Advanced Placement Economics (Micro and Macro)
Chagrin Falls High School
School Year 2013-2014
If political elites claim that we are out of the Great Recession of 2008, why doesn’t it feel like it? What is
the US government doing to curb the growing debt and national deficit crisis? Why are gas prices
climbing? How is inflation affecting overall prices in the US? Is the financial crisis in Greece, Spain and
Ireland affecting us and what caused their financial woes? Does macroeconomics and microeconomics
even matter anymore? All of these questions are interesting ones that may not have a clear cut or absolute
answer, but it is our responsibility as global citizens to understand and tackle them with many of the
relevant economic concepts taught in this course. What you will learn here are merely tools, not solutions
to the economy. It will be up to your generation to put these theories to the test and maybe find new
answers to the greatest question of all: how do we balance a world of unlimited wants with limited, scarce
resources?
The long term-goal of this course is to aid student understanding of economic concepts such as scarcity
and cost-benefit analysis. These tools of economic theory and principle are imperative in the decision
making process. The short-term goal of this course is for students to develop a solid foundation through a
survey of microeconomic and macroeconomic concepts. A personal finance component is also included.
Additionally, students will complete both College Board exams in May. The vast majority of colleges
and universities in the United States, grant either academic credit, advanced placement, or both, to
incoming undergraduates for qualifying AP grades and exam scores.
Course Objectives
1. Define and apply key terminology relating to economics;
2. Create and analyze relevant Cartesian graphs associated with economic theory and how changes
in conditions affect the data;
3. Explain in detail how the basic measures of micro- and macroeconomic performance are
calculated and the significance of changes in these measures;
4. Explain and critique monetary and fiscal policy;
5. Apply economic models in everyday life scenarios.
Course Requirements
1. Students are required to attend class prepared for discussion. This will require effort on the
student’s part to complete out-of-class reading and writing assignments.
2. Keep a notebook containing class notes, study questions, and handouts
3. Short answer writing is an important component of the course and the language of economics
slightly deviates from common English. Students must have the ability to write clearly, cogently
and cohesively.
4. Students are required to access online or newspaper articles that relate to business, government
and financials. Students will be required to maintain a blog that correlates economic concepts
discussed in class at that particular time. Students are also required to reply to fellow classmates
blogs
5. Turn in all assignments at the prescribed due date. Failure to do so will result in an incomplete
for the assignment.
6. Students are required to have a free EDU 2.0 account where they will electronically submit
assignments, complete assessments, and engage in economic discussions.
a. http://womack.EDU20.org
i. password information will be submitted via your school email
Time Commitment (VERY IMPORTANT CONSIDERATION)
In order to prepare adequately for the Advanced Placement Macro and Microeconomics Exams in May,
you must spend considerable time preparing for class. The text must be read and problems completed on
time. It is not difficult to fall far behind. Homework problems are a necessary part of learning
economics. Study groups will also be an integral part of outside learning in this course.
Evaluation
The following are assessment tools used to determine your grade:
1. Multiple Choice and Free Response assessments (quizzes and tests)
2. Culmination project (application of economic theory in a simulated stock market activity)
3. Current Events blog (Current events must be from the past three days.)
Attendance
Attendance in class is imperative. Students who miss class often (for any reason) are jeopardizing their
grade and success on the AP Exam dramatically. Students who anticipate missing more than 20% of the
course must speak to me in person with their parents or guardians, tutors, guidance counselors or support
specialists. If a student is absent, the responsibility to acquire assignments and to catch up on notes is in
the hands of the student.
Seeking Assistance
Students can improve their learning considerably by being ACTIVE in the learning process. Questions,
carefully formulated and articulated, make a world of a difference in learning any subject as complex as
Economics. I am available for conversations on Edmodo, during my lunch and conference periods, and
before/after school. Students may also email me at Jeffrey.womack@chagrinschools.org.
Common Traits of Successful AP Economics Students
1. The student assumes personal responsibility for learning economics. The instructor, the text,
and the study guide cannot teach you economics. They are merely resources to help you learn the
subject. The successful student uses each to good advantage.
2. The student brings and uses appropriate prerequisite skills in English, math, and critical
thinking to the learning of economics. The ability to read English carefully and precisely is
obviously needed. The ability to deal with algebraic concepts and simple geometry is also
required for success. Finally the successful student must be able to think critically on issues.
3. The student devotes appropriate time and energy to learning the subject. Reading the text in
a skimming fashion saves time in the short run, but those savings are costly over time. Successful
students read the text very carefully and take notes on concepts presented.
