely honed analytical
tools. This course attempts to give the motivated student such a tool kit. Once in hand, the advanced
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economics student often times cannot help but see economics everywhere and in everything.
Readings:
In addition to this course syllabus, each student will receive a reading schedule on the first day of class. All
reading assignments should be done prior to the class meeting. And all reading materials have been made
freely available in PDF format within the “course materials” section on the blackboard site for this class.
Writing Assignments:
Teaching and learning are both complicated processes. I as the teacher take a body of material, digest it, rephrase it, and try to communicate it to you. You in turn, are presented this material, attempt to digest it, rephrase it and re-present it back to me hoping that I understand how well you understood the material. In
other words, there is a lot of room for noise to cloud the signal. My philosophy on the matter is simple,
writing is thinking. The best way that I can gauge that you understand the material from this class is to read
something that you have written that makes sense.
You will be expected to write a review essay on a book directly related to the material in this class. Below
you will find a list of recommended books for this assignment.
This is not a book report! This is a book review. What is the difference? This paper should be 5-8 pages
double spaced, 12pt. Times New Roman (citations when needed). It should possess an original thesis, of
your own that addresses the general theme of this course – the power of prices. In other words, your essay
should be motivated to answer the following question: given the book that you selected and the general
theories discussed in this class, what are the implications (social, political, ethical, cultural etc.) of taking
seriously the argument that the market pricing mechanism has certain potentials to promote social
coordination and cooperation.
The book review will be 1/4 of your grade – equal in weight to either of the two examinations.
Anderson, Terry and P. J. Hill (2004). The Not so Wild Wild West: Property Rights on the Frontier. Stanford
Unviersity Press.
Boettke, Peter (2012). Living Economics: Yesterday, Today and Tomorrow. Oakland: Independent Institute.
Coyne, Christopher (2008). After War: The Political Economy of Exporting Democracy. Stanford University Press.
Gambetta, Diego (2009). Codes of the Underworld: How Criminals Communicate. Princeton: Princeton University
Press.
Gibbons, Robert (1992). Game Theory for Applied Economists. Princeton: Princeton University Press.
Kaminski, Marek (2004). The Games Prisoners Play: The Tragicominc Worlds of Polish Prison. Princeton: Princeton
University Press.
North, Douglass (1990). Institutions, Institutional Change and Economic Performace. Cambridge University Press.
Seabright, Paul (2005). The Company of Strangers: A Natural History of Economic Life. Princeton University
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Press.
Venkatesh, Sudhir (2008). Off the Books: The Underground Economy of the Urban Poor. Harvard University Press.
I am not a stickler for any particular citation style. My motto is “writers write, and editors edit.” But be sure
to leave a consistent trail of citations that demonstrate you did not plagiarize and that a subsequent
researcher could easily track down your sources if she was so curious. For style and grammar assistance, I
recomend students visit the university's Writing Across the Curriculum laboratory.
For research assistance students should seriously consider making an appointment with a University
librarian once they have selected their book and formulated a thesis statement.
You are welcome to email me and or set up an appointment to discuss your potential research topic and
ask for guidance towards research source materials.
Writing is hard and requires revision. My commitment to you is that I am willing to pre-read any rough
draft that you compose throughout the semester. I will give annotated comments and explain what grade
you would likely receive on the paper if it were to be turned in as a final draft as is. I will further give you
specific advice and recommendations as to what would bring the paper closer towards an A grade. There is
no limit as to how often, how frequently or how early this process can be repeated.
In theory if you wanted to write a full research paper in the first week of class and turn it in, and I deemed
it worthy of an A, then you would be done with that assignment for the rest of the semester. Also, in
theory if you turned in a paper that first week but it was incredibly off base, you could essentially turn in
revisions everyday thereafter and get feedback until you assured yourself the grade you desire. Very few
students exploit this opportunity early in the semester and I tend to get an onslaught of rough drafts turned
in about a week before the paper is due at the end of the semester. I do not have a firm policy on when
research papers cannot be submitted for feedback. If it is close to the deadline and I have the time, I'm
happy to give feedback, but as the final deadline approaches there are no promises that I will be able to get
to your paper. In other words act sooner rather than later. Lastly, it is important to note that the more
effort you initially put into a paper, the more focused and effective my feedback can be. If you turn in a
general outline and a loose idea, I can make some general comments. If you fully write out a ten page draft
I can tell you what types of evidence you should be looking at and which particular paragraphs you need to
include or cut.
