Economics 102 Spring 2005 Office: P-17-E

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Economics 102 Spring 2005 Office: P-17-E

Loren A. Lee Extension 2419

or

http://daphne.palomar.edu/llee

Principles of Microeconomics

Course Objective

Microeconomics is the study of the behaviors of the basic units of an economy; consumers, businesses, workers, and governments. Their behaviors are analyzed within the context of a market system. At the end of the term, one should have a good understanding of economists' theories of the behaviors of each of these units, theories that have been developed over the past 200 years. One should also have a good understanding of the workings of a market system.

Pre-requisites: None. Economics 101 and 102 may be taken in any order.

Office Hours: Mondays and Wednesdays 8.00 – 9.20 and 11.00 – 12.20

Tuesdays and Thursdays 8.00 – 9.30 and after 12.30

A special office hour will be held for people in this section on Thursdays at 9.30

Texts: Lee Principles of Microeconomics (Required)

The book is available online at

http://daphne.palomar.edu/llee Go to Microeconomics. The book is also available

on the Blackboard site.

The book is also available for purchase.

Readings: Reading assignments for each class period are noted below and are provided on the Blackboard site. Each chapter has a set of objectives to let you know what you are expected to know. A Glossary and Practice Quizzes and Old Examinations are available online and in the text. The Glossary also tells you the pages in the text where that concept will be found.

Instructions: This is a hybrid course. The class will meet only on Tuesdays at 9.30 in Room P30. The rest of the work is to be conducted online. Readings and Assignments for each week are posted on the Blackboard site. Readings and assignments are also available on my web site.

To access the Blackboard site, go to http://www.palomar.edu/pconline/ . When you log in, your user name and default password are your 9-digit Palomar student ID number. The section number for this course is _____.

Homework will be due every week at the Tuesday class meeting. The Tuesday class meeting will also be used for quizzes and examinations according to the schedule below.

Evaluation Procedures:

There will be three examinations given during the semester at dates that will be announced. Answers will be all written. In preparing for these examinations, you should answer all of the study questions in the Objectives to the chapters. Unless otherwise informed, you are responsible for all of these questions. Each examination is worth 100 points. Old examinations are available on my web site.

There will be in class quizzes given on the dates announced in class and on the Blackboard site. These will be worth 10 points each and will involve multiple choice questions. A quiz may be made up for a maximum grade of 7 prior to the next examination. Practice Quizzes are available on my web site.

There will be a final examination that will cover the entire course. 100 points will be for multiple choice questions and 100 points will be for a series of written questions. You will see the written questions in advance of the examination. An old multiple choice examination is available online.

Attendance and homework will be part of the grade. Five points will be awarded for attendance on Tuesdays. Homework will be assigned to be turned in at the next class meeting. Homework assignments will be worth 10 points each. Late assignments will not be accepted without a compelling reason, such as prolonged illness.

Grading is done on an individual basis; there is no curve used. Grading is set so that 90%+ is an A, 80-89% is a B, 60-79% is a C, and 50-59% is a D.

You are expected to attend all class meetings and to read the blackboard site. Announcements will be posted. You are responsible for all material presented and for any announcements made. Anyone wishing to drop the course must initiate the procedure, as drops will NOT be initiated by the instructor. FW grades are given only to those who drop-out by the 3rd week.

Week #1 (January 18 to 24) :

For this week, read chapters 1 and 2. You will find them on the Blackboard site under Course Documents. You will also find them on my web site.

On January 25th, you are to turn in the Homework Assignment for Week 1. You will find it on the Blackboard site under Course Assignments. You will also find it on my web site as Page 1 of the Economics 102 Homework Assignments file. Homework assignments are worth 10 points each. Late assignments will NOT be accepted.

The January 18th lecture will provide an introduction to microeconomics as well as an introduction to rational decision making. The lecture on January 18th will be concerned with the following questions:

1.  What are the four factors of production. Define each and give an example.

2.  What is meant by “scarcity”?

3.  What are the three questions that every society must answer?

4.  What is meant by “opportunity cost”? Give an example.

5.  What is meant by “allocative efficiency”? by “productive efficiency”? by “equity”?

6.  What is the difference between “capitalism” and “socialism”?

7.  What is the difference between a ”command economy” and a “market economy”?

8.  What are the procedures for making “rational decisions”? Explain with an example.

9.  What does “marginal” mean?

In the January 25th lecture, we will go over the Homework Assignment for Week 1.

Week #2: (January 25 to 31):

For this week, read chapters 4 and 5. You will find them on the Blackboard site under Course Documents. You will also find them on my web site. The Homework Assignment for Week 1 is due on January 25.

On February 1st, you are to turn in the Homework Assignment for Week 2. You will find it on the Blackboard site under Course Assignments. Homework assignments are worth 10 points each. Late assignments will NOT be accepted.

This week will consider the law of demand, the price elasticity of demand, and the determinants of demand. The Tuesday January 25th lecture will be concerned with the following points:

1. Defining the following terms:

Demand Law of Demand

Demand Schedule Demand Curve (and draw the curve)

Price Elasticity of Demand

Relatively Inelastic Demand Relatively Elastic Demand

Unit Elastic Demand Perfectly Inelastic Demand

Perfectly Elastic Demand Total Revenue

2. Explaining what will happen to total revenue if the price rises and demand is

relatively inelastic, (2) relatively elastic, or (3) unit elastic

3. Naming the factors that determine whether the demand for a given product will be relatively elastic or relatively inelastic.

