316-102

Introductory Microeconomics

SUBJECT GUIDE

Semester 2, 2009

Prepared by

Gareth James

Department of Economics

Faculty of Economics and Commerce


Contents

A. Introduction………………………………………………………3

B. Subject objectives……………… .…………………………...... 3

C. Academic contact details………..………………………………..4

D. Lecture and tutorial times……….……..………………...... 4

E. Assessment details………………………………………...... 5

F. Lecture program and readings………..…………………………...7

G. About lectures………………………….…………………………9

H. About tutorials………………..…………………………………...9

I. Subject resources……………..…………………………………...10

J. How to study..…………………………………..…………………14

K. Plagiarism...…………………………………………………….…14

A. Introduction

Welcome to Introductory Microeconomics. We hope you will find the subject enjoyable and stimulating, and that you feel you are learning valuable new knowledge and skills. The focus of the subject is on applying a number of fundamental concepts and theories of microeconomics to understanding and making predictions about economic situations. You will learn how to apply these concepts and theories to real world problems through examples given in lectures, tutorial exercises, case studies, assignments and review questions. We will provide you with many learning resources, and opportunities for testing and clarifying your knowledge. This will develop your knowledge of microeconomics as well as your skills in analysis, problem-solving, decision making, and written and oral communication. We are sure you will find that knowing and being able to apply these concepts and theories can assist you greatly - in your future studies, the decisions you are likely to have to make in a job in business or government; or in making sense of the world as a day-to-day observer of economic and business events.

B. Subject objectives

Students who complete this subject will be able to:

• Describe the main objectives of the study of economics - to seek to understand the operation of the economy, and to guide decision-making by individuals, businesses and government.

• Explain the nature and role of theory and models in economic analysis.

• Explain the concepts of demand, supply, and market equilibrium; and apply the model of demand and supply in a market to explain the determinants of prices and output of goods and services.

• Explain how market and social welfare outcomes are affected by changes in demand/supply and government policy, and explain how and in what circumstances intervention by government in the operation of the economy can improve efficiency and social welfare.

• Explain models of firm behaviour in choosing output, price, and how to produce.

• Identify ‘strategic situations’ in economic activity, and be able to analyse and predict outcomes of strategic situations.

• Identify the main characteristics of different market types such as perfectly competitive and monopoly markets. Describe the nature of competitive behaviour in those markets, analyzing and predicting price and output outcomes in the different markets.

• Use examples to illustrate key concepts – such as the role of demand and supply factors in determining market outcomes, the effects of government intervention on market outcomes, the existence of strategic situations in the economy, and different types of markets.

• Apply economic models of individual behaviour and markets to describe the main features of actual markets, and to explain outcomes in actual markets, including prices and output levels, and business performance and profitability.

• Evaluate and critically analyse government policy, and make an informed contribution to public debate on economic issues.

• Proceed to the study of other economics and commerce subjects that have a knowledge of introductory microeconomics as a prerequisite.

C. Academic contact details

Lecturer:

Gareth James

Economics and Commerce Building

Rm. 411

Phone: 90358045

Email:

Office hours: TBA

Tutorial coordinator:

David Christie

Economics and Commerce Building

Rm. 603

Phone: 8344-5410

Email:

D. Lecture and tutorial times

Lectures – 2 x 1 hour each week –

Students will be allocated to one of two lecture streams:

  1. Tuesday and Thursday - 11.00 am – Richard Berry, J H Michell Theatre.
  2. Tuesday and Thursday - 4.15 pm – David Caro – Laby Theatre.

Tutorials – 1 x 1 hour each week (Timetable via Alloc8 – See section H for details.) Begin in Week 2 – from Monday 2/7/09.