4. The student masters basic concepts and vocabulary before moving on to more difficult
material. Economic concepts tend to build on each other and the failure to comprehend the
initial
5. The student reinforces new knowledge. Rather than moving to the next chapter, the successful
student reads the chapter summary and discussion questions even though they may not be
assigned.
6. The student prepares properly for economics examinations. The foundation of good test
results is the vocabulary of the subject. Next, comes the basic concepts followed by the more
complex relationships. Finally come the practice test questions and sample essays. Only after
these are understood can the student feel prepared.
7. The student does not rely on mere memorization. While there is rotes memory work in
learning any subject, economics is not a set of answers to be memorized. Economics is a way of
analyzing problems and predicting results.
8. The student is willing to ask for help and utilize the available resources. The student who
succeeds in economics class is willing to ask questions out of class. That student recognizes the
value of time and rather than struggle for hours with a concept, is willing to ask questions in class
or email the instructor (not past 8 p.m.) to clarify concepts.
9. The student attends class. Life is far too short not to learn all one possibly can the first time
around.
10. The student sees economics in everyday life and applies class concepts to the national news
and to personal decisions. In order to understand the subject thoroughly, you must use it daily.
Practice makes perfect but only if you practice perfectly!
Texts and Other Materials
KRUGMAN, P, & WELLS, R. (2009). ECONOMICS. NEW YORK : WORTH P UB .
Throughout the course, students will be required to read and write an analysis of a news-related a
magazine or newspaper such as Time, The Economist, US News and World Report, The Wall Street
Journal as current topics are often useful for free-response analysis on the Advanced Placement Exams.
Students will be periodically required to create a blog where they can freely express their educated,
mature and professional opinions about events around the world and how economics fits into the mold.
Further instruction will be provided in class on this matter.
Summer Reading (Choose ONE book)
The goal of this assignment is to have you reflect on your selection. In the case of a book in a subject
area in which you have little training or experience, your reflections will be more reactions or “log style”
comments based on, “I want to learn more about…”, “I was surprised to discover…”, “I disagree with…”
The book review is due by 8 p.m., one week before the start of the school year. Your submission should
be delivered electronically through the EDU 2.0 online tool (Once you have completed the registration
described in this packet.) Clearly indicate your name in the upper right hand corner of the header of your
document. Ensure that you save the document in a file format that is legible to Microsoft Word (Open
Office cannot be read unless you save the file in a different format).
Part One – Summary (50 points)
-
Has the reviewer clearly read and understood the book? Does the paper apply the First
Principles of Economics from the textbook?1
Is the reviewer’s summary of key points clear and accurate?
Has the reviewer reviewed the whole book or merely the first, last and one middle chapter?
Part Two – Reflection (50 points)
-
Has the reviewer made connections between the book and other disciplines?
Does the reviewer show an interest in the book/subject/discipline?
Summer Reading
Harford, T. (2007). The undercover economist (2007 Random House Trade Paperbacks ed.).
New York: Random House Trade Paperbacks.
Year Plan
Note: Where more than one chapter is discussed in one week, discussions will be based on topics, than
that study of each chapter in its entirety. In many cases it is not necessary to cover all materials in each
chapter of the text due to its in-depth and extensive coverage of topics.
(In other words, don’t panic!)
1
See First Principles Page for details.
Principles of Economics
Invisible Hand
Normative and positive economics
Logical thinking fallacies
Scarcity
Choice
Opportunity costs
Unlimited wants
Limited resources
Production Possibilities Frontier
“isms”
Circular flow
Markets
Command, Tradition, and market
“solutions”
Thinking in an economic way
Microeconomics
Supply and Demand
Demand v. quantity demanded
Supply v. quantity supplied
Equilibrium
Surplus
Shortage
Price discovery mechanism
Elasticity; price, income, cross
Total revenue test
Coefficient calculation
Price ceiling and price floors
Law of demand
Marginal utility theory
Utility maximization rule
Business, Labor, and Theory of the Firm
Business organizations
Sole proprietorship, partnership,
corporation
Profit/loss
Circular flow diagram
Costs of production
Fixed cost, variable cost, total
cost, marginal cost, average
fixed cost, average variable
cost, average total cost
Short run v. long run
Market structure
Perfect competition
Monopolistic competition
Oligopoly
Pure monopoly
Barriers to entry
Profit maximization rule; MC-MR
Maximum profit output and price
determination model
Each market structure has different rules
Allocative and productive efficiency
Monopoly power
Price discrimination
Government regulation
Factor Markets
Marginal productivity theory of resource
demand
Derived demand
Marginal physical product (MPP)
Value of marginal product (VMP)
Demand v. quantity demanded of a
resource
Productivity
Economic rent
Rent seeking behavior
Personal Finance (Financial Literacy
Component to meet Ohio standards)
Income determination
Earning Statements (gross wages,
benefits, taxes, and other deductions)
Personal Finance Plans (budgeting,
insurance, philanthropy)
Payment methods
Saving as a buffer against economic
hardship
Loans, mortgages, etc.
