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Please Note: This Class Syllabus is an important step in updating the format of our distance courses. If for any reason the Class Syllabus
does not match the print Course Guide or online course information, the Class Syllabus shall be taken as correct.
CLASS SYLLABUS
COURSE TITLE:
Price Theory and Resource Allocation (Microeconomics)
COURSE CODE:
ECON 111.3
TERM :
Spring/Summer 2015
COURSE CREDITS:
3
DELIVERY:
Independent Studies
COURSE SECTION:
X01
START DATE:
May 6, 2015
END DATE:
August 11, 2015
Course Description
The course shows the student how to understand the individual consumption and production
decisions, which are made within a market economy, guided by prices and costs. Economic
concepts of supply, demand, cost, response to price changes, production, equilibrium and
income distribution are analyzed.
Course Objectives
By the end of this course, students should be able to:
1.
2.
3.
4.
5.
6.
7.
Relate scarcity to the concepts of choice and opportunity cost.
Depict the role of comparative advantage in specialization and trade.
Analyze real world examples with demand and supply model.
Outline the role of prices in allocating goods, services and factors of production.
Interpret the concept of elasticity.
Contrast the economic behavior of individual firms in the short run and long run.
Illustrate how prices and output are determined in various market structures (perfect
competition, monopoly and imperfect competition).
8. Summarize the implications for economic efficiency under different market structures.
9. Evaluate alternative strategies to improve outcomes of market failure.
10. Illustrate how factor prices are determined in the markets for factor of production.
Course Overview
Microeconomics is the study of how people make choices under the condition of scarcity.
Scarcity forces people to make choices. Economists believe that people, given the information
available to them, generally make the best of their resources. The course shows the student
how to understand the individual consumption and production decisions, which are made within
a market economy, guided by prices and costs. The core principles of opportunity cost,
March 23, 2015 gm ck wd pk
ECON 111.3 – Price Theory and Resource Allocation (Microeconomics)
substitution, and choice and the power of the market to enable people to specialize and gain
from trade will be emphasized.
Your Instructor
Wendy Doell
Contact Information
My preferred method of contact is via email at [email protected]
Students will be contacted through PAWS by email. Please check your email regularly.
Your email will be answered within 24 hours during the week. It will take 24 – 48 hours on
weekends. If I am going to be away, I will let you know ahead of time by email.
Office Hours
Office Hours: Thursdays 7 - 9 p.m. by phone at (306) 717-6202.
Profile
I am a sessional lecturer in the Department of Economics. I have been teaching introductory
economics, finance and business statistics for a number of years.
Required Resources
Readings/Textbooks
Mankiw et al. (2014). Principles of Microeconomics, 6th Canadian edition. Toronto: Nelson
Education. ISBN: 978-0-17-653086-0.
Textbooks are available from the University of Saskatchewan Bookstore:
http://www.usask.ca/consumer_services/bookstore/textbooks
Recommended Resources (optional)
Mankiw et al. (2014). Study Guide for Principles of Microeconomics, Sixth Canadian Edition.
Toronto: Nelson Education Ltd. ISBN-13: 9780176560621
Downloads
Some downloads may require Adobe Reader. To install this software, click this link and follow
the download and installation instructions: http://get.adobe.com/reader
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ECON 111.3 – Price Theory and Resource Allocation (Microeconomics)
Class Schedule
Week/Date
Module
Readings
1/ May 6
Module 1 Introduction
to Economics
Textbook Chapter 1
2/ May 13
Module 2 Thinking Like
an Economist
Textbook Chapter 2 and Chapter 2
Appendix on Graphs
Module 3
Interdependence and
Gains from Trade
Chapter 3
Module 4 The Market
Forces of Demand and
Supply
Chapter 4
Module 5 Elasticity and
Its Application
Chapter 5
4/ May 27
Module 6 Supply,
Demand, and
Government Policies
Chapter 6
May 28-29
Break
3/ May 20
Evaluation Due
Dates
Assignment 1
Due: May 22
By midnight
No Evaluations
Module 7 Consumers,
Producers, and the
Efficiency of Markets
Chapter 7
Module 8 Application:
The Costs of Taxation
Chapter 8
5/ June 3
Module 9 Application:
International Trade
Chapter 9
6/ June 10
Module 10 Externalities
Chapter 10
7/ June 17
Module 11 The Costs
of Production
Chapter 13
June 22-24
Break
8/ June 25
Module 12 Firms in
Competitive Markets
Chapter 14
9/ July 1
Module 13 Monopoly
Chapter 15
10/ July 8
Module 14 Monopolistic
Competition
Chapter 16
Assignment 2
Due: June 5
By midnight
Assignment 3
Due: June 26
By midnight
No Evaluations
Assignment 4
Due: July 10
By midnight
Page 3 of 10
ECON 111.3 – Price Theory and Resource Allocation (Microeconomics)
Week/Date
Module
Readings
11/ July 15
Module 15 Oligopoly
Chapter 17
July 17-20
Break
12/ July 22
Module 16 The
Markets for the
Factors of Production
Evaluation Due
Dates
No Evaluations
Chapter 18
Assignment 5
Due: July 31
By midnight
August 14, 2015
(9:00 a.m.)
