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Course Outline and Reading Assignments

  1. Introduction
    1. Economics: What, How, and for Whom?
    2. Production Possibility Frontier
    3. Opportunity Cost
    4. Positive vs. Normative
    5. Micro vs. Macro
    6. Read: Chs. 1, 2 (All reading assignments are from the Hall & Lieberman text except as noted.)
    7. Also read: Richard Feynman's "The Relation of Science and Religion," Engineering and Science, Volume 19:9, June 1956, pp. 20-23. It is available on the web at http://calteches.library.caltech.edu/49/2/Religion.htm. The .pdf version is at http://calteches.library.caltech.edu/49/2/Religion.pdf.  
  2. Supply and Demand in One Market
    1. Price and Consumer Demand
    2. Price and Business Output
    3. Equilibrium in the Market
    4. Shifts in Demand and Supply
    5. Read: Chs. 3, 4, and pp. 378-382 in Chap. 12
  3. Demand and Consumer Choice
    1. Price Change and Demand Elasticity
    2. Substitutes and Complements
    3. Income and Demand
    4. Consumer Preferences and Utility
    5. The Budget Constraint
    6. Choosing Between Goods: Decision Making at the Margin
    7. Income and Substitution Effects
    8. Individual and Market Demand Curves
    9. Read: Chs. 5, 6 (with Appendix), and pp.437-9 in Ch. 14

** FIRST MIDTERM EXAMINATION **

  1. Production and Costs
    1. Business Goals: Profit Maximization?
    2. Accounting Costs and Opportunity Costs
    3. Inputs, Outputs, and the Production Function
    4. Minimizing Input Costs
    5. Average Cost, Marginal Cost, and Returns to Scale
    6. Short Run vs. Long Run
    7. Read: Chs. 7 (with Appendix) and pp. 221-4 in Ch.8
  2. Perfect Competition
    1. Competitive Output Supply: Short-Run
    2. Competitive Output Supply: Long-Run
    3. Supply and Demand for Labor
    4. Supply and Demand for Capital
    5. Welfare Analysis of Perfect Competition
    6. Read: Chs. 8, 9, 12, 13, 14

** SECOND MIDTERM EXAMINATION **

  1. Market Failures I: Monopoly
    1. Sources of Monopoly
    2. Monopoly Price and Output
    3. Monopoly vs. Competition
    4. Read: Ch. 10
  2. Market Failures II: Oligopoly
    1. Oligopoly Behavior: Collusion vs. Rivalry
    2. Conditions Favoring or Discouraging Collusion
    3. Entry and Entry Deterrence
    4. Monopolistic Competition
    5. Read: Ch. 11 (with Appendix)
  3. Market Failures III: Externalities, Public Goods, and Asymmetric Information
    1. Pollution and Environmental Protection
    2. Public Goods and Free Riders
    3. Adverse Selection, Moral Hazard, and the Insurance Market
    4. Read: Ch. 15
  4. International Trade
    1. Comparative Advantage
    2. Trade Policy
    3. Read: Ch. 16