AP Economics

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Advanced Placement Economics (Micro and Macro)

Instructor:

Mr. Scott Meikle, Room 624

Contact Information:

[email protected]

Website: (702) 799 – 7870 ext. 3624 http://www.atech.org/faculty/meikle/index.html

Course Scope

AP Economics is a college-level course that focuses on the decision making of individuals, businesses, and the government. Students will study a variety of economic theories and analyze their practical application in the real world.

This yearlong course will cover both microeconomics and macroeconomics. Microeconomics focuses on the supply and demand for products, the labor markets, and the role competition plays in a free market system. Macroeconomics focuses on the economy as a whole, including economic measures, economic growth, fiscal policy, monetary policy, and international economics. Students are expected to take both AP exams in May.

This class will prepare you for college and potentially allow you to earn 6 university credits upon passing both AP exams. Extensive math skills are not required; however, the ability to analyze graphs and charts is essential.

Course Goals

Microeconomics:

The purpose of the AP course in microeconomics is to give students a thorough understanding of the principles of economics that apply to the functions of individual decision makers, both consumers and producers, within the economic system. It places primary emphasis on the nature and functions of product markets and includes the study of factor markets and of the role of government in promoting greater efficiency and equity in the economy.

Macroeconomics:

The purpose of the AP course in macroeconomics is to give students a thorough understanding of the principles of economics that apply to an economic system as a whole. The course places particular emphasis on the study of national income and price-level determination, and also develops students’ familiarity with economic performance measures, the financial sector, stabilization policies, economic growth, and international economics. There is no single approach that an AP Macroeconomics course is expected to follow. Whatever the approach, however, AP teachers are advised to take into account certain topics generally covered in college courses.

Please Note:

The order of the syllabus is to be taught at the discretion of the teacher.

Materials

A.

Textbook/Resources:

Mankiw, N. Gregory. Principles of Economics. 6 th

ed. South-Western/Cengage Learning,

2012.

Morton, John. Advanced Placement Economics, Microeconomics: Student Activities. 3 rd ed. National Council on Economic Education, 2003.

Mr. Meikle’s Website:

http://www.atech.org/faculty/meikle/index.html

B. Supplemental materials

Items, such as political and historical documents, writings, documentaries, bibliographies, etc., will also be used throughout the year. These will be supplied by the instructor, or directions will be given so the students can obtain such records.

C. Required items:

Three-ring binder

College-ruled notebook paper

Pens (Black or Blue ink only) and #2 Pencils

Graph Paper

D. Suggested items

Whiteout

Highlighter

Stapler

Three-hole punch

Post-it notes

Course Outline

Microeconomic Outline (1

st

semester)

Unit I: Basic Economic Concepts - 2 Weeks (8% – 14%)

(Chapters 1, 2, 3: Mankiw)

A.

Founding Principles

B.

Scarcity, the economizing problem

Tradeoffs and Opportunity Cost

Free-market system (Adam Smith’s invisible hand)

Types of Economics

Microeconomics vs. macroeconomics

Positive economics vs. normative economics

C.

D.

Production Possibilities Graph

Straight vs. bowed PPF

Underutilization, full employment, and unattainable

Law of increasing opportunity cost

3 shifters of the PPF

Consumer goods vs. capital goods

Circular Flow Model

Product market, Factor market, and Public sector

E.

Specialization and Trade

Absolute advantage

Comparative advantage

Unit II: Supply, Demand, and Consumer Choice – 4 Weeks (20% - 30%)

(Chapters 4, 5, 6, 9, 21: Mankiw)

A.

Demand (graph)

Law of demand

Market demand curve

Determinants of demand

Normal vs. inferior goods

Substitutes and complements

B.

C.

Equilibrium and Efficiency (graph)

Equilibrium price and quantity

Disequilibrium: surplus and shortages (graphing)

D.

Supply (graph)

Law of supply

Market supply curve

Determinants of supply

E.

Government Policies (graphs)

Price floors and Price ceilings

Excise taxes, Subsidies, Tariffs, Quotas

Elasticity

Price, Income, and Cross Price elasticity of demand

The total revenue test (graph)

F.