I grade research assignments on the basis of what I judge to be their publication potential down the road,
as if I were an editor at an academic journal or the organizer of a panel at an academic conference. An A
signifies that I think you have sketched a line of thought with sufficient clarity and cogency that I would
invite you to submit the manuscript for presentation or publication. A B indicates that while you have not
convinced me that the manuscript warrants publication as it is, you have nonetheless convinced me that
you have a reasonable grasp of your subject matter. A C means that I don't come away with a clear idea of
what you are trying to accomplish, and might even think you are blundering around a bit. Ds and Fs are
possible grades but typically mean that you have not met the requirements of the assignment.
Examinations:
There will be one midterm examination and one cumulative final examination. The midterm and final will
each be worth 1/4 of your final grade. As indicated on the course reading schedule the midterm
examination is scheduled for October 26. We will devote two full days of class time to review before the
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midterm.
According to the university calendar the final examination is scheduled for 9:00am – 11:00am on
December 12, 2012 (This is when your book review assignment will also be due. YOU WILL NOT BE
PERMITTED TO TAKE THE FINAL EXAMINATION WITHOUT TURNING IN A HARD COPY
OF YOUR BOOK REVIEW ASSIGNMENT!)
Class Participation:
Grading:
Exam grades will be awarded according to the following grading scale:
90 – 100
85 – 89
80 – 84
75 – 79
70 – 74
65 – 69
60 – 64
0 – 59
A
B+
B
C+
C
D+
D
F
As I have outlined the assignments, the breakdown of your total grade will be as follows:
Writing Assignments:
Midterm Exam:
Final Exam:
Class Participation
1/4
1/4
1/4
1/4
Academic Integrity Statement:
The following passage is reprinted as it appears in the University Bulletin 2008 – 2009:
All academic work will be done by the student to whom it is assigned without
unauthorized data or help of any kind. A student who supplies another with
such data or help is considered deserving of the same sanctions as the
recipient. Specifically, cheating, plagiarism, and misrepresentation are
prohibited. Plagiarism is defined by Alexander Lindley as “the false
assumption of authorship: the wrongful act of taking the product of another
person’s mind, and presenting it as one’s own” (Plagiarism and Originality).
“Plagiarism may take the form of repeating another’s sentences as your own,
adopting a particularly apt phrase as your own, paraphrasing someone else’s
argument as your own, or even presenting someone else’s line of thinking in
the development of a thesis as though it were your own.” (MLA Handbook,
1985).A student who is found to have cheated on any examination may be
given a failing grade in the course. In case of a second violation, the student
may be excluded for one or two terms or dismissed from the university.
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A student who engages in cheating, plagiarism, or misrepresentation on term
papers, seminar papers, quizzes, laboratory reports, and such may receive a
sanction of a failing grade in the course. A second offense may be cause for
exclusion or dismissal from the university. Faculty members are required to
report immediately to the dean of the student’s college any case of cheating,
plagiarism, or misrepresentation which he or she has encountered and, later,
the manner in which it was resolved.
The dean of the student’s college should apprise the student of the serious
consequences of cheating, plagiarism, and misrepresentation as well as of the
appeals procedure open to the student in such cases.
Disability Statement:
A student with a disability that qualifies for accommodations should contact Sarah Mead Smith, Director
of Disability Services at 865-2990 (Academic Resources Center, Room 405, Monroe Hall). A student
wishing to receive test accommodations (e.g. extended test time) should provide the instructor with an
official Accommodation Form from Disability Services in advance of the scheduled test date.
Such accommodations are the sole responsibility of the student. All examinations will be sent to the
Academic Resource Center by default, alls you need to do is contact them with your situation and schedule
a time and routine to take the examination.
Course Schedule and Reading List:
Week 1: Course Introduction
Monday: Introduction
(1) Course Syllabus
Wednesday: Positive Science I.
(2) Friedman, M. (1953). "PART I: The Methodology of Positive Economics," in Essays in Positive Economics.
Chicago: University of Chicago Press. pp. 3 -‐ 46.
Friday: Positive Science II.
