Description of Economics:

People generally agree on what kind of social phenomena are related to economics:  trade, taxation, rise and fall of stock markets, changes in prices and wages, growth in quantities and varieties of goods, wealth and poverty of individuals and of nations, … But how and why these phenomena occur are not always easy to explain, and when people are faced with issues that affect their economic lives – whether it is a personal decision or a public policy – controversy often arises.

Economic analysis tries to explain economic phenomena in a coherent way, by tracing them back to two basic elements: economic decisions and economic institutions. An economic decision-maker may be a person, a family, a firm, or a government acting on behalf of the public. To understand economics, we must first of all have a theory about how economic decisions are made. Secondly, we must identify the kinds of decisions that we have to make, and the effects of our decisions. These are defined by our natural environment and, equally significantly, also by the economic institutions under which we live and act.

The most prevalent economic institution is the market. There are markets for almost every kind of good, service, and asset. There are even markets for risks. Market is the setting in which most decisions regarding consumption, production, exchange, and investment are made. Much of this course is devoted to the understanding of markets: how markets are organized, how participants in a market behave, how allocation of resources is determined by the market, and its effect upon the welfare of the participants. 

Government is also an important economic institution. It protects property rights, regulates competition, coordinates economic activities through monetary and other policies, levies taxes and provides public services. The economic role of government is an important lesson of micro-economics; combined with the understanding of the market, it gives us deep insights into the world in which we live.

Course Description:

This course offers the tools for economic analysis of the price and distribution theory, supply and demand functions, theory of relative prices, consumer and enterprise behavior, market structures through the competitive range, income distribution and production. 

• Students will gain a better understanding of economics and the economy. 

• Students are responsible for understanding the economics of the firm and resource allocation. 

• Students will have a better understanding of the current economic problems facing our economy. 

• Students will acquire an understanding of the government and the antitrust regulations it has established. 

• Students will gain a better understanding of the behavior of profit-maximizing firms and the production process. 

• Students are responsible for an understanding of international economics and the current issues.

The nature of this course is analytic rather than factual. Although not much formal mathematics will be used, and our discussion is always illustrated by real-life examples, its objective is to help you cultivate clear, rigorous, logical thinking about economic issues.  You must be ready to rise to this challenge.

Assessment

Grading Weights: Homework/In-class Assignments: 15% of final grade; Exams: 60% of final grade Articles: 25% of final grade.

Attendance: Your attendance in class is needed by the class. It is understandable that conflicts exist. Prior notification of absence is appreciated. It is expected that students arrive on time and stay for the entire class. If arriving late, please minimize disruption, if leaving early please sit near the door.  No credit is given for attendance or class participation, but your attendance and participation will be considered at the end of the course if your overall average is in the upper range (borderline) of a specific grade.

Exams: There will be 2 midterm exams and a final exam. The midterm and final examinations are intended to test your conceptual understanding of the course material, its application in real-world settings, your analytical skills,  as well as your computational skills. Typically, the questions are drawn from current events and have a wide variety of applications of the relevant material. The first exam will concentrate on the material presented through class 20 of the course schedule and is scheduled for October 26, 2005. The second midterm exam will deal with material presented through class31 and is scheduled for November 21, 2005. Both midterm exams will account for 40% of your total course grade. The final exam will be cumulative. The final exam will account for 20% of your total course grade. 
Finally, if you miss a midterm or final exam for any reason (including illness) without notifying me in advance you will receive a zero. After-the-fact explanations will not be accepted. Absolutely NO MAKE-UP exams will be given. If you miss a midterm exam (for an acceptable reason), the final will count for the missed weight.

Reading and Assignments:  Students are expected to come to class having read/reviewed the suggested materials for that class and to be ready to participate in class discussions. Problem sets will be assigned throughout the course to illustrate and reinforce the concepts presented in class. 

Daily Reading: Daily reading of Businessweek, The Wall Street Journal or some other reputable business journal/magazine is highly recommended. You may be able to access internet-editions of Businessweek, The Wall Street Journal and other newspapers, free of charge, by logging on to the school library. As an example. from the library homepage click on "Database" then “Electronic Journals” then then letter “W” for Wall Street. If you have problems, please contact the library staff.  You will be required to complete Article Summaries.  The articles must come from the most recent BusinessWeek Magazine.  You find some articles on the internet or you can purchase a $20, 15-week subscription.  However, if you choose to use the internet addition, the articles MUST BE FROM THE LATEST EDITION.  

