A summary of Recent Changes to this site.

Text: Introduction to Economic Analysis by R. Preston McAfee. The text is available in pdf format here, or from Sabrina in Bax 111 for about $12, or from lulu.com.

See also this.

This course introduces the major topics of microeconomic analysis.

Economists use simple mathematical models to shed light on various economic phenomena. Economists have almost universally adopted the maximization paradigm as the primary tood for understanding human economic behavior. The maximization paradigm assumes people behave as if they maximize an objective function (happiness), and much of the course is devoted to applying that paradigm to various situations, starting with trade.

Given that I wrote the text, and the short length of the winter term, it is crucial that you read the text prior to class. It isn't so much reading, although the text has a bit of the "taking a sip from a firehose" problem in places.

Class meets Monday, Wednesday and Friday at 11AM. Some of the Friday meetings are recitation sections which will help you with the homework exercises. Three Fridays will also be regular class meetings and four of them involve economic experiments, in which you participate in experiments and then analyze the experimental data to see if it conforms with the theory or not.

Homework becomes available on a Friday, and is due the following Friday.

Handouts are in pdf format. The Foxit reader is free and much faster than Acrobat.

Martin Osborne's fine mathematical tutorial.

Assessment
Midterm:	30%	Practice Midterm, 2005, 2006 W Midterm, 2006 S Midterm
Eight problem sets:	40%	Includes experiment analysis; assistance in recitation
		2005 Homework with answers
Final:	30%	2005 Final, 2006 W Final, 2006 S Final

For pass-fail students, a passing grade is a D or better, which is an average of 60 or more after the curve.

It is permitted (encouraged) to work together in groups, of no more than three individuals, on homeworks, but not on the midterm and final. Groups may submit a single homework solution.

Schedule
Dates are tentative; check back frequently. You should read the listed sections prior to the class.
Date	Book Section	Topic
Jan 3	1.1	What is Economics?
Major points:		Types of reasoning, models, and goals
Lecture:		Introduction
Jan 5		Supply & Demand Experiment
Lecture:		Overheads
Data		Data Source
Exercises:		Homework 1
Jan 8	2.1-3	Supply and Demand
Major points:		Demand, marginal value, consumer surplus, supply, marginal cost, profit, shifts in curves
Lecture:		Supply and Demand
Jan 10	2.4-5	Elasticities
Major points:		Quantifying effects
Lecture:		Supply and Demand
Jan 12	2.6, 3	International Trade & the US Economy (OK to skim ch 3)
Major points:		Production possibilities, comparative and absolute advantage, factors and trade
Lecture:		Trade
Fedstat		Federal Statistics Website
Exercises:		Homework 1 due today
Answers:		Homework 1 Answers
Exercises:		Homework 2
Jan 15		Martin Luther King Day Holiday
Jan 17	4.2	Competitive Dynamics
Major points:		Perfect competition dynamics
Lecture:		Perfect Competition
Jan 19		Entry Experiment
Lecture:		Overheads
Exercises:		Homework 2 due today
Answers:		Homework 2 Answers
Data		Data Source
Exercises:		Homework 3
Jan 22	4.1	Competitive Firm
Lecture:		Perfect Competition
Major points:		Types of firms, production functions, profit maximization, costs, economies of scale
Jan 24	4.3	Investment
Major points:		Present value, NPV rule for investment, investment under uncertainty
Lecture:		Investment
Jan 26	4.3	Investment Applications
Major points:		Resource extraction, tree-cutting
Lecture:		Investment
Exercises:		Homework 3 due today
Answers:		Homework 3 Answers
Exercises:		Homework 4
Jan 29	5.1-2	Consumer Theory
Major points:		Utility maximization, substitution and income effects, backward-bending labor supply
Lecture:		Consumer Theory
Jan 31	5.2	Consumer Theory Topics
Major points:		Dynamic choice, risk, search
Lecture:		Consumer Theory
		Midterm
Feb 2		Midterm Examination Available
Feb 7		Midterm Examination due today 4PM
Answers:		Midterm answers
Feb 2		Recitation Section
Exercises:		Homework 4 due today
Answers:		Homework 4 Answers
Feb 5	6.1-2	Interventions
Major points:		Taxes, elasticities, price floors and ceilings, quotas
Lecture:		Interventions
Feb 7	6.3	Externalities
Major points:		External effects, Pigouvian taxes, tradable permits, fishing and extinction
Lecture:		Externalities
Feb 9		Prohibition Experiment
Lecture:		Overheads
Data		Data Source
Exercises:		Homework 5
Feb 12	6.4	Public Goods
Major points:		Public goods, free-riding, local public goods
Lecture:		Externalities
Feb 14	6.5	Monopoly
Major points:		Basic model, taxation, price discrimination
Lecture:		Monopoly
Feb 16		Recitation Section
Exercises:		Homework 6
Exercises:		Homework 5 due today
Answers:		Homework 5 Answers
Feb 19		President's Day Holiday
Feb 21	6.6	Information
Major points:		Market for lemons, Myerson-Satterthwaite, Signaling
Lecture:		Information
Feb 23		Regulating Externalities Experiment
Lecture:		Overheads
Data		Data Source
Exercises:		Homework 7   ALL HOMEWORK DUE BY MARCH 9, NO EXTENSION BEYOND
Exercises:		Homework 6 due today
Answers:		Homework 6 Answers
Feb 26	7.1	Game Theory
Major points:		Matrix games, equilibrium, mixed strategies, subgame perfection, supergames, folk theorem
Lecture:		Game Theory
Feb 28	7.2-3	Game Theory finished, Imperfect Competition started
Major points:		Cournot, price dispersion
Lecture:		Oligopoly
Mar 2	7.4-5	Imperfect Competition Continued
Major points:		Hotelling, agency theory
Lecture:		Oligopoly
Exercises:		Homework 7 due today
Answers:		Homework 7 Answers
Exercises:		Homework 8   ALL HOMEWORK DUE BY MAR 9, NO EXTENSION BEYOND
Mar 5	7.7	Antitrust
Major points:		Laws, price-fixing, mergers
Lecture:		Antitrust
Mar7	7.6	Auctions
Major points:		English, Sealed-bid auctions, revenue equivalence, information release
Lecture:		Auctions
Mar 9		Recitation Section
Powerpoint:		Handout
Exercises:		Homework 8 due today
Answers:		Homework 8 Answers ALL HOMEWORK DUE BY TODAY, NO EXTENSION BEYOND
		Final
MAR 9		Final is available starting today
Mar 14		Final Examination due today at 4PM; turn in to Sabrina Baxter 111
Answers:		Final

