ECON 1: Principles of Microeconomics – Fall 2017

Damian Park – dpark@scu.edu

Lucas Hall 216ZZ
Office Hours: MWF 10:30-11 & 2:15-2:45 or by appointment

Course overview
The purpose of this course is to familiarize you with basic microeconomic concepts and theories. You should expect to
develop an intuitive understanding of these concepts and theories as well as the ability to analyze problems from an
“economic perspective.” Some of the topics that we will discuss include economic efficiency, tradeoffs, supply and demand,
the policy impact, and firm behavior.

Further, as part of the social science core curriculum, you should expect to develop your skills in the following areas:
scientific Inquiry, complexity, critical thinking, and mathematical & quantitative reasoning. You will:
1. Apply deductive and inductive reasoning to analyze social science topics,
2. Evaluate evidence used to validate theories, hypotheses, or predictions, and
3. Appreciate that theories and data analysis often admit multiple interpretations and evaluate the relative merits of
alternative perspectives.

SCU Learning objectives: Economics Principles Sequence: ECON 1-2-3

ECON 1: Principles of Microeconomics

1. Apply the concepts of opportunity cost and comparative advantage to analyze tradeoffs and gains from trade.
2. Understand the role of supply and demand and the coordinating role of prices in the allocation of goods and services in a market
economy.
3. Apply the concepts of demand and supply elasticity to explain or predict the quantitative impact of changing market conditions
on prices and quantities.
4. Analyze the impact of various government policies and regulations, including price controls and excise taxes, using the tools of
supply and demand, and consumer, producer, and social surplus.
5. Describe the nature and goals of private business firms and analyze the implications of profit maximization for quantity and price
determination in competitive and monopoly markets.
6. Analyze and evaluate market inefficiencies (market failures), such as externalities, and potential policy responses to them.
7. Analyze rational consumer choice using indifference curves and budget constraint.
8. Construct and interpret key microeconomic diagrams and models.

ECON 2: Principles of Macroeconomics

 Define and interpret national income accounts and other macroeconomic statistics, including measures of unemployment and inflation.
 Analyze the process of long-run economic growth, including the roles of population change, capital accumulation, and technological change.
 Analyze the short-run determination of aggregate income, prices, and unemployment using the concepts of aggregate demand, aggregate supply, and
inflation adjustment.
 Describe the institutional structures of the U.S. banking system and financial markets, and analyze their role in the creation of money and
determination of interest rates.
 Analyze the determination and impact of monetary and fiscal policy, and illustrate using current and historical examples.
 Construct and interpret key macroeconomic diagrams and models.

ECON 3: International Economics, Growth, and Development

 Define and interpret international accounts and statistics, including trade and capital flows, balance of trade, balance of payments, current account,
and exchange rates.
 Analyze international trade and specialization using the theory of comparative advantage, and assess the effects of trade on incomes, economic
growth, and distribution.
 Apply theories of trade and welfare economics to evaluate the distributional and efficiency impacts of trade policies, including tariffs, quotas, and
other forms of protectionism.
 Describe and analyze the economic effects of international agreements and institutions.
 Analyze the behavior of international financial and currency markets: balance of payments, determination of exchange rates, purchasing power parity,
international financial crises.
 Analyze monetary policy making under different exchange rate regimes.
 Use economic theory and evidence to evaluate policies aiming to foster economic development and poverty reduction.

Disability Accommodation Policy: To request academic accommodations for a disability, students must be registered with Disabilities
Resources located in Benson, room 216. If you would like to register with Disabilities Resources, please visit their office in Benson 216 or
call (408) 554-4109. You will need to register and provide professional documentation of a disability prior to receiving academic
accommodations.
Brief Schedule (pre-lecture assignments not shown)

Week Chapter Mon Wed Fri

1 1&2
2 3 Sapling Ch2+ Mid1-trade
3 4 Sapling Ch3 Opportunity Cost Paper
4 5 Sapling Ch4+Mid1-Equil Test1
5 6 Sapling Ch5
6 8 Sapling Ch6+Mid2-Taxes
7 10-11 Sapling Ch8+Mid2-Ceilings
Sapling Ch10+Mid3-Externalities Test2
8 11,13 News Analysis Paper
9 13 Sapling Ch11+Mid3-Firms
10 23 Sapling Ch13+Mid3-Monopoly Sapling Ch23
11 Final (8am class) Final (9:15/1 classes)
GRADING
2 Midterms 40% Papers 5% Camino: Old Midterm Problems (1 attempt) 5%
Final Exam (cumulative) 30% Sapling HW 10% Camino: Pre-lecture Quizzes (3 attempts) 5%
Attendance 5%