E. Assessment details

Assessment overview

Assessment Task / Individual or Group / Hard copy or Electronic / Due / Assessment Weighting
Multiple choice question exam / Individual / Electronic / 12.00 pm 19/8/09 to 12.00 pm 21/8/09 / 5%
Assignment 1 / Individual / Electronic / 4.00 pm, 14/9/09 / 10%
Assignment 2 / Individual / Electronic / 4.00 pm, 12/10/09 / 15%
Tutorial participation / Individual / 10%
End-of semester exam / Individual / Hardcopy / Exam period:
9/11/09 to 27/11/09 / 60%

Multiple choice question exam (5%)

The multiple-choice exam will be conducted on-line through the ‘FAT’ program that can be accessed via ‘TLU Tools’ on the LMS subject webpage. There will be 10 multiple-choice questions (each worth equal marks). You will have 30 minutes to complete the exam. Each student will receive a different set of questions randomly chosen from a much larger set of questions. A number of practice multiple choice question tests will be posted to the LMS subject website under the ‘FAT’ program. The exam will cover sections A and B of the course [see lecture program]. Extra pit-stop tutorials will be scheduled in weeks 3 and 4 prior to the exam.

Assignment 1 – 1000 words (10%)

In this assignment you will be required to use economic concepts to answer questions on material that relates to the sections B and C of the subject. There will be extra pit-stop tutorials scheduled before this assignment is due. As well, if you have questions about completing this assignment, the ‘On-line Tutor’ is also available. The assignment topic will be posted to the LMS subject website under ‘Assessment’ at the beginning of the semester.

Assignment 2 – 1500 words (15%)

In this assignment you will be required to use economic concepts to answer questions on material that relates to section D of the subject, and also complete a ‘case study’ exercise. There will be extra pit-stop tutorials at the time this assignment is due, and the ‘On-line Tutor’ will also be available for questions. Assignment 2 will be posted to the LMS subject website later in the semester.

Tutorial participation and attendance (10%)

At the end of semester your tutor will assign you a mark out of 10 for tutorial participation. Your grade for participation will depend on: evidence of preparation for the tutorial; frequency of participation in discussion; relevance and logic of comments in discussion; and evidence of active listening to other students’ contributions. If you have attended at least 7 tutorials during the semester your final mark for this exercise will be equal to the tutor’s original mark. If you have attended less than 7 tutorials during the semester your final mark for this exercise will be equal to the tutor’s original mark minus 1 for each tutorial less than 7 that you attended.

(For example, suppose your tutor gives you 8/10, and that you attended 10 tutorials. Then your final mark is 8. Alternatively, suppose your tutor gives you 8/10, but you only attended 3 tutorials. Then your final mark is 4. That is, you lose 4 marks because you missed 4 tutorials under the threshold of 7, and each of these missed tutorials reduces the mark by 1.) Note that to receive a mark for tutorial participation/attendance, you must have a valid tutorial enrolment.

Final examination (60%)

The exam will be held in the period between 9/11/09 to 27/11/09. The duration of the exam will be two hours with an additional 15 minutes reading time. The exam will involve a mix of multiple choice questions, short answers, and essay type questions. A number of past exam papers and solutions will be posted to the LMS subject website under ‘Exams’ later in the semester. More details about the exact format of the exam will be provided later in the semester.

Submitting Assignments 1 and 2

Assignments 1 and 2 are to be submitted in electronic format using the Assignment Tool. You can access the Assignment Tool by clicking on ‘Assignment Tool’ in the navigation menu from the LMS subject website. A guide to using the Assignment Tool can be downloaded from:

http://tlu.ecom.unimelb.edu.au/pdfs/StudentsGuideAssignmentTool.pdf

Please note that you are required to keep a copy of your assignment after it has been submitted, as it may be necessary for you to be able to provide a copy of your assignment at some later date.

Meeting Deadlines

It is very important that you submit Assignments 1 and 2 by the specified times on the due dates. After that time there will be a penalty for late submission. To request an extension for an assignment, you will need to submit an ‘Assignment Extension Request Form’. The form must be submitted at Economics and Commerce Undergraduate Student Centre (Level 1, 198 Berkeley Street). Information on requesting an extension is available at: http://www.ecom.unimelb.edu.au/students/undergrad/assignment.html

Late assignments, where approval for late submission has not been given, will be penalised at the rate of 10% of the total mark per day, for up to 10 days, at which time a mark of zero will be given.

