ECON 226: Principles of Microeconomics Page 1 of 6

School of Business
Department of Accounting, Finance & Economics
P.O. Box 175, Port of Spain,
Trinidad, W.I.

Principles of Microeconomics - Course Outline

COURSE DESCRIPTION:
✓ ECON 226 – Principles of Microeconomics
✓ 1st Semester 2021/2022; 3 Credits T/R 1:40 P.M – 2:55 P.M
✓ Course Pre-requisites – None
✓ Venue: TBA

INSTRUCTOR INFORMATION
✓ Mr. Jeremiah Eton, Ph.D. Economics
✓ Associate Professor
✓ [email protected]
✓ School of Business, 662-2241 ext. 2919
✓ Office Location: Business Block
✓ Office Hours:
• Monday to Thursday: 2:00pm – 4:30pm

PURPOSE OF THE COURSE/COURSE RATIONALE

✓ Course Description: Basic concepts which describe how individuals choose what to consume and
how entrepreneurs choose what to produce, the pricing mechanism, the determination of the
output level in various market structures, etc. is covered in this course.

GOALS/AIMS
Principles of Microeconomics introduces the student to the tools for analysing economic activity at its
most basic level – individual buyers and individual firms (economic agents). Economic models are used
to predict economic behaviour at the micro level and understand how micro level decisions impact the
wider economy.

This course is designed to give each student the opportunity to achieve the following:

1. To acquire a greater awareness, appreciation, and understanding of the functioning of an

economy through the interaction of the household, the firm, and government.

2. To grasp the basic principles, concepts, theories, and techniques of, microeconomics.

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3. To apply these principles, concepts, theories and techniques to current economic issues and
problems, both domestic and international, to understand the world in its economic jargon

All of the above will be accomplished through assigned readings, class discussions, written assignments,
individual activities, quizzes, and exams.

COURSE CONTENT

TOPICS

1. Preliminaries
2. Consumer Behaviour
3. Basics of Demand and Supply
4. Individual and Market Demand
5. Production
6. Cost of Production
7. Market Structures
8. Market Failure
TOPICS IN DETAIL
1. Preliminaries
a. Define Economics; Differentiate Microeconomics from Macroeconomics
b. Introduce the concept of economic agents
c. Define: Scarcity, Choice, Opportunity Cost
d. Understanding the Production Possibility Curve/ Frontier (PPC/PPF)
e. Create a link between lines on a graph upon the upper-right quadrant of the Cartesian plan and the
diagrams drawn in economics
f. What is a free good?
g. Normative vs Positive Economics
h. What is a market
i. How is price determined? What, How and for Whom to Produce

2. Consumer Behaviour
a. Theories of Consumer Behaviour:
i. Cardinal Utility Theory vs Ordinal Utility Theory
b. Axioms/Assumptions of Consumer Preferences
c. Defining Cardinal Utility Theory
d. Defining; Utility, Marginal Utility, Total Utility, Diminishing Marginal Utility
e. Utility Maximization according to the Cardinal Utility theory
f. Defining: Indifference Curves, Indifference Maps
g. Characteristics of Indifference Curves
h. Defining the Budget Line; Factors that can cause the budget line to (i) shift and (ii) pivot
i. Utility Maximization according to the Ordinal Utility theory
j. Income and Substitution Effect

3. Basics of Demand and Supply & Individual and Market Demand (Part A)

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a. Derive the demand curve from Indifference curve analysis

b. Draw the Engel curve
c. Define: Demand, Demand Curve
d. Define: Normal Good, Luxury Good, Inferior Good, Giffen Good
e. List and Explain the Factors that affect the Demand Curve
f. Differentiate between notional demand and effective demand
g. Define derived demand
h. Define Supply and draw the supply curve
i. List and Explain the Factors that affect the supply curve
j. Define and illustrate equilibrium
k. How do changes in the factors affecting the Demand/ Supply Curve impact the respective curves
and the equilibrium price and quantities

4. Basics of Demand and Supply & Individual and Market Demand (Part B)

a. The impact of price controls on the equilibrium price: Price floor and price ceiling
b. Consumer Surplus vs Producer Surplus
c. Elasticity of Demand:
i. Types: Price, Income and Crossed
ii. Calculation and interpretation of the values
iii. Diagrams
iv. Factors affecting Price elasticity of Demand
v. Elasticity and Revenue

5. Production
a. Define Production
b. Explain the production function
c. Short Run vs Long Run
d. Define: Total Product (TP), Average Product (AP), Marginal Product (MP)
e. Production with one variable; define diminishing marginal returns
f. Calculations re: TP, AP, MP; Illustrate on a diagram
i. Establish the relationship between: 1) MP and AP and 2) MP and TP
g. Production with two variables (i.e. the long run)
h. Define and Illustrate: Isoquant, Isocost
i. How costs are minimized
j. Returns to scale

6. Cost of Production
a. Defining the relationship between production and costs
b. Define & Illustrate: Fixed, Variable & Total Costs
c. Define and Illustrate: Marginal Costs, Average Fixed Costs, Average Variable Costs, Average Total
Costs
d. Show the relationship between Average Costs and Marginal Costs
e. Show the calculation of the above costs and illustrate in a table
f. What is the shutdown position of the firm
g. Long-run vs Short-run Cost Curves
h. How does a firm maximize its profits?

