Principles of Microeconomics
Instructor:
Phone:
Email:
Daniel J. D'Amico
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:
College Mathematics (Math A115 or Math T122)
Catalog Description:
This course is an introduction to economic analysis: efficiency and
equity; production and exchange; costs, supply, and demand; markets,
organizations, and government; competition, cooperation, and coercion;
and international trade.
Course Goals and Objectives:
This course will introduce students to the economic way of thinking. Simply put the economic way of thinking is
a way to see and understand the social world through the lens of economics.
The world is a complicated but fascinating place. Social scientists recognize that people - human beings are the source of much of this complication and fascination. Humans are strange folk who perform a wide
range of strange behaviors. Why do people do what they do?
The social world is often too complicated and intense to understand without some digestible framework or
some meaningful theory to make sense of it all. Economics is like a set of eyeglasses. Without these
eyeglasses the world is a big old mess. With the right pair of eyeglasses the viewer can make sense out of
the blurry mess. Economics is a theoretical framework that can bring clarity to the otherwise confusing
social world.
Economics is not the only set of eyeglasses that students will or should ever need. Students should be
intellectually promiscuous while at university. They should constantly try on new and challenging sets of
eyeglasses, they should experiment with new and different intellectual frameworks. They should see how
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they fit for them. They should take useful pieces from some and toss others aside. They should constantly
strive to construct and improve upon a set of eyeglasses for which to make sense out of the world. This
class hopes to provide students with a basic set of eyeglasses constructed out of the fundamental principles
of economics. Obviously, this being a principles class, this is not the most advanced set of theoretical tools
that economics has to offer. But, I would be willing to argue that the explanatory power and sense of
clarity gained from even these most basic of theoretical principles will at first seem profound. Secondly,
economics is a consistent discipline. Which is to say that economics eyeglasses may get fancier but they will
never jettison nor refute the basic core concepts that you will learn in this class. The principles of
economics that we will be covering in this class include but are limited to opportunity costs, marginalism,
mutually beneficial exchange, comparative advantage and a working understanding of supply and demand.
Warning, the economic way of thinking may come with adverse side effects. This brief statement is now an
official disclaimer, and I as the professor of this class take no liability or responsibility if any or all of the
students enrolled in this class experience some or all of the following effects as its direct result.
Understanding basic economic principles has the power to shape and or reshape an individuals' entire
world view. Trying on the economic way of thinking will cause you to think critically, it often requires work
and careful study. Second, the first visions of a world seen through the economic way of thinking can be
invigorating and inspiring but can also be shocking or uncomfortable. Trying on the economic way of
thinking will cause you to think critically about many of your previously held beliefs. Lastly, students are
often unsatisfied with mere principled understandings and desire a more elaborate set of eyeglasses. Many
principles students wind up as life long learners constantly seeking a deeper knowledge of the social world.
The economic way of thinking can be addictive.
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 Assignment:
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
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coordination and cooperation.
The book review will be 1/4 of your grade – equal in weight to either of the two examinations.
Beito, David, Peter Gordon and Alexander Tabarrok (2002). The Voluntary City: Choice, Community, and Civil
Society. Oakland: Independent Institute.
Caplan, Bryan (2008). The Myth of the Rational Voter: Why Choose Bad Policies. Princeton: Princeton University
Press.
Caplan, Bryan (2011). Selfish Reasons to Have More Kids: Why Being a Great Parent is Less Work and More Fun
Than You Think. New York: Basic Books.
Cowen, Tyler (2000). In Praise of Commercial Culture. Cambridge: Harvard University Press.
Cowen, Tyler (2007). Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and
Motivate Your Dentist. London: Plume.
Coyne, Chris (2007). After War: The Political Economy of Exporting Democracy. Stanford: Stanford University
Press.
Friedman, David (1973). Machinery of Freedom: Guide to a Radical Capitalism. New York: Open Court.
Friedman, David (1996). Hidden Order: The Economics of Everyday Life. New York: Harper Business.
Friedman, Milton (1962). Capitalism and Freedom. Chicago: University of Chicago Press.
Friedman, Milton and Rose Friedman (1979). Free to Choose: A Personal Statement. New York: Harvard
Books.
Hartford, Tim (2005). The Undercover Economist. New York: Random House
Landsburg, Steven (1993) The Armchair Economist: Economics & Everyday Life. New York: The Free Press.
Landsburg, Steven (1997). Fair Play: What Your Child Can Teach You About Economics, Values and the Meaning
of Life. New York: Free Press.
Leeson, Peter (2011). The Invisible Hook: The Hidden Economics of Pirates. Princeton: Princeton University
Press.
Lessig, Lawrence (2008). Remix: Making Art and Commerce Thrive in the Hybrid Economy. New York: Penguin
Press.