(3) Kirzner, I. (1976). "Chapter 7: Economics as a Science of Human Action," in The Economic Point of View.
Indianapolis. Liberty Fund. pp. 131 -‐ 159.
Week 2: Rationality
Monday: Labor Day No Class
Wednesday: Rational Choice I.
(1) Elster, J. (2007). "Chapter 11 -‐12: Rational Choice and Rationality and Behavior," in Explaining Social
Behavior: More Nuts and Bolts for the Social Sciences. Cambridge: Cambridge University Press. pp. 191-‐231.
Friday: Rational Choice II.
(2) Becker, G. (1962). "Irrational Behavior and Economic Theory," Journal of Political Economy. 70(1): 1-‐13.
(3) Kirzner, I. (1962). "Rational Action and Economic Theory," Journal of Political Economy. 70(4): 380-‐85.
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(4) Becker, G. (1963). "Rational Action and Economic Theory: A Reply to Kirzner," Journal of Political
Economy. 71(1): 82-‐3.
(5) Kirzner, I. (1963). "Rational Action and Economic Theory: Rejoinder," Journal of Political Economy. 71(1):
84-‐85.
Week 3: Case Studies in Rational Choice
Monday: Addiction
(1) Becker, G. and Murphy, L. (1988). "A Theory of Rational Addiction," Journal of Political Economy. 96(4):
675 -‐ 700.
Wednesday: Religion
(2) Iannaccone, L. (1998). "Introduction to the Economics of Religion," Journal of Economic Literature. 36(3):
1465-‐96.
Friday: Superstition
(3) Leeson, P. (2012). "An Austrian Approach to Law and Economics, with Special Reference to
Superstition," Review of Austrian Economics. 25(3): 185-‐98.
Week 4: More Case Studies in Rational Choice Monday: Marriage
(1) Becker, G. (1973). "A Theory of Marriage: Part I," Journal of Political Economy. 81(4): 813 -‐ 46.
(2). Becker, G. (1974). "A Theory of Marriage: Part II," Journal of Political Economy. 82(2): S11 -‐ S26.
Wednesday: Crime and Punishment
(3) Becker, G. (1968). "Crime and Punishment: An Economic Approach," Journal of Political Economy. 76(2):
169 -‐ 217.
(4) Benson, B. (1992). "The Development of Criminal Law and Its Enforcement: Public Interest or
Political Transfers?" Journal des Economistes et des Etudes Humaines. 3(1): 79-‐108.
Friday: YouTube lecture, "Utilitarianism and Liberty, John Stuart Mill" YALE COURSE
Week 5: Rationality and Review
Monday: One more case study in rational choice: Politics
(1) Tullock, G. (1967). " The Welfare Costs of Tariffs, Monopolies and Theft," Western Economic Journal.
5(3): 224 -‐ 232.
(2) Krueger, A. (1974). "The Political Economy of the Rent-‐Seeking Society," American Economic Review. 64:
291 -‐ 303.
Wednesday: Review of Diminishing Marginal Value:
(3) Friedman, D. (1986). "Chapter 4, The Consumer: Marginal Value, Marginal Utility and Consumer
Surplus," in Price Theory: An Intermediate Text. South-‐Western Publishing.
Friday: Review of Arbitrage and the law of one price
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(4) Friedman, D. (1986). "Chapter 7: Markets and Putting it All Together," in Price Theory: An Intermediate
Text. South-‐Western Publishing.
Week 6: Price Theory Review
Monday: Review of the Dynamics of Interventionism
(1) Friedman, D. (1986). "Chapter 17: Market Interference," in Price Theory: An Intermediate Text. South-‐Western Publishing.
Wednesday: The Theory of the Consumer: Indifference
(2) Hicks, J. (1939). "The Foundations of Welfare Economics," Economic Journal. 49(196): 696 -‐ 712.
(3) Kaldor, N. (1939). "Welfare Propositions in Economics and Interpersonal Comparisons of Utility,"
Economic Journal. 49(195): 549-‐552.
(4) Pareto, V. (1897 [2007]). Considerations on the Fundamental Principles of Pure Political Economy. London:
Routledge. pp. 51-‐74.
Friday: Indifference II: Subjective Preferences
(5) Friedman, D. (1986). "Chapter 3: The Consumer: Choice and Indifference Curves," in Price Theory: An
Intermediate Text. South-‐Western Publishing.