Changes to this website since Jan 1, 2007

• Mar 9: Recitation Handout
• Mar 6: Final available Friday, requires 4 consecutive hours. Class website materials, notes, book, calculator, mathematica are permitted for use. Please do not use general web searches.
• Feb 26: Homework 7 slightly clarified, experiment 4 slides clarified, answers to 5 and 6 posted.
• Feb 23: Experiment 4 data posted
• Feb 21: TA office hours Baxter 127 from 8-9:30 on Thursdays.
• Feb 14: Experiment 3.4 should read 3.3
• Feb 12: If the grades were based on the current average scores, I would be adding between 5 to 7 points to them. Thus, a 75 average would turn into around 81. This may change, of course.
• Feb 9: Experiment 3 data posted
• Feb 9: Minor modification of exam answers
• Feb 8: Exam answers posted
• Feb 5: Typo correction in Homework 4 answers.
• Feb 3: To students requesting a homework extension: One 3 day extension is automatic, but of course don't look at the answers on the website and note on the assignment that you are requesting the one-time automatic extension.
• Feb 3: Answers to homework 4 posted.
• Feb 2: Midterm is available, due Feb 7 4PM. It is a timed, 4 consecutive hour takehome. No collaboration. Use of class website, book, your notes and computer programs are permitted. Note that solutions may not be integers and decimal approximations are not necessary (e.g. is an acceptable answer).
• Jan 28: The midterm dates are postponed by one day, and now span the period Feb 2-7
• Jan 24: Homework 3 Prob 2 not required (haven't yet covered material)
• Jan 11: Error in the CS calculation on the overheads, fixed on handout
• Jan 7: Experiment 1 data posted.
• Jan 3: Introductory handout modified
• Jan 3: Books not available from bookstore, but from Sabrina
• Jan 2: Homeworks 1-4 are up.