Consumer Choice

Law of diminishing marginal utility, Substitution effect, Income effect

Marginal benefit/cost

Utility maximizing rule

Unit III: Costs of Production and Perfect Competition – 3 Weeks (15% - 25%)

(Chapters 13 and 14: Mankiw)

A.

Economists vs. Accountants

Total revenue

Explicit and Implicit costs

Economic costs and profits

B.

Costs of Production (graph)

Fixed Costs, Variable costs, and Total costs

Per-unit costs (AVC, AFC, ATC)

Shifts in MC, ATC. AVC, and AFC

Marginal costs and Marginal revenue

Sunk costs

C.

Law of Diminishing Marginal Returns (graph)

Stage I: increasing returns

Stage II: decreasing returns

Stage III: negative returns

D.

E.

Long-run Production Costs (graph)

Economies of scale, Constant Returns to scale, Diseconomies of scale

Characteristics of Perfect Competition

Price takers

Demand = MR= Price

Graph: Firm vs. industry (market)

Short-run (profit or loss)

Long-run equilibrium (New firm enter and exit)

Normal profit

Shutdown decision (P< AVC)

Productive efficiency (P = Min ATC)

Allocative efficiency (P = MC)

Unit IV: Imperfect Competition – 3 Weeks (15% - 25%)

(Chapters 15, 16, 17: Mankiw)

A.

Characteristics of Monopolies

Barriers to entry

MR below demand (graphs)

Profit-maximizing price and quantity

Natural monopoly

B.

Effects on overall economy

Compared to competitive industry

Dead-weight loss

X-efficiency

C.

Price discrimination (graph)

Purpose and results

Graph (MR=D)

D.

Regulation

Unregulated price, fair return price, and socially optimal price

Taxes and subsidies

E.

Characteristics of Monopolistic Competition

Long-run equilibrium (graph)

Excess capacity

Non-price competition

Product differentiation

F.

Characteristics of Oligopolies

Kinked demand curve-competitive pricing

Game theory (chart) price leadership

Collusion and cartels

Unit V: Factor Markets – 3 Weeks (10 – 18%)

(Chapters 18 and 19: Mankiw)

A.

Factor Markets Overview

Circular Flow of Economic Activity

Review definitions of marginal revenue, marginal product, the law of diminishing marginal returns, rent, rent-seeking behavior, land, physical capital, goods,

B.

services, consumption, expenditures, resources, costs, interest, and revenue.

Demand for labor

Derived Demand

MRC = MRP

Least Cost/Profit Maximizing

Combination of Resources

Marginal physical product (MPP)

Value of marginal product (VMP)

C. Perfectly competitive labor market (graph)

Wage makers

Perfectly elastic supply of labor

Demand v. quantity demanded of a resource

Productivity

D. Monopsony (graph)

Wages and quantity compared to perfectly competitive labor market

E. Labor Unions

Goals and methods

F. Effects of Minimum Wage

Arguments for and against minimum wage (graphs)

G. Wage differentials

Investment in human capital vs. physical capital

Distribution of Income Among Factors

Unit VI: Market Failures and Government Involvement – 3 Weeks (12% - 18%)

(Chapters 10, 11, 20: Mankiw)

A.

Public goods

Demand for public goods

Supply of public goods

Free-rider problem

Non-excludability and Non-rivalry

B.

Positive externalities/spillover benefits (graph)

Marginal social benefits vs. private benefits

Underallocation

Government remedy

C.

Negative externalities/spillover costs (graph)

Marginal social cost vs. private cost

Overallocation

Government remedy

D.

Income distribution

Lorenz curve (graph)

Tax incidences

Macroeconomics Outline (2

nd

Semester)

Unit I: Basic Economic Concepts – 1 Week (review from 1

st

Semester)

(Chapters 1, 2, 3, 4, 5: Mankiw)

A.

B.

C.

D.

E.

F.

Scarcity: the nature of economic systems

Opportunity costs and tradeoffs

Production possibilities graph

Absolute advantage, Comparative advantage, and Specialization

The functions of any economic system (what, how, and for whom to produce?)

Demand, supply, and price determination

Unit II: Measurement of Economic Performance – 2 Weeks (12% - 16%)

(Chapters 23, 24, 28, 30: Mankiw)

A.

Gross domestic product and national income concepts.