POLICIES
 Eating OK; be punctual; laptop usesit up front
 Text: Modern Principles: Microeconomics 2e by Cowen/Tabarrok. http://www.gettextbooks.com/isbn/9781429239998
 Tests: If you cannot take a test, you must email me as soon as possible, but no later than one hour before class starts, and explain why
you cannot. 0 w/o arrangements & acceptable excuse.
o Regrades: Submit regrade requests in writing; I can add or subtract points on any part of the exam.
o Cheating on tests will result in an F for the course. Cheating will also be reported to the Office of Student Life
according to the University Academic Integrity Protocol.
 Assignments: They are due by the beginning of your class. Camino locks them soon after.
o If Camino says it is late, I may mark it 0 even if you completed it
o For other assignments – w/ special circumstances, I might allow them
 Attendance: You get credit for showing up (excused/unexcused is not relevant
o Participation grade may suffer for egregious texting / attention deficits.
 Tutoring: Free Econ 1 tutors in the Learning Resource Center (Benson 1, in the basement). scu.edu/drahmann for appts.
 Course Questions? Post to Camino – anyone can respond. (make sure your Camino notifications are ON)

I am very committed to your success in this course and will be happy to discuss your progress at any point.

Pathways: This course is associated with the Pathways: Design Thinking and Sustainability. You can find information about Pathways
on the Core Curriculum website http://scu.edu/core including specific Pathways, all courses associated with them, and the Reflection
Essay prompt and rubric used to evaluate the final essay you will submit. If you declare this Pathway, you may use a representative piece of
work from this course as one of the Pathway materials you will upload via eCampus during your junior or senior year. Therefore, we
recommend that you keep electronic copies of your work using Dropbox or Google Docs, in addition to saving copies on your own
computer or flash drives. This may ensure you will have a range of choices for retrieving your saved files when you analyze and assemble
your Pathway materials in preparation to write the Pathway reflection essay.

Sexual Harassment and Discrimination (Title IX): Santa Clara University upholds a zero tolerance policy for discrimination,
harassment and sexual misconduct. If you (or someone you know) have experienced discrimination or harassment, including sexual assault,
domestic and dating violence or stalking, we encourage you to tell someone promptly. For more information, please go to
www.scu.edu/studentlife/about/osl.cfm and click on the link for the University’s Gender-Based Discrimination and Sexual Misconduct
Policy or contact the University's EEO and Title IX Coordinator, Belinda Guthrie, at 408-554-3043 or by email at bguthrie@scu.edu.
Reports may be submitted online through www.scu.edu/osl/report or anonymously through Ethicspoint: www.ethicspoint.com or
http://stage-www.scu.edu/hr/quick-links/ethics-point/
 Detailed Schedule