Special Consideration

If you wish to apply for Special Consideration in relation to any component of assessment in this subject you will need to lodge an application online with the Economics and Commerce Undergraduate Student Centre. Application for Special Consideration in relation to a component of assessment must be lodged within 3 working days of the date that component of assessment was due to be submitted/performed. Information on the process for applying for Special Consideration, and on the material you will need to submit is available at: http://www.ecom.unimelb.edu.au/students/special/

F. Lecture Program and Readings

Lecture / Date / Topic /

Reading

Textbook (GKM)

A.  Introduction

1 / July 28 / Subject overview / Chapters 1 and 2
2 / July 30 / Introduction to key concepts in microeconomics / Chapters 1and 2
Reading hand-out 1
B.  The working of competitive markets
3 / August 4 / Market forces of supply and demand 1 / Chapter 4
4 / August 6 / Market forces of supply and demand 2 / Chapter 4
5 / August 11 / Elasticity and its applications / Chapter 5
6 / August 13 / Supply, demand and government intervention / Chapter 6
7 / August 18 / Review of competitive markets / Chapter 4 to 6
C.  Welfare and markets
8 / August 20 /

Welfare and markets

/ Chapter 7
Reading hand-out 2
9 / August 25 / Welfare application 1: Government intervention / Chapter 8
10 / August 27 / Welfare application 2: International trade / Chapter 9
11 / September 1 / Market failure 1: Externalities / Chapter 10
12 / September 3 / Market failure 2: Public goods / Chapter 11

D.  The firm and markets

13 / September 8 /

Key concepts of production

/ Chapter 13
14 / September 10 /

Costs of production 1: short run analysis

/ Chapter 13
15 / September 15 / Costs of production 2: long run analysis / Chapter 13
Reading Handout 3
16 / September 17 / Firms in competitive markets 1 / Chapter 14
September 21 / Semester Break
17 / October 6 / Firms in competitive markets 2 / Chapter 14
18 / October 8 / Monopoly / Chapter 15
19 / October 13 /

Monopolistic competition

/ Chapter 18
20 / October 15 /

Price discrimination

/ Chapter 15
E.  Game theory
21 / October 20 / Introduction to oligopoly and game theory / Chapter 16
22 / October 22 / Game theory: Simultaneous games / Chapter 16
Reading hand-out 4
23 / October 27 / Game theory: Sequential games / Reading hand-out 4
24 / October 29 / Exam review

G. About lectures

Students are expected to attend all lectures during the semester. The power point notes for each lecture will be available on the subject webpage before the respective lecture. It would be useful if students download and read these notes in advance of the lecture. During the lecture modifications and additional comments will be made to the lecture notes. The lecture notes are to be considered a complement to, not a substitute for, attendance at lectures. Case study material may also be made available for particular lectures.

H. About tutorials

A week before your tutorial a set of tutorial tasks will be made available on the website. Students will need to download these tutorial tasks before the relevant tutorial. Generally these tasks will be problem-type questions and cover material of the previous week’s lecture. Your tutor will break you up into small groups and you will be expected to attempt to try to work out solutions to the tasks. Your tutor will provide assistance to groups in working through the tasks and will ask the groups to take turns in presenting their suggested solutions. Solutions to the tutorial tasks will not be available on the website, so it is important students attend all tutorials.

Tutorial enrolment information

Alloc8 is the University’s online tutorial allocation system. Alloc8 does not require you to lodge preferences, but primarily allocates classes based on a best fit model taking into consideration the times of your lectures and tutorials. Alloc8 will provide you with a clash free timetable (unless this is impossible) that you can then amend if there are available alternatives. More information about Alloc8, and a link to the login page, can be found on the Faculty’s website: http://www.ecom.unimelb.edu.au/students/undergrad/alloc.html

You can access Alloc8 from the above site. Click on the link to login to Alloc8 and from there you will be prompted with instructions about how to proceed. You will need to enter your Student Identification number and PIN in the appropriate fields. If you are unsure of your PIN, click on the link to the Help Page for more information. Once you have viewed your timetable you can make changes to it by following the instructions given. Please note that you will only be able to change your allocated time if there are available alternatives.

In order to assist in the assessment of your participation in tutorials and in the accurate recording of all assessment marks, you must not transfer from one tutorial to another without official authorisation. Up until ….. official authorisation is through the use of the Alloc8 system. If you have any queries regarding your tutorial enrolment prior to …. you should contact the Economics and Commerce Undergraduate Student Centre (Level 1, 198 Berkeley Street). After …. you may only transfer from one tutorial to another if you have received official authorisation from the Tutorial coordinator.