Department of Economics
Microeconomics and Policy Analysis
Spring 2008 Semester
MW 3:00 – 4:15pm
Instructor: Kyle Hampton. Saunders #504 (808)956-7938 email@example.com
Office Hours: MW 1:00 – 2:30pm (or by appointment)
Course Description: Economics examines the incentives that lead us to make the decisions we do. These incentives can take many forms and can influence a wide range of behaviors like how we work, what we purchase, and with whom we trade. On a larger scale, these decisions are constrained by the scarcity of resources available to individuals and, by extension, our entire society. Microeconomics consists in looking at how all of these individual decisions combine to direct how these scarce resources are distributed.
In this course you will learn how to apply microeconomic concepts to a variety of problems and to understand how to do so in the context of policy questions. You will also be provided an introduction to the problem of various market failures and the public policy instruments that have been devised to correct for those failures. An understanding of the relations between the market economy and public policy is essential for most successful policy analysts and managers.
Prerequisite: Consent of the instructor.
Course Structure: Predominately lecture-based with in-class discussion encouraged. The structure of this discussion will depend upon the size of class, the size of the classroom, and the willingness of students to participate. Students will be asked to show some aptitude for integrating their understanding of economics in analysis of real-world policy issues.
Students will also be required to participate in hands-on experiments that demonstrate economic principles. These experiments will take place both in and out of class and students will be able to earn extra credit points through their participation.
Pindyck, Robert S. and Daniel L. Rubinfeld, Microeconomics, 6th edition, Pearson Prentice Hall, 2005.
Henry Hazlitt, Economics in One Lesson, (50th anniversary edition preferred), Fox & Wilkes, July 1996
Students will be asked to complete several problem sets over the course of the semester. Students are encouraged to work in groups as this tends to have a profound impact on the ability to synthesize and understand the material. The material covered in the problem sets will be tested on the final examination.
Economics represents a rich set of critical tools for examining the world around us. As we go through the semester, I will be drawing on current events, history, and cultural artifacts to demonstrate the power of economic science to illuminate our understanding of the world. But in order to fully grasp this power, students need to actually engage in the process.
To this end, students will be asked to create two short classroom presentations on a public policy issue using the tools of economic analysis we have studied in class. They will then be expected to lead a classroom discussion among their classmates.
Laboratory experiments have allowed students to actively participate in the market dynamics discussed during the course. This semester, you will be asked to participate in several experiments in which you will be interacting with your fellow students in simulated market environments.
Determination of Grades:
Class Presentations 30%
Final Exam 25%
Class Participation 15%
The final exam is closed book, closed notes. The final exam will be comprehensive and will include a variety of short answer and essay style questions.
Final letter grades will assigned in plus/minus format with “A+” being the highest grade possible.
Attendance is not taken in class but will be considered in determining the class participation portion of the class.
Week 1 - (January 14 - 18) – Preliminaries – Pindyck & Rubinfeld 1.1-1.3, Hazlitt I, II – [Double Auction Experiment]
Week 2 – (January 23) - Supply and Demand - Pindyck & Rubinfeld 2.1-2.5, Hazlitt XV
Week 3 – (January 28 - 30) – Demand and Consumer Surplus – Pindyck & Rubinfeld 4.4-4.5
Week 4 – (February 4 - 6) – Productivity and Costs - Pindyck & Rubinfeld 6.1-6.2, 7.1-7.2, Hazlitt VII, X
Week 5 – (February 11 - 13) – Competitive Markets - Pindyck & Rubinfeld 8.1-8.8
Week 6 – (February 20) – [Double Auction Experiment II]
Week 7 – (February 25 – 27) – Market Intervention - Pindyck & Rubinfeld 9.1-9.6, Hazlitt XI, XII, XIV, XVII, XVIII, XIX
Week 8 – (March 3 - 5) - Presentations
Week 9 – (March 10 - 12) – Monopoly - Pindyck & Rubinfeld 10.1-10.4, 10.7 [Experiment]
Week 10 – (March 17 - 19) – Oligopoly – Pindyck & Rubinfeld 12.2, 12.4-12.6
Week 11 – (March 24 - 28) - Spring Break
Week 12 – (March 31-April 4) – Game Theory - Pindyck & Rubinfeld 13.1-13.5, 13.8 [Experiment]
Week 13 – (April 7 – 9) - Presentations
Week 14 – (April 14 – 16) – Asymmetrical Information Pindyck & Rubinfeld 17.1-17.4, 17.6 [Experiment]
Week 15 – (April 21 – 23) - Presentations
Week 16 – (April 28 – 30) – Externalities and Public Goods - Pindyck & Rubinfeld 18.1-18.5 – [Experiment]
Week 17 – (May 5 – 7) Presentations
Final Exam - Friday, May 16. 2:15-4:15pm