Day Topics Readings/Podcasts (optional items are indented) Assignments

Opportunity
Mon, Sep 18 cost
Trade Cowen/Tabarrok Ch 1 (big ideas 1-5
o http://www.mruniversity.com/courses/principles-economics-
microeconomics/introduction-microeconomics
Cowen/Tabarrok Ch 2
 Comparative advantage: http://www.mruniversity.com/courses/principles-economics-
microeconomics/comparative-advantage-definition-tasmania
 Comparative advantage 2: http://www.mruniversity.com/courses/principles-economics-
microeconomics/comparative-advantage-definition-opportunity-cost
o HW solved from the above video
http://www.mruniversity.com/courses/principles-economics-
Wed, Sep 20 microeconomics/comparative-advantage-trade-homework
Trade  Podcast – Planet Money Episode #467 “Tires, Taxes and the Grizz”
http://www.npr.org/blogs/money/2013/06/21/194326482/episode-467-tires-taxes-and-the-
grizz or http://conversableeconomist.blogspot.com/2012/05/tire-tariffs-saving-jobs-at-
Fri, Sep 22 900000.html
Demand Cowen/Tabarrok Ch 3 demand section Ch 2 (Sapling +
 Intro: http://www.mruniversity.com/courses/principles-economics-microeconomics/demand- Problem)
curve-shifts-definition
 Consumer Surplus / reading demand curves: http://www.mruniversity.com/courses/principles-
Mon, Sep 25 economics-microeconomics/demand-curve-consumer-surplus-definition
 Shifts in Demand: http://www.mruniversity.com/courses/principles-economics-
Wed, Sep 27 microeconomics/demand-curve-shifts
Supply Cowen/Tabarrok Ch 3-supply section
 Intro: http://www.mruniversity.com/courses/principles-economics-microeconomics/supply-
curve-definition-example
 Producer Surplus / reading supply curves: http://www.mruniversity.com/courses/principles-
economics-microeconomics/supply-curve-producer-surplus-definition
 Shifts in Supply: http://www.mruniversity.com/courses/principles-economics-
Fri, Sep 29 microeconomics/supply-curve-shift
Equilibrium Cowen/Tabarrok Ch 4 Ch 3 (Sapling)
 Uber and surge pricing: http://www.vox.com/2014/12/31/7475923/case-for-surge-pricing
 Intro: http://www.mruniversity.com/courses/principles-economics-
Mon, Oct 02 microeconomics/equilibrium-price-supply-demand-example
Wed, Oct 04 Experiment
Equilibrium  Gains from Trade at equilibrium: http://www.mruniversity.com/courses/principles-economics- Opportunity
microeconomics/equilibrium-supply-demand Cost
 Change in Demand vs Change in Q Demanded: - Assignment
http://www.mruniversity.com/courses/principles-economics-microeconomics/supply-demand-
definition
o Podcast – Kid Rock vs the Scalpers
http://www.npr.org/blogs/money/2013/06/25/195641030/episode-468-kid-rock-
vs-the-scalpers
Fri, Oct 06 o Kidney Markets suffer when illegal http://nyti.ms/1p14JiA
Elasticity Cowen/Tabarrok Ch 5 Ch 4 (Sapling +
 Demand elasticity intro / determinants: http://www.mruniversity.com/courses/principles- Problem)
economics-microeconomics/elasticity-demand-definition
 Demand elasticity calculation/classification / revenue and applications (drugs/farmers) (first 7
minutes only): http://www.mruniversity.com/courses/principles-economics-
Mon, Oct 09 microeconomics/calculate-elasticity-demand-formula
Elasticity  Supply elasticity intro / calculation: http://www.mruniversity.com/courses/principles-
economics-microeconomics/elasticity-supply-midpoint-formula
 Supply elasticity application – slaves (intro): http://www.mruniversity.com/courses/principles-
economics-microeconomics/elasticity-example-slave-redemption-sudan
 Slaves and Gun Buybacks (slave / gun graph examples):
http://www.mruniversity.com/courses/principles-economics-microeconomics/elasticity-
Wed, Oct 11 examples-applications
Fri, Oct 13 Test on Chapter 2-4
Taxes Cowen/Tabarrok Ch 6 (taxes) Ch 5 (Sapling)
 Graphing Taxes / tax incidence: http://www.mruniversity.com/courses/principles-economics-
Mon, Oct 16 microeconomics/taxes-subsidies-definition-tax-wedge
 Who pays a tax: http://www.mruniversity.com/courses/principles-economics-
microeconomics/tax-burden-elasticity-affordable-care-act-health-insurance-mandate
Tax Revenue and DWL: http://www.mruniversity.com/courses/principles-economics-
Wed, Oct 18 microeconomics/deadweight-loss-definition-yacht-tax
Subsidies Cowen/Tabarrok Ch 6 (subsidies)
 Intro / Cotton Farmers: http://www.mruniversity.com/courses/principles-economics-
microeconomics/subsidies-definition-subsidy-wedge
o Health Care Subsidies and waste: http://tinyurl.com/ljgancl