McCloskey, Dierdre (2006). The Bourgeois Virtues: Ethics for an Age of Commerce. Chicago: University of
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Chicago Press.
Rand, Ayn (1957). Atlas Shrugged. New York: Penguin Books.
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.
Your book review paper is due upon entry to the final examination on December 14. You will not be
permitted to take the final exam without turning in a HARD COPY of your book review assignment.
Examinations:
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There will be one midterm examination on Friday October 19 worth 1/4 of your final grade. We will have
a full day of review in class the Wednesday (October 17) before the midterm.
There will also be one cumulative final examination (as scheduled by the university for December 14, 2012
at 9:00am - 11:00am). The final will be worth 1/4 of your final grade.
Class Participation:
This portion of your grade will be assessed unlike any coursework you have ever experienced before. More
will be revealed during lectures the first week of class. Total class participation will be worth 1/4 of your
final grade.
Grading:
Midterm and final 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 Assignment:
Midterm Exam:
Class Participation
Final Exam:
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: Introductory Remarks
(1) Course Syllabus
Wednesday: What is Microeconomics? Price Theory
(2) Read, L. (1958). I, Pencil: My Family Tree as Told to Leonard E. Read. Irvington-‐ on-‐Hudson: Foundation
for Economic Education.
(3) Klein, D. (2006). "Rinkonomics: A Window on Spontaneous Order," Library of Economics and Liberty:
Featured Article May 1.
(4) Munger, M. (2005). "Everybody Loves Mikey," Library of Economics and Liberty: Featured Article August.
Friday: What do prices do?
(5) Hayek, F. (1945). “The Use of Knowledge in Society,” American Economic Review. 35(4): 519 -‐ 30.
Week 2: Rationality, Purposeful Human Action and Incentives
Monday: Labor Day No Class
Wednesday: Rational Choice: Why did Mookie Throw the Trash Can?
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(1) Mises, L. (1949). Human Action: A Treatise on Economics. San Francisco: Fox and Wilkes. Chapter 1:
Acting Man: pp. 11 -‐ 29.
(2) 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: Subjectivism, That's how I roll!
(3) Stigler, G. and Becker, G, (1977). "De Gustibus Non Est Disputandum," The American Economic Review.
67(2): pp. 76 -‐ 90.
Week 3: Demand
Monday: Diminishing Marginal Value: How Much is too Much?
(1) Menger, C. (1871). "Chapter 3: The Theory of Value," in Principles of Economics. Auburn, AL: The
Ludwig von Mises Institute. pp. 114 -‐ 74.
Wednesday: The Diamond Water Paradox
(2) Bohm-‐Bawerk, E. (1891). "Book III, Chapter IV: The Marginal Utility," in The Positive Theory of Capital.
London and Macmillan and Co.
Friday: Guest Lecture, Jayme Lemke
(3) Lemke, J. and Coyne, C. (2011). "Polycentricity in Disaster Relief," Studies in Emergent Order. 4: 40 -‐ 57.
Week 4: Supply, Exchange and Equilibrium
Monday: Incentives
(1) Bastiat, F. (2007). "Chapter I: That Which Is Seen, and That Which Is Not Seen" in The Bastiat Collection.
Auburn: The Ludwig von Mises Institute: pp. 1 -‐ 48.
(2) Alchian, A. and Allen, W. (1964). "The Fundamental Laws of Demand," in University Economics.
Belmont: Wadsworth: pp. 64 -‐ 79.
Wednesday: Production
(3) Rothbard, M. (1962). "Chapter 5: Production," in Man, Economy and State. Auburn: The Ludwig von
Mises Institute. pp. 319 ‐ 66.
Friday: Film
Free to Choose ‐ Power of the Market
Week 5: Economists have nice curves.
Monday: Demand shifts v. Changes in Quantity Demanded
(1) Mankiw, G. (2011). "Chapter 4: The Market Forces of Supply and Demand," in Principles of
Microeconomics: Sixth Edition. Cengage Learning. pp. 65 -‐ 88.
Wednesday: Supply Shifts, Substitutes Complements. Peanut butter Jelly Time!
(2) Simon, J. (1998). "Chapters 3 and 4: Can the Supply of Natural Resources -‐ Especially Energy -‐ Really
Be Infinite? Yes! and The Grand Theory" in The Ultimate Resource II: People Materials, and Environment.
Princeton: Princeton University Press.
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Friday: Film
Free to Choose - Who Protects the Consumer?
Week 6: Elasticity, Consumer and Producer Surplus Monday: Elasticity of Demand
(1). Mankiw, G. (2011). "Chapter 5: Elasticity and Its Application.," in Principles of Microeconomics, Sixth
Edition. Cengage Learning. pp. 89-‐110.
Wednesday: Elasticity of Supply
(2) Smith, A. (1776). "Book I, Chapter V: Of the Real and Nominal Price of Commodities, or of their Price
in Labour and their Price in Money," in An Inquiry into the Nature and Causes of the Wealth of Nations.