Components of GDP

Calculating GDP using the Expenditure and Income Approach

Real vs. Nominal GDP

Per Capita GDP

Shortcomings of GDP

B.

Unemployment and the Business cycle

Four phases of the business cycle

Measuring Unemployment

Types of Unemployment

Natural rate of Unemployment, actual rate of unemployment

C.

Inflation and price indices.

Calculating Consumer Price Index (CPI)

Types of Inflation

Consequences of inflation

Real vs. nominal income/ interest rates

Unit III: National Income and Price Determination – 3 Weeks (15% - 25%)

(Chapters 33, 34, 35: Mankiw)

A.

Aggregate Demand Graph

Circular flow model

Determinates of aggregate demand

Multiplier

B.

Aggregate Supply Graph

Determinants of aggregate supply

Short-run vs. Long-run analysis (AD/AS model)

Classical analysis

Keynesian analysis

C.

Macroeconomic equilibrium

Real output and price level (graph)

Short run vs. long run output

Actual vs. full employment output

Income-Consumption and Income-Savings Model

Average Propensity to Consume/Save

Marginal Propensity to Consume/Save

Real interest rate-investment relationship

Investment Demand Curve (graph)

Unit IV: Financial Sector – 4 Weeks (10% - 20%)

(Chapters 26, 29: Mankiw)

A.

Money and banking

B.

Definition of money and its functions

Measurements of the money supply

Banks and the creation of money

Money market

Role of the central bank and the money supply

Tools of the central bank

Expansionary vs. contractionary monetary policy

Real vs. nominal interest rates

C.

D.

Fiscal policy

Expansionary vs. Contractionary fiscal policy

Demand-side vs. supply side economics

Budget deficits/surpluses

Automatic stabilizers and crowding out

Fiscal and monetary mix

Interaction of fiscal and monetary policies

Monetarist-Keynesian controversy

Unit V: Macroeconomic Debates and International Trade and Finance – 4 Weeks (20% -

30%)

(Chapters 31, 32, 36: Mankiw)

A.

Trade-offs between inflation and unemployment

Unemployment-inflation relationship and the Phillips Curve

The long-run Phillips Curve (graph)

B.

Economic growth

Production possibilities analysis of growth (graph)

U.S. Economic growth rates

Accounting for growth

C.

Disputes over macro theory and policy

Classical view vs. Keynesian view

New classical view of self-correction

D.

Comparative advantage revisited as to why nations trade

E.

Supply and Demand analysis of Exports and Imports

Trade Barriers: Tariffs, Quotas, & Embargoes

Protectionism vs. free trade arguments

International finance

Balance of payments, Current account, Capital Account

Flexible vs. fixed exchange rates

Currency appreciation/depreciation

U.S. trade deficit

AP Exam Review – 2 and ½ weeks (More information in April)

Methodologies and criteria for grading

This course will include varied techniques for instruction. These assignments will also be graded, with the total points available determining the weight for that particular assignment. These methods will include:

- Cooperative group work

- In class assignments

- Lecture and discussion

- Chart work - Video presentations

- Quizzes - Chapter Problem Sets

- Tests

Grading Policy

A. Grading Scale

A .......... 90 – 100 %

D .......... 60 – 69 %

B .......... 80 – 89 %

F .......... 0 – 59 %

C .......... 70 – 79 %

Your nine-week grade will be based on a cumulative point system and the percentage of the total points earned. Total points available will vary each nine-week period.

The instructor reserves the right to modify the grading scale, on an assignment or test, as needed.

There is no curve for the class.

B. Quarter weights

Quizzes = 20% Problem Sets = 25%

Unit Tests = 35% Partner Tests = 20%

C. Semester weights

Quarter Grade ………. ……….40 %

Semester Exam Grade ………. 20 %

D. Tests and Quizzes

An average of two to four oral quizzes will be given for each unit covered in class. These quizzes will cover reading and lecture material.

Each unit will include a practice test. The practice test will be graded and will contain 15 – 20 questions. This test will be taken with your partner.

Each unit will include a test. The tests will generally include 30 – 40 multiple choice questions and an FRQ. Approximately half of the multiple choice questions will be from released exams.

E. Problem Sets

Problem Sets are essentially take home practice questions that require you to explain and apply the concepts discussed in class and in your book.