Math: Graphs, formulas, percentages, numerical examples, basic algebra, basic calculus, etc, are important elements of economics. The point of the mathematics is to clarify rather than muddy the economics, so please let me know if you are having mathematical difficulties.

Homework and in-class assignments: You will benefit from working the graded problems. Students who (through persistence) catch on to the problems tend to do better on exams and exhibit a higher level of understanding. These assignments are important since they will constitute the starting point for classroom discussion. If homework is not turned in within the first 1 minute of class it will not be taken.

1. There will be regular homework problems (6 will be randomly collected).
2. You may work together on homework; each student should participate fully.
3. Each student must hand in his or her own assignment (written or typed by their self).
4. Two copies of the homework are required: one that is turned in and the other the student keeps at her/his  seat as the homework is discussed in class.
5. Homework is due in class on the date designated in reading assignments.
6. Late homework is unacceptable (if you are sick send it in with a classmate).
7. Homework exhibiting honest effort & received on time receives credit as follows:

Writing assignments will be made during the term. All writing assignments must be typed using a PC word processor (double-spaced) with one-inch margins. Note, these assignments will not be accepted and will receive a zero if they are not stapled together.  

Article Summaries: You will have to select an article from the selection of Articles associated with the material being covered at the time the summary is due.  Your group will be required to make a brief (outlined) presentation of one article (5-10 is more than enough time).  The summary and presentation should be based on the provided outline.  There will be a total of 9 assignments, the last 7 will be collected (see schedule below):

• For the first 3, I will select an article each week for you to read.  You will have to determine whether the article is a normative or positive analysis and identify the normative or positive statement of the article.  Note, a normative analysis can have positive statements, you need to identify only the normative statement.  
• for the second 3,  you will select a macroeconomics article, determine which type of analysis (normative or positive), identify the statement, and identify at least 4 points the author employs to buttress the statement.  The articles must be directly related to macroeconomics (inflation, employment, growth).
• for the final 3, along with the above tasks, graphically and verbally explain the article using macroeconomics vocabulary and graphs.  Also note whether you agree or disagree with the authors position, not the various facts in the article, based on what you have learned in the class.  I will randomly select students to present the their articles during these weeks.  

You will be evaluated based on the inclusion of following: Summary Completeness (not length) (20 points); Whether or not you agree (or disagree) with the article and why (20 points); Merits or strengths of the article (evaluate the merits) (20 points); relate article to most recent class discussion (20 points); and presentation to class (20 points). 

TEXTS AND READING MATERIALS:
There are many fine textbooks that you could use as a learning resource for the class. The Department Selected Textbook is by Karl E. Case and Ray C. Fair, Principles of Microeconomics, 7th edition, Upper Saddle River: New Jersey, Prentice Hall, Inc. 2004.  I do strongly recommend that you purchase some textbook. Several web sites may be utilized to purchase textbooks at a discount (amazon.com, ecampus.com, and half.com). 

ASSESSMENT:

Course Outline:

Reading to directly support class learning: Thinking of majoring in economics, business, or accounting? Are you interested in economics issues? Monitoring the following media sources will surely improve your understanding of economics in everyday life and it will keep you up to date on current events. If you are a prospective major or are otherwise interested, try to follow several of these sources on a weekly basis:

Radio                                                                    Television
Morning Edition , 6:00am-8:00am, M-F                 McNeil NewsHour, PBS, 6:00-7:00pm, M-F
All Things Considered , 4:00pm-6:00pm, M-F       Wallstreet Week, PBS, 8:30-9:00pm, Fridays
Marketplace , 6:00pm-6:30pm, M-F                      The Nightly Business Report, PBS, 7:00-8:00pm, M-F

Magazines                                                            Newspapers
The Investor's Business Daily                                 NY Times
The Economist                                                      Wall Street Journal
Business Week                                                     The Financial Times
The New Republic
U.S. News and World Report

Books
The following is a list of good "popular" economics books that are accessible to a Principles student.
Hard Heads and Soft Hearts by Alan Blinder
Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life by Avinash Dixit and Barry Nalebuff
Peddling Prosperity by Paul Krugman
Capitalism and Freedom by Milton Friedman
21st Century Capitalism by Robert Heilbroner
How the West Grew Rich by Nathan Rosenberg and L. E. Birdzell, Jr.
The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us by Robert Frank and Philip Cook
The Age of Diminished Expectations by Paul Krugman