muenster market
roadside attraction, maui
cycle rack
Econ 301
Intermediate Micro Economics
Spring 2014
B&E - D 440
Instructor: Professor Roger D. Congleton .T/Th 1:00-2:15
Office: 405 B&E
.Office Phone  3-7866

Office Hours: 2:00-3:30 Wednesday and Fridays, and most other times by appointment
Required Text: Microeconomics: Theory and Applications, E. K. Browning and M. A> Zupan, Wiley.
Optional Texts:
. Knight, F. H. Risk Uncertainty and Profit. (1985/1921) Midway Reprint edition, University of Chicago Press.

Course Description:
. Intermediate Micro is a lecture based course that focuses on the core tools of undergraduate economics. It could be thought of as a course on the geometry of economics or on implications of net-benefit maximizing choice. Although the main focus of the course is theory, applications to a wide range of choice and policy settings are used to illustrate the relevance of the tools developed in class. .

The main body of the course is divided in to four parts,(1) the the logic of net-benefit maximizing choice (2) market structure: competitive and monopolistic markets, (3) elementary game theory and (4) tradeoffs in multidimensional settings..

The goal of the course is to provide the student with a thorough understanding of the core neoclassical tools, and their ability  to illuminate a wide variety of market, public policy, and day-to-day issues. 

. Tentative Course Outline .
Dates Topic
. I. The Economics of Competitive Markets .
9-Jan-14 1. Introduction to Micro Economics
BK 1
. A Brief Look at Economic History. Models as a Method of Explanation and Prediction. Methodological Individualism: Rational Choice as a modeling device.  Microeconomics the logic of choice. (What does rational choice mean?) Normative and Positive Economics (1 lectures)


2. Demand and Supply as Consequences of Net Benefit Maximization  Rational choice as net benefit maximization.The geometry of choice. Use of marginal cost and marginal benefit curve to model consumers and firms, supply and demand, market efficiency,  (4 lectures)
BK 2, 4, 8


3. Competitive Markets as an "Ideal Type"  Assumptions for pure competitive markets. Prices as coordinating mechanisms. Supply and demand in the short and long run.  The difference between Ricadian and Marshallian Long run equilibria.The meaning of entry and exit. (2 lectures)
BK: 6, 9, 10

. 4-Feb-14 4. Applications: Policy Analysis Using Demand and Supply Curves
Markets for Inputs, Effects of Price Controls and Entry Barriers, Dead Weight Losses in the Short and Long Run. Taxes and Dead Weight Losses in the Short and Long Run. (4 lectures)
BK: 6, 9, 10

Review for Midterm Exam
Midterm Exam
Review of Midterm Exam


6.Market Structure: Monopoly and Monopolistic Competition
Why firms prefer monopolies. Cartels as escape from competition. Monopolistic competeition: competition among firms producing close but not perfect substitutes for one another, antitrust law. (3 lectures)
BK: 11, 12, 13

Spring Break No Class  (March 10-14)


7. Introduction to Game Theory and Applications
The classic prisoner's dilemma. Bertrand and Cournot Duopoly as game theory. Is a dilemma always a dilemma? Cournot duopoly, Team Production and the the principal agent problem: between owners and managers. (4 lectures)
BK: 14

8. Tradeoffs: Two Dimensional Models of Choice Deeper foundation for Demand and Supply. Utility functions, Indifference Curves and Budget Constraints.  Deriving demand curves, income and substitution effects. Production functions, Isoquants, Isocost lines, and Efficient Production. Deciding how to produce goods and services as input prices and output level change. Robbinson Crusoe alone, The Edgeworth Box. (5 lectures)

BK: 3, 4, 6.1, 7, 8
17-April-14 9. Entrepreneurship: Creative Destruction and Equilibration

. Knight, Schumpeter, Kirzner, Coase, and Smith. Alternative conceptions of the firm, markets and entrepreneurship. Prices as coordinating devices. (2 lectures). (WSJ on Innovation and Commodity Prices.)
24-April-14 13. Overview of the course and Review for the final

30-April-14 FINAL EXAM 3:00 - 5:00 PM

graph Grades:
Midterm Exam 45.00%
Final Exam 55.00%
Extra Credit from Homework
Marginal extra credit for extraordinary class participation (up to 2% bonus)