Each problem set will contain at least two Free Response Questions (FRQs) similar to those given on the AP Exam.

Problem sets are expected to be typed, double-spaced, 12 font size, with reasonable margins.

(Special cases will be excused upon request)

F. In class activities

These are not graded; however, successfully working with partners/small groups will help you investigate and understand complex concepts. Also, these will provide opportunities for practice and mastery of content.

G. Make-up Policy

The following is from CCSD policy 5113, regarding make-up work. This is the policy that I will follow:

“After any absence, a secondary student is required to initiate contact with the teacher(s) to obtain appropriate makeup work within three school days immediately following the absence.

Once contact has been made with the teacher(s), specific makeup work must be completed and returned to the teacher(s) within a reasonable length of time, to be determined by the teacher and communicated to the student/parent or legal guardian. The makeup work must be returned to the teacher(s) by the specified due date if it is to be acknowledged. Students shall be allowed a minimum of three (3) days to complete makeup work.”

In addition to the above policy, the following policies will also be enforced:

Arrangements will be made using a log book located at my desk. All assignments and/or arrangements will be tracked; this is for your protection as well as mine.

If you miss a quiz or test you may NOT make this up during class. You will have to come

 in before or after school.

Any assignment given prior to an absence is due the first day of the student’s return.

Special cases will be accepted, but this is at the teacher’s discretion.

H. Citizenship Grade

Each quarter, you will be assessed a citizenship grade. Essentially, I will determine your level of citizenship as it pertains to this class. Things I will look for, in terms of determining your grade, will be:

Interest in current events.

Ability to connect the past with the present.

A genuine interest in the material, as it is presented.

A positive and productive attitude towards this class and subject matter.

The grade given for this section will be as follows:

O = Outstanding N = Needs improvement

U = Unsatisfactory S = Satisfactory

I. Notebooks

It is not my intention to check notebooks on a regular basis. However, I will “spot-check” students from time-to-time to ensure compliance. How you construct and use the notebook is your own choice. I believe you will find an organized and up-to-date notebook to be a useful tool for achieving success in this course.

Cornell Notes will be required for all in-class notes that you will take.

J. Homework

UNDER NO CIRCUMSTANCES WILL LATE WORK BE ACCEPTED

Homework will be given on a daily basis. This may include reading, preparing for a quiz, reviewing for a test, completing chapter problem sets, or any other tool I may use at my discretion.

Point values and the category of grading will vary depending on the type and scope of the assignment.

K. Expectations on assignments

Spelling, grammar, neatness, and following directions are required on ALL assignments. Failure to adhere to these standards will result in a loss of points.

L. Extra Credit

It is not my general policy to offer extra credit. However, extenuating circumstances in the news

(events, special occasions, etc.) may offer an opportunity to extend an extra credit assignment.

This is at my sole discretion. Information will be given when appropriate.

Classroom Behavior and Expectations

As all of you are experienced at being in the classroom, all of you should know what is expected of you

.

However, here are some of the general rules pertaining to this class:

1. Show respect to faculty, staff, and other students at all times.

- This includes raising your hand to be called upon and not interrupting while others are speaking.

2. No racial or ethnic slurs, nor sexually suggestive language, will be tolerated at any time.

3. Be prepared to start class at the appropriate time.

- This includes having all of the appropriate supplies and assignments.

4. No unauthorized work on computers.

- This includes visiting websites that are deemed inappropriate by the school.

5. No food or drink is allowed in the classroom.

6. Students can only leave the class with a corridor pass.

7. No use of personal electronic devices (I-Pods, cell phones, etc.).

- There is absolutely no need for these in class, and they will be confiscated if found. This process is explained in the Student Handbook.

8. All of the other school policies printed in the Parent/Student Handbook will be

adhered to at all time.

*Please Note*

:

1. A-TECH employs a progressive discipline policy which can be found in the

Parent/Student handbook.

2. Students will be expected to follow these policies at all times.

3. I will notify students of any changes, if necessary, to the general classroom rules.

Warnings/Reprimands

Each case is different, but here is a general list of consequences for breaking any of the classroom rules.

1. Verbal warning

2. Rearrangement of seats

3. Conference with the teacher

4. Notification call to parents

*

In severe cases, students may be referred to the Dean of Students

*

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