4. Defining the following terms:

Normal Good Inferior Good Income Elasticity of Demand

Necessity Luxury Complement Substitute

Cross Elasticity of Demand Industry Shift In Demand Movement Along the Demand Curve

5. Explaining what would cause the demand curve to shift to the right. Explaining what would cause the demand curve to shift to the left. Explaining what would cause a movement along the demand curve.

On Tuesday, February 1st, we will also go over the Homework Assignment for Week 2.

Week #3: February 1 to 7:

For this week, read chapters 6 and 7. You will find them on the Blackboard site under Course Documents. You will also find them on my web site. The Homework Assignment for Week 2 is due on February 1. On February 8, you are to turn in the Homework Assignment for Week 3. You will find it on the Blackboard site under Course Assignments. Homework assignments are worth 10 points each. Late assignments will NOT be accepted.

There will be Quiz #1 given at the beginning of class on Tuesday, February 1. The quiz will be 15 multiple choice questions, worth 15 points. All you need is a sheet of paper. The Quiz will cover the material of the first two weeks ---Chapters 1,2,4,and 5. There are practice quizzes on my web site and also on the Blackboard site under External Links to use for practice. You may also use the Practice Quizzes at the end of Chapters 2,4, and 5.

This week will consider supply, equilibrium, and cases involving demand and supply. The Tuesday February 1st lecture will be concerned with the following points: (The starred items are covered in the reading but may not be covered in the lecture.)

1. Defining the Law of Supply

2. Differentiating Between the Causes of a Movement Along the Supply Curve and

a Shift in Supply

3. Defining the Price Elasticity of Supply

4. Drawing the Supply Curve (as Relatively Elastic; Relatively Inelastic; Perfectly Elastic; Perfectly Inelastic)

5. Explaining the Factors that Determine Whether the Supply of a Product is Relatively Elastic or Relatively Inelastic.

6. Naming and Explaining the Four Factors that will cause the Supply of a Given Product to Shift to the Left (or to the Right).

7. Explaining how the equilibrium price and quantity are determined.

8. Explaining what will result if the price is above (or below) equilibrium.

9. Explaining what will happen to the price and the quantity if there is an increase in demand or a decrease in demand or there is an increase in supply or a decrease in supply

10. Explaining what will happen to the price and the quantity if both demand and supply rise; if demand rises and supply falls; if both demand and supply fall: or if demand falls and supply rises*

11. Defining the “incidence” of a tax. And then explaining what determines whether the incidence of a tax is on the buyer or on the seller.

12. Analyzing the cases of the rent supplement program and of the building subsidy program using demand – supply analysis and the price elasticity of demand and supply*

13. Using demand – supply analysis as well as the price elasticity of demand and supply to explain why American farmers have faced falling prices and profits over the past century.*

In the February 1st lecture, we will go over Quiz #1 and the Homework Assignment for Week 2.

Week #4: February 8 to 14:

For this week, read chapters 8 and 9. You will find them on the Blackboard site under Course Documents. You will also find them on my web site. The Homework Assignment for Week 3 is due on February 8. On February 15, you are to turn in the Homework Assignment for Week 4. You will find it on the Blackboard site under Course Assignments. Homework assignments are worth 10 points each. Late assignments will NOT be accepted.

There will be Quiz #2 given at the beginning of class on Tuesday, February 8th. The quiz will be 10 multiple choice questions, worth 10 points. All you need is a sheet of paper. The Quiz will cover the material of Week 3 ---Chapters 6 and 7. There are practice quizzes on my web site and also on the Blackboard site under External Links to use for practice. You may also use the Practice Quizzes at the end of Chapters 6 and 7.

This week will consider price floors, price ceilings, and the Invisible Hand. The Tuesday February 8th lecture will be concerned with the following points: (The starred items are covered in the reading but may not be covered in the lecture.)

1.  Defining “price floor” and drawing it on the demand – supply graph.

2.  Analyzing what results if there are price floors.

3.  Analyzing the results of the price support program for agriculture.

4.  Analyzing the results of the acreage restriction program for agriculture.*

5.  Defining “price ceiling” and draw it on the demand – supply graph.

6.  Analyzing the results of price ceilings.

7.  Explaining how goods and services are rationed if there is a price ceiling.

8.  Defining “black market” and “gray market”.

9. Explaining what is meant by “consumer sovereignty”.

10. Explain what is meant by the “invisible hand”.

11. Analyze the results of a change in tastes on the part of consumers.

12. Analyze the results of a change in the relative scarcities of the factors of production.

13. Explain the two functions of the price in a market system.

14. Explain how the self-interest of the sellers leads to behaviors in society’s (consumers’) interest.

The Tuesday, February 8th lecture will go over Quiz #2, go over the Homework Assignment for Week 3, and review for the examination next week.

Week #5: February 15:

The Tuesday class on February 15th will be a full period examination covering the material of the first four weeks -- Chapters 1 to 9 (except 3). The examination is all written and is worth 100 points. Paper is provided. In preparing, answer all of the questions listed above. Copies of Old Examinations are available on my web site. You may use these to gauge the questions and to practice. Answers are included. Anyone missing the examination will need to consult the instructor. If a makeup in not granted, the student will receive a grade of zero. Your assignment for this week is to study for the examination and to turn in the Homework for Week 4.

Week #5: February 16 to 21:

For your work online this week, read chapter 10. You will find it on the Blackboard site under Course Documents. You will also find it on my web site. On February 22nd, you are to turn in the Homework Assignment for Week 5. You will find it on the Blackboard site under Course Assignments. Homework assignments are worth 10 points each. Late assignments will NOT be accepted.