Week 7: Shifting the Curves
Monday: Change in Income v. Constant Price Changes
(1) Veblen, T. (1899). "Chapter 3: Conspicuous Leisure," in The Theory of the Leisure Class. Penn State
University. pp. 25-‐47.
Wednesday: Gifts in Cash v. Gifts in Kind
(2) Waldfogel, J. (1993). "The Deadweight Loss of Christmas," American Economic Review. 83(5): 1328 -‐
1336.
Friday: Relative Price Changes: The Third Law of Demand
(3) Alchian, A. and Allen, W. (1972). "The Fundamental Laws of Demand," in University Economics.
Wadsworth Publishing. pp. 64-‐79.
Week 8: Income v. Substitution Effects
Monday: Fall Break No Class
Wednesday: Slutsky Hicks Effects I
(1) McCloskey, D. (1985). "Chapter 4: Indifference Curves and Demand," in The Applied Theory of Price.
New York: Macmillan Publishing. pp. 71 -‐ 82.
Friday: Slutsky Hicks Effects II
(2) Alchian, A. and Allen, W. (1983). "Chapter 2 Consumer Demand," in Exchange and Production. Los
Angeles: Wadsworth Publishing. pp. 13 -‐ 44.
Week 9: Midterm Review and Midterm Exam
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Monday: Midterm Review
Wednesday: Midterm Review Friday: Midterm Exam
Week 10: Externalities
Monday: The Coase Theorem
(1) Coase, R. (1960). "The Problem of Social Cost," Journal of Law & Economics. 3: 1-‐ 44.
Wednesday: Positive Externalities
(2) Olson, M. (1965). in The Logic of Collective Action: Public Good and the Theory of Groups. Cambridge: Harvard
University Press. pp. 1-‐15.
Friday: Negative Externalities
(3) Pigou, A. (1920). "Part II: Chapters I, II, III," in Economics of Welfare. Macmillan and Co. pp. 75 -‐ 83.
Week 11: The Theory of the Firm
Monday: Film clips from Tucker's best of entrepreneurship I
Wednesday: The Puzzle of Firms
(1) Coase, R. (1937). "The Nature of the Firm," Economica. 4(16): 386-‐405.
(2) Sautet, F. (2000). An Entrepreneurial Theory of the Firm. London: Routledge. pp.
85-‐135.
(3) Koch, C. (2007). "Chapters 5, 6 and 7," in The Science of Success: How Market- Based Management Built the
World's Largest Private Company. John Wiley & Sons. pp. 97-‐156.
Friday: Film clips from Tucker's best of entrepreneurship II
Week 12: Public Goods Theory
Monday: Tragedy of the Commons
(1) Hardin, Garrett (1968). "Tragedy of the Commons," Science. 162: 1243-‐1248.
Wednesday: Privatization and Property Rights
(2) Coase, R. (1974). "The Lighthouse in Economics," Journal of Law and Economics. 17(2): 357-‐376.
Friday: Film - The Lorax
Week 13: Solving Commons Problems
Monday: Bloomington School
(1) Ostrom, E. (1990). "Chapter 1: Reflections on the Commons," in Governing the Commons. Cambridge:
University of Cambridge Press. pp. 1 -‐ 28.
Wednesday: Thanksgiving Holiday No Class Friday: Thanksgiving Holiday No Class
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Week 14: Behavioral Economics
Monday: Biases
(1) Rabin, M. (1998). "Psychology and Economics," Journal of Economic Literature. 36: 11-‐46.
Wednesday: Biases in Voting
(2) Caplan, B. (2000). "Rational Irrationality: A Framework for the Neoclassical-‐ Behavioral Debate,"
Eastern Economic Journal. 26(2): 191-‐211.
Friday: Paternalism
(3) Whitman, G. and Rizzo, M. (2007). "Paternalist Slopes," NYU Journal of Law & Liberty. 2: 411 -‐ 443.
Week 15: Game Theory and Review
Monday: Game Theory
(1) Dixit, A. and Skeath, S. (1999). Games of Strategy. New York: W. W. Norton & Company. pp. 1-‐82.
Wednesday: Final Exam Review
Friday: Final Exam Review
Final Exam:
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