FINAL EXAM
Note: If for any reason the Class Outline Reading List does not match the Module Reading List,
the Class Outline shall be taken as correct.
Grading Scheme
Assignment 1
10%
Assignment 2
10%
Assignment 3
10%
Assignment 4
10%
Assignment 5
10%
Final Exam
50%
Total
100%
Information on literal descriptors for grading at the University of Saskatchewan can be found at:
http://students.usask.ca/current/academics/grades/grading-system.php
Please note: There are different literal descriptors for undergraduate and graduate students.
More information on the Academic Courses Policy on course delivery, examinations and
assessment of student learning can be found at: http://policies.usask.ca/policies/academicaffairs/academic-courses.php
The University of Saskatchewan Learning Charter is intended to define aspirations about the
learning experience that the University aims to provide, and the roles to be played in realizing
these aspirations by students, instructors and the institution. A copy of the Learning Charter can
be found at: http://policies.usask.ca/documents/LearningCharter.pdf
Evaluation Components
There are five assignments and one final exam in this class.
Assignment 1
Value:
Due Date:
Purpose:
10% of final grade
May 22, 2015
This assignment is based on the material in modules 1, 2 and 3.
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ECON 111.3 – Price Theory and Resource Allocation (Microeconomics)
Description: The assignment consists of 30 multiple choice questions (30 marks) and 4
problems (20 marks).
Format for Assignments:
1. Key / type your assignment and save your file as “.doc” or “.docx” (not pdf).
2. Name your Word document as ECON 111.3 (X01) Assignment # ___ Your Name.
3. For the multiple choice questions, key 1. A, 2. B, 3. C and so on.
4. Scan or take a picture of graphs and submit them separately.
5. For information about submitting assignments electronically, go to
http://www.usask.ca/its/courses/coursetools/stuAssignments/student_assignments.swf
or
http://library.blackboard.com/ref/cfe7cf10-620a-43d2-ba13-7ac99b3cd1d2/index.htm
6. Please note that the instructor prefers that Assignments be submitted electronically
using the Assignments tool in the Blackboard Learning Management system. Submitting
electronically will enable the instructor to provide you with the quickest feedback.
However, you may use other options listed in the Submitting Assignments section later in
this Course Syllabus.
7. Follow these steps for each of the Assignments.
Assignment 2
Value:
10% of final grade
Due Date:
June 5, 2015
Purpose:
This assignment is based on the material in modules 4, 5 and 6.
Description: The assignment consists of 30 multiple choice questions (30 marks) and 4
problems (20 marks).
Assignment 3
Value:
10% of final grade
Due Date:
June 26, 2015
Purpose:
This assignment is based on the material in modules 7, 8, 9 and 10.
Description: The assignment consists of 30 multiple choice questions (30 marks) and 4
problems (20 marks).
Assignment 4
Value:
10% of final grade
Due Date:
July 10, 2015
Purpose:
This assignment is based on the material in modules 11, 12 and 13.
Description: The assignment consists of 30 multiple choice questions (30 marks) and 4
problems (20 marks).
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ECON 111.3 – Price Theory and Resource Allocation (Microeconomics)
Assignment 5
Value:
10% of final grade
Due Date:
July 31, 2015
Purpose:
This assignment is based on the material in modules 14, 15 and 16.
Description: The assignment consists of 30 multiple choice questions (30 marks) and 4
problems (20 marks).
Final Examination
Value:
50% of final grade
Date:
See Class Schedule
Purpose:
A comprehensive examination on all of the material covered in all 16 modules.
The best preparation for the exam consists of reviewing the content of each module. If you
comfortably can perform the Learning Objectives, explain the Key Concepts, and complete the
Self-Study Exercises, you should do well on the final examination.