Credit, Debt and reducing the risk of
loss
Consumer protection laws
Public Finance
Private goods
Public goods
Externalities (spillovers)
Positive and negative
Median voter rule
Coase theorem
Market failure
Public sector failure
Tax incidence
Progressivity:
Progressive
Proportional
Progressive
Tax reform
Flat tax
Macroeconomics
Introduction to Macroeconomics
Private sector
Public sector
Households as spenders
Households as income receivers
Business population
Domestic output
National income
Price level
Business cycle
Health of the National Economy
Unemployment
Inflation
GDP (real and nominal)
Per capita
GNP
Demand-pull
Cost-push
Phillips Curve
Stagflation
Supply-side economics
Laffer curve
Real-business cycle theory
Classical and Keynesian Economic Theories
Aggregate Demand/Supply
Equilibrium
Real Output
Price Level
Classical theory of employment
Say’s Law
Keynesian economics
Tools of Keynesian employment theory
Consumption and saving
Investment
Expenditure-output approach
Leakage-injections approach
Changes in equilibrium
GDP and the multiplier
Recessionary and inflationary gaps
Fiscal and Monetary Policy
Non/Discretionary fiscal policy
Built-in stabilizers
Supply-side and Demand-side fiscal
policy options
Budget philosophies
Public debt facts and figures
False issues
Crowding out
Growing concerns
Budget deficits
Trade deficits
Public debt
International comparisons
Supply of money
Federal Reserve Banks and monetary
policy
Policy debates
Rational expectations theory
Economic Debates
Growth Economics
Environmentalism v. Economics
Pollution
Current Events
International Economics
World Trade
Economic basis for trade
Comparative advantage
Protectionism
Specialization
Trade barriers
International trade policies
NAFTA
Rise of globalization, shortage of oil,
and China
Exchange rates
Balance of payments
Trade deficits
Financing international trade
International balance of payments
Recent US trade deficits
Growth and developing nations
Rich and poor
Implications of growth and decline
Breaking the poverty
The role of advanced nations
Costs of non-involvement
Debt crisis in develop nations
Public Choice, Taxation and Income
Inequality
Preference through majority voting
Bureaucracy and inefficiency
Imperfect institutions
Hidden costs and clear benefits
Benefits received v. ability to pay
Taxes
Deficits
Education and tax reform
Impossible dreams
Income inequality
Government and redistribution
Causes of income inequality
Economics of poverty
Social insurance programs
Public assistance programs
Reform proposals entitlements
Cutting the national debt
Summer Assignment
Part One – Summary (50 points)
-
Has the reviewer clearly read and understood the book? Has the reviewer applied their
beginning understandings of the First Principles of Economics?
Is the reviewer’s summary of key points clear and accurate?
Has the reviewer reviewed the whole book or merely the first, last and one middle chapter?
Part Two – Reflection (50 points)
-
Has the reviewer made connections between the book and other disciplines?
Does the reviewer show an interest in the book/subject/discipline?
Summer Reading
Harford, T. (2007). The undercover economist (2007 Random House Trade Paperbacks ed.).
New York: Random House Trade Paperbacks.
First Principles of Economics (Krugman Wells)
Individual Choice
1. Resources are scarce.
2. The real cost of something is what you must give up to get it.
3. “How much?” is a decision at the margin.
a. Margin = each additional good or service consumed or produced
4. People usually exploit opportunities to make themselves better off.
Interaction: How Economies Work
1.
2.
3.
4.
5.
There are gains from trade.
Markets move toward equilibrium.
Resources should be used as efficiently as possible to achieve society’s goals.
Markets usually lead to efficiency.
When markets don’t achieve efficiency, government intervention can improve society’s welfare.
Economy-wide Interactions
1. One person’s spending is another person’s income.
2. Overall spending sometimes gets out of line with the economy’s productive capacity.
3. Government policies can change spending.
Turn in by Aug. 12, 2013 at 8 p.m. on Womack.edu20.org
Enrollment invitations send to your school email/ Submit as an attachment