Indianapolis: Liberty Fund.
Friday: Arbitrage and the Law of One Price
(3) Smith, A. (1776). "Book I, Chapter 1 and 2: Of the Division of Labor and Of the Principle which gives
Occasion to the Division of Labour," in An Inquiry into the Nature and Causes of the Wealth of Nations.
Indianapolis: Liberty Fund.
Week 7: Price Controls and Prohibition.
Monday: Price Floors
(1) Card, D. and Krueger, A. (1994). "Minimum Wages and Employment: A Case Study of the Fast-‐Food
Industry in New Jersey and Pennsylvania," American Economic Review, 84(4): pp. 774 -‐ 775.
(2) Hazlitt, H. (1952). " Minimum Wage Laws," in Economics in One Lesson. Irvington-‐on-‐Hudson:
Foundation for Economics Education: pp. 118 -‐ 123.
Wednesday: Price Ceilings
(3) Friedman, M. and Stigler, G. (1946). "Roofs or Ceilings? The Current Housing Problem," Popular
Essays on Current Problems. Irvingon-‐on-‐Hudson: Foundation for Economic Education.
Friday: Guest Lecture -‐ Nicholas Snow.
(4) Snow, N., Smith, D. and Leeson, P. (2012). "Hooligans," Revue d'Economie Politique. 122(2): 213 -‐ 231.
Week 8: Midterm Review and Midterm Exam Monday: Fall Break No Class
Wednesday: Midterm Review Friday: Midterm Exam
Week 9: The Dynamics of Intervention
Monday: Externalities
(1) Coase, R. (1960). “The Problem of Social Cost,” Journal of Law and Economics. 3(1): 1 -‐ 44.
Wednesday: Taxes
(2) Pigou, A.C. (1932). "II, Chapter IX: Divergences Between Marginal Social Net Product and Marginal
Private Net Product," in the Economics of Welfare.
Friday: Subsidies and Elasticity
(3) Norton, R. (1985). “Unintended Consequences,” Concise Encyclopedia of Economics. Indianapolis:
Liberty Fund.
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Week 10: Applications
Monday: Incentives and Sex
(1) Landsburg, S. "Introduction," More Sex is Safer Sex.
(2) Hartford, T. (2008). "Chapter 1," The Logic of Life. Random House. pp. 3 -‐ 31.
Wednesday: Fertility and Development
(3) Becker, G. and Lewis, G. (1973). "On the Interaction between the Quantity and Quality of Children,"
The Journal of Political Economy. 71(2): pp. S279 -‐ 88.
Friday: Guest Lecture - Bryan Caplan
(4) Leonhardt, D. (2011). "The Case for Having More Kids," Economix Blog at NYT. April 7.
Week 11: Planning Reform Monday: Film
Commanding Heights: Part I
Wednesday: Foreign Aid
(1) Easterly, W. (2009). "Can the West Save Africa?" Journal of Economic Literature. 47(2): 373 -‐ 44.
Friday: Film
Commanding Heights: Part II
Week 12: Free Trade
Monday: Comparative Advantage and International Trade
(1) Ricardo, D. (1817). "Chapter 7 on Foreign Trade" in Principles of Political Economy and Taxation.
Wednesday: Sweatshops
(2) Powell, B. (forthcoming). "The Ethical and Economic Case Against Sweatshop Labor: A Critical
Assessment," Journal of Business Ethics.
Friday: Film
Commanding Heights -‐ Part III
Week 13: Environmentalism
Monday: The Tragedy of the Commons
(1) Hardin, G. (1968). "The Tragedy of the Commons," Science. 13(162): 1243 -‐ 8.
(2) Coase, R. (1974). "The Lighthouse in Economics," Journal of Law and Economics. 17(2): 357 -‐ 76.
Wednesday: Thanksgiving Holiday
Friday: Thanksgiving Holiday
Week 14: Moving Forward
Monday: Intellectual Property
(1) Lessig, L. (2008) "Chapters 1 and 2: Cultures of our Past, Cultures of our Future," in REMIX.
Bloomsbury. pp. 23 -‐ 35.
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Wednesday: Voting and Democracy
(2) Caplan, B. (2007). "The 4 Boneheaded Biases of Stupid Voters," Reason Magazine. Oct.
Friday: The Prisoner's Dilemma
(3) Axelrod, R. (1980). "Introduction and Chapter I: The Problem of Cooperation," in The Evolution of
Cooperation. pp. 1 -‐ 24.
Week 15: Some Closing Thoughts
Monday: Social Order
(1). Leeson, P. (2009). "The Laws of Lawlessness," Journal of Legal Studies. 38(2): 471-‐503.
Wednesday: Final Review
Friday: Final Review
Final Exam:
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