Description: An invigilated, closed-book, three-hour examination. You are allowed to bring a
paper dictionary and a simple calculator with no programs or memories. No electronic devices
are allowed such as a cell phone, IPod or Blackberry. The exam consists of 60 multiple choice
questions (60 marks) and 8 problems (40 marks).
The day and time of your final examination will be listed in your PAWS account.
The location listed in PAWS for your exam is the Saskatoon location. If you want to write your
final exam outside Saskatoon, you must complete an Application for Final Examination form,
available at: https://ccde.usask.ca/exam-info This will let us know where you would like to write
your exam.
Students writing in Saskatoon do not need to complete this form.
Submitting Assignments
Submission forms and pre-addressed envelopes are included in your course materials package.
Assignments may be submitted by mail, fax, or in person. Your instructor will also accept
assignments submitted electronically.
Options for Submitting Assignments:
•
Electronically to your instructor using the Assignments tool in the Blackboard
Learn system (preferred mode). This mode will enable the instructor to give you the
quickest feedback.
•
By fax (with completed submission form) to CCDE at (306) 966-5245.
•
In person (with completed submission form) to the Main Office at the Centre for
Continuing and Distance Education (address below) Monday through Friday between
8:30 a.m. and 4:30 p.m. After Hours: Via the drop slot located at the top of the central
stairwell, on the Fourth Floor of the Williams Building (address below).
•
By mail (with completed submission form) to:
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ECON 111.3 – Price Theory and Resource Allocation (Microeconomics)
The Centre for Continuing and Distance Education (CCDE)
Room 464, Williams Building
University of Saskatchewan
221 Cumberland Avenue North
Saskatoon, SK S7N 1M3
Please note that assignments sent by mail should be postmarked no later than the due date,
and faxes should be sent prior to 4:30 p.m. Saskatchewan time on the due date.
You should keep a personal copy of all assignments submitted.
Additional Information
Students must submit all five Assignments and write the Final Exam in order to be
eligible for a passing grade in this class.
Late Assignments
Assignments are due on the dates specified on the Course Schedule. Assignments must be
submitted on time. 10% will be deducted for each day late. Zero percent will be given with 10
days late. An extension may be granted provided that a legitimate reason is given; discuss with
your instructor.
Students with Disabilities
If you have a diagnosed disability (learning, medical, physical, or mental health), you are strongly
encouraged to register with Disability Services for Students (DSS). In order to access DSS
programs and supports, you must follow DSS policy and procedures. If you suspect you may
have a disability, contact DSS for advice and referrals. For more information,
see http://www.students.usask.ca/disability/ or contact DSS at 306-966-7273 or [email protected].
Integrity Defined
“Integrity is expected of all students in their academic work – class participation, examinations,
assignments, research, practica – and in their non-academic interactions and activities as well.”
(Office of the University Secretary)
It is your responsibility to be familiar with the University of Saskatchewan Guidelines for
Academic Conduct. More information is available at
http://www.usask.ca/secretariat/student-conduct-appeals/IntegrityDefined.pdf
Module Objectives
Module 1: Introduction to Economics
1.
2.
3.
4.
5.
6.
Relate scarcity to the concepts of tradeoffs and opportunity cost.
Explain the use of marginal reasoning in decision making.
Demonstrate how incentives affect people’s behaviour.
Identify why trade among people or nations can make everyone better off.
Explain why markets are a good, but not perfect, way to allocate resources.
Examine how the economy works as a whole.
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ECON 111.3 – Price Theory and Resource Allocation (Microeconomics)
Module 2: Thinking Like an Economist
1.
2.
3.
4.
5.
6.
Develop economic models using the scientific method.
Explain how assumptions and models can shed light on the real world.
Develop two simple models—the circular flow and the production possibilities frontier.
Outline the difference between microeconomics and macroeconomics.
Contrast the difference between positive and normative statements.
Explain why economists sometimes disagree with one another.
Module 3: Interdependence and Gains from Trade
1.
2.
3.
4.
Explain how everyone can benefit when people trade with one another.
Contrast the difference between absolute advantage and comparative advantage.
Depict the role of comparative advantage to specialization and trade.
Relate the theory of comparative advantage to everyday life and national policy.
Module 4: Market Forces of Demand and Supply
1.
2.
3.
4.
Determine the demand for a good in a competitive market.
Determine the supply of a good in a competitive market.
Develop the demand and supply model.
Apply the demand and supply model to examine how the event affects the competitive
market.
5. Illustrate the role of prices in allocating scarce resources in market economies.
Module 5: Elasticity and Its Application
1.
2.
3.