Fri, Oct 20
 Price Ceilings Cowen/Tabarrok Ch 8 (price ceilings) Ch 6 (Sapling +
 Intro: http://www.mruniversity.com/courses/principles-economics-microeconomics/price- Problems)
controls-definition-nixon
 Quality reduction: http://www.mruniversity.com/courses/principles-economics-
microeconomics/price-ceiling-shortages-reduce-quality
 Wasteful Search Costs: http://www.mruniversity.com/courses/principles-economics-
microeconomics/price-ceiling-gasoline-example-search-costs
 Misallocation and random allocation: http://www.mruniversity.com/courses/principles-
economics-microeconomics/price-ceiling-misallocation-of-resources
Mon, Oct 23  Venezuela: https://www.caracaschronicles.com/2016/07/25/26-hours-guayana/
Price Ceilings  Podcast – EconTalk with Mike Munger and Russ Roberts (60 min)
http://www.econtalk.org/archives/2007/01/munger_on_price_1.html Optional:
o Problem With Price Gouging Laws: https://hbr.org/2013/07/the-problem-with-
Wed, Oct 25 price-gouging-laws
Price Floors Cowen/Tabarrok Ch 8 (price floors)
 Minimum Wage: http://www.mruniversity.com/courses/principles-economics-
microeconomics/price-floor-example-minimum-wage
 Labor Markets: http://www.mruniversity.com/courses/principles-economics-
microeconomics/labor-economics-marginal-product-labor
o Airlines: http://www.mruniversity.com/courses/principles-economics-
microeconomics/price-floor-effect-on-quality-airline-deregulation
Fri, Oct 27 o 40 Centuries of Price Controls
Externalities Cowen/Tabarrok Ch 10 Ch 8 (Sapling +
 Negative: http://www.mruniversity.com/courses/principles-economics- Problems)
microeconomics/externalities-definition-pigovian-tax
 Positive: http://www.mruniversity.com/courses/principles-economics-microeconomics/flu-
shot-positive-externalities-pigovian-subsidy

Mon, Oct 30 o Alcohol Reading: http://tinyurl.com/mmpc99n

Wed, Nov 01 Externalities o Freakonomics Excerpt (on Camino)
Public Goods  Cowen/Tabarrok Ch 18
 https://www.mruniversity.com/courses/principles-economics-microeconomics/public-goods-
example-asteroid-defense
o https://www.mruniversity.com/courses/principles-economics-
Fri, Nov 03 microeconomics/public-goods-definition-nonexcludable-nonrival
Review Ch 10 (Sapling +
Problems)
News Analysis
Mon, Nov 06 Paper
Wed, Nov 08 Test on Chapter 5,6,8&10
Firms and Cowen/Tabarrok Ch 11
Competition  Intro to the firm / what price: http://www.mruniversity.com/courses/principles-economics-
microeconomics/competitive-firm-definition
 Profit / what quantity: http://www.mruniversity.com/courses/principles-economics-
microeconomics/profit-maximization-marginal-cost-marginal-revenue

o How Costco Became the Anti-Wal-Mart: http://nyti.ms/1eBhD4P

Fri, Nov 10
Entry and Exit  Podcast – Marijuana Arbitrage:
http://www.npr.org/blogs/money/2013/05/07/182010027/episode-456-marijuana-arbitrage
 AC / Entry and Exit / Profit Graphically: http://www.mruniversity.com/courses/principles-
economics-microeconomics/profit-maximization-average-cost

 Optional: Competition Dynamics with constant costs:

http://www.mruniversity.com/courses/principles-economics-microeconomics/supply-curve-
Mon, Nov 13 constant-cost-industry
Monopoly Cowen/Tabarrok Ch 13 Ch 11 (Sapling +
 Intro: http://www.mruniversity.com/courses/principles-economics- Problem)
microeconomics/monopoly-profit-maximization-price-aids-medication
 Calculating Profit Video: http://www.mruniversity.com/calculating-monopoly-profit-practice-
questions
Wed, Nov 15 o
Monopoly  NYC Taxi Medallions: http://tinyurl.com/klmqnvb
o Optional: "Microsoft and Standard Oil: radical lessons for antitrust reform":
Boudreaux - Microsoft_and_Standard21.pdf
Fri, Nov 17
Consumer Cowen/Tabarrok Ch 23 Ch 13 (Sapling +
Choice  Intro: https://www.mruniversity.com/courses/principles-economics- Problem)
microeconomics/consumer-choice-marginal-utility
 Budget Constraints: https://www.mruniversity.com/courses/principles-economics-
microeconomics/consumer-choice-budget-constraints-opportunity-costs
 Indifference Curves: https://www.mruniversity.com/courses/principles-economics-
Mon, Nov 27 microeconomics/consumer-choice-indifference-curves-marginal-rate-substitution
Consumer  Optimization: https://www.mruniversity.com/courses/principles-economics-
Wed, Nov 29 Choice microeconomics/consumer-choice-optimization-marginal-utility
Fri, Dec 01 Review Ch 23 (Sapng)
Mon, Dec 04 Exam 9:10-12:10 (8:00 am class)
Wed, Dec 06 Exam 9:10-12:10 (9:15 am class)/ 1:30-4:30 (1:00 class)