PRINCIPLES OF MICROECONOMICS

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PRINCIPLES OFMICROECONOMICS
110M ECO (1645)
KINAL BA 110 442-4744 http//www.albany.edu
/twk58/eco110.html
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TEXT
If you are planning to take only ECO 110M ,
Mankiw, Principles of Microeconomics, Dryden
Press, 1998. If you are planning to take both
ECO 110M and ECO 111M, Mankiw, Principles of
Economics, Dryden Press, 1998. Both texts come
packaged with student Workbooks. The Workbook
is strongly recommended
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GRADING
Class Exams (2) 45 Homework 20
Final Exam 35 Total 100 Final letter
grades will be determined on the basis of a
student's total numerical score for the semester,
on exams and homework, relative to the scores of
the entire class. Typically approximately 40 of
the grades are in the A and B ranges, and
approximately 45 in the C range. Exams will
cover material in the lectures and textbook.
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POLICIES
Statement of Penalties and Procedures for
Academic Dishonesty The Undergraduate Bulletin
1999-2000 contains a statement on standards of
academic integrity, lists examples of academic
dishonesty, and discusses penalties and
procedures in cases of academic dishonesty. For
this course the minimum penalty imposed on work
tainted by academic dishonesty will be that the
work will be assigned a grade of zero. In
addition, the Department Chair and the
Undergraduate Studies Committee of the
Department of Economics will be informed in
writing of the incident and the penalty imposed.
Further action may be taken at the Departmental
and/or University levels.
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POLICIES

Attendance Class attendance will be recorded,
and students with excessive absences should
expect to have their final grade reduced.
Students are expected to take all exams at the
scheduled times.
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COURSE OUTLINE
Week Beginning
Topics Chapters in Mankiw September 6 Ten
Principles, Economic Reasoning, 1,2,3 Gains
from Trade September 13 Supply and
Demand 4 September 20 Elasticity 5 Septem
ber 27 Analysis of Government Policies, 6,7 E
fficiency of Markets October 4 Efficiency of
Markets 7 EXAM I Thursday, October 7
(Chapters 1-7)
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COURSE OUTLINE
Week Beginning
Topics Chapters in Mankiw October
11 Taxation, International Trade 8,9 October
18 International Trade, Externalities 9,10 Octo
ber 25 Public Goods, Costs of Production 11,13
November 1 Costs of Production,
Competition 13,14 November 8 Competition 14
EXAM II Thursday, November 11 (Chapters 1-11,
13)
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COURSE OUTLINE
Week Beginning
Topics Chapters in Mankiw November
15 Competition, Monopoly 14,15 November
22 Monopoly 15 November 29 Oligopoly,
Monopolistic Competition 16,17 December
6 Markets for Factors of Production 18,19
FINAL EXAMINATION Friday, December 17,
1030 AM - 1230 PM
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DEFINITION
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DEFINITION
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• TRADITION

• COMMAND

• MARKET

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• ACCURACY OF PREDICTION

• SIMPLICITY OR PARSIMONY

• REALISM

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THE SCIENTIFIC METHOD
The scientific method involves constructing a
theory or model to explain observed phenomena,
and then comparing predictions of the model with
new observations.
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THE SCIENTIFIC METHOD
The scientific method involves constructing a
theory or model to explain observed phenomena,
and then comparing predictions of the model with
new observations. Coincidence between
predictions and observations tend to support the
theory -- discrepancies discredit the theory.
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TWO BASIC ASSUMPTIONS
1. SCARCITY
2. RATIONALITY
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DEFINITION
Utility is the amount of satisfaction an
individual receives from his or her
circumstances.
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INTERPERSONAL COMPARISONS
Although an individual can usually say that she
likes one alternative better or worse than
another, it is generally not possible for a
person to say that she likes any particular
alternative more than another person. Therefore
we cannot make interpersonal comparisons, i.e.,
comparisons between two or more individuals.
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DEFINITION
An allocation of resources and output is Pareto
efficient if there is no other allocation (of
resources and output) that would make at least
one member of society better off without making
anyone else worse off.
By better off we mean have more utility and
worse off means less utility.
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TEN PRINCIPLES
1. People Face Tradeoffs
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TEN PRINCIPLES
1. People Face Tradeoffs
A. Guns vs. Butter (Production Possibilities)
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TEN PRINCIPLES
1. People Face Tradeoffs
A. Guns vs. Butter (Production Possibilities)
B. Efficiency vs. Equity