4.
5.
6.
7.
Interpret the meaning of the elasticity of demand.
Outline what determines the elasticity of demand.
Interpret the meaning of the elasticity of supply.
Outline what determines the elasticity of supply.
Interpret the meaning of the income elasticity of demand.
Interpret the meaning of the cross-price elasticity of demand.
Relate the concept of elasticity in everyday life.
Module 6: Supply, Demand, and Government Policies
1.
2.
3.
4.
5.
Examine the effects of government policies that place a ceiling on prices.
Examine the effects of government policies that put a floor under prices.
Identify how a tax on a good affects the price of the good and the quantity sold.
Illustrate how taxes levied on buyers are equivalent to taxes levied on sellers.
Identify how the burden of a tax is split between buyers and sellers.
Module 7: Consumers, Producers, and the Efficiency of Markets
1.
2.
3.
4.
5.
Relate buyers’ willingness to pay for a good to the demand curve.
Compute consumer surplus.
Relate sellers’ costs of producing a good to the supply curve.
Compute producer surplus.
Illustrate how the market achieves efficiency when the sum of consumer surplus and
producer surplus is maximized.
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ECON 111.3 – Price Theory and Resource Allocation (Microeconomics)
Module 8: Application: The Costs of Taxation
1.
2.
3.
4.
Explain how taxes reduce consumer and producer surplus.
Examine the causes of the deadweight loss of a tax.
Outline why some taxes have larger deadweight losses than others.
Illustrate how tax revenue and deadweight loss vary with the size of a tax.
Module 9: Application: International Trade
1.
2.
3.
4.
Determine whether a country should import or export a good.
Explain who wins and who loses from international trade.
Examine the welfare effects of tariffs and import quotas.
Outline the arguments people use to advocate trade restrictions.
Module 10: Externalities
1.
2.
3.
4.
Examine why externalities can make market outcomes inefficient.
Explain how people can sometimes solve the problem of externalities on their own.
Examine why private solutions to externalities sometimes do not work.
Identify various government policies aimed at solving the problem of externalities.
Module 11: The Costs of Production
1.
2.
3.
4.
5.
Identify what items are included in a firm’s costs of production.
Relate a firm’s production process to its total costs.
Relate average total cost to marginal cost.
Generalize the shape of a typical firm’s cost curves.
Outline the relationship between short-run and long-run costs.
Module 12: Firms in Competitive Markets
1.
2.
3.
4.
5.
Outline the characteristics of a competitive market.
Illustrate how competitive firms decide output level.
Identify when a competitive firm decides to shut down production temporarily.
Identify when a competitive firm decides to exit or enter a market.
Determine how a firm’s behaviour affects a market’s short-run and long-run supply
curves.
Module 13: Monopoly
1.
2.
3.
4.
5.
Explain why some markets have only one seller.
Examine the production and pricing decision of monopolists.
Illustrate how the monopoly’s decisions affect economic well-being.
Explain various public policies aimed at solving the problem of monopoly.
Examine why monopolies try to charge different prices to different customers.
Module 14: Monopolistic Competition
1. Illustrate how competition exists among firms that sell differentiated products.
2. Contrast the outcomes between monopolistic competition and perfect competition.
3. Examine the desirability of outcomes in monopolistic competition.
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ECON 111.3 – Price Theory and Resource Allocation (Microeconomics)
4. Evaluate the debate over the effects of advertising.
5. Evaluate the debate over the role of brand names.
Module 15: Oligopoly
1. Examine possible outcomes in an oligopoly.
2. Illustrate how the prisoners’ dilemma applies to oligopoly and other issues.
3. Evaluate how the competition laws foster competition in oligopolistic markets.
Module 16: The Markets for the Factors of Production
1.
2.
3.
4.
5.
Develop the labour demand of competitive, profit-maximizing firms.
Characterize the household decisions that lie behind labour supply.
Illustrate how equilibrium wages equal the value of the marginal product of labour.
Examine how the other factors of production—land and capital—are compensated.
Explain how a change in the supply of one factor alters the earnings of all of the factors.
Acknowledgments
Course Author
Wendy Doell, M.A. (Economics) and M.B.A., Sessional Lecturer, Department of Economics,
University of Saskatchewan
Instructional Design and Course Development
Jeanette McKee, M.Ed., Instructional Designer, Centre for Continuing & Distance Education,
University of Saskatchewan
Graphic Design
Robb Larmer, Coordinator, Instructional Technologies, Centre for Continuing & Distance
Education, University of Saskatchewan
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