7. Market Structures

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a. List the different Market Structures

b. The Characteristics of each of the different Market Structures
c. Price Discrimination
d. Profit Maximization within each Market Structure
e. Pros and Cons of Each Market Structure
f. How to deal with the negative impacts of a Monopoly

8. Market Failure & Externalities

a. Define what is market failure
b. List and explain the factors that cause market failure:
i. Define what are Public Goods vs Private Goods, Merit Goods, De-Merit
ii. Define what are Positive Externalities & Negative Externalities
c. Provide and assess the impacts of solutions to market failure.

RESOURCES

✓ Main Text: MICROECONOMIC, SEVENTH EDITION, 2009 By Robert S. Pindyck & Daniel L.
Rubinfeld
✓ Supplemental readings would be provided by the Lecturer where applicable

COURSE ASSESSMENT

Grading Procedure:
Grades will be earned on the following weighs:
Quizzes 10%
Assignments/Seminar Attendance 20%
Projects: 15%
Mid-Term Exam: 25%
Final Exam: 30%

______________________________________________________________________________
COURSE CALENDAR
______________________________________________________________________________

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Session
Chapter 1 – Preliminaries

Chapter 3 – Consumer Behaviour

Chapter 3 – Consumer Behaviour

Chapter 2 – The Basics of Supply & Demand

Chapter 2 – The Basics of Supply & Demand

Chapter 4 – Individual & Market Demand

Chapter 4 – Individual & Market Demand

Chapter 6 – Production

Chapter 7 – The Cost of Production

Chapter 8 – Profit Maximization

Market Structures

Market Structures

ADDITIONAL INFORMATION (Standard)

1. Attendance. Less than 80% of total possible logins for the semester will lead to an F grade. This means
that students must login at least 5 days a week. Attendance Policy/Regulations (USC Bulletin 2010-
2012, pg. 15)

6. Writing standards. All work submitted is expected to of excellent standard including being free from
grammatical and spelling errors. Assignments should in Standard English, neatly presented, be doubled
spaced and handed in with a standard cover page. Assignments should be in 12 sized, readable fonts. Please
keep your page margins consistent. Research work must be properly documented with a
reference/bibliography page using APA style. Where indicated, please submit work in a folder.
.

7. Copyright Infringement: The use of a resource without the prior consent of the resource creator.
Copyrighted works should not be revised, commercialized, or derivatives created without written
permission of the owner. The University of The Southern Caribbean will not interfere with measures
used by copyright holders to protect their copyrighted works.

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8. Academic Integrity. University policy stipulates that individual assignments must be completed
independently unless there are instructions to the contrary. Cheating or plagiarism will not be tolerated and
will incur severe penalties.
a. Honesty: Plagiarism is passing off someone else’s work or ideas as your own. Academic honesty
dictates that you keep your current and past assignments out of the hands of other students who may
misrepresent their origin. It is also recommended that you keep a record and or rough drafts or written
work until you receive your final grade. Falsifying attendance records and other acts of academic
breaches are dealt with seriously by the university. Plagiarism (USC Student Handbook, pg. 47)
b. Cheating: Providing or accepting assistance during a test is not acceptable. Penalties for cheating are
found on page 21 of the Undergraduate bulletin 2010 - 2012.

GRADING SYSTEM (Standard)

Letter Grade Marks/Percentage Letter Grade Marks/Percentage

A 90 - 100 C+ 65 - 69
A- 85 - 89 C 60 - 64
B+ 80 - 84 C- 55 - 59
B 75 - 79 D 50 - 54
B- 70 - 74 F 0 - 49

HOW TO SUCCEED IN THIS COURSE

To get the best result out of this course, it is very important that you develop and maintain the rig
ht attitude towards your studies. Additionally, the following pointers can help you do well in the c
ourse:

a) Make notes of your lectures as well as readings. Writing your own notes can help you
understand what you are writing and help you to remember them.
b) Read widely, not the minimum from the recommended text book.
c) If you find a resource difficult to understand or incomprehensible, get another resource so
that you do not lose precious time.
d) Ask questions in the class where you do not follow what has been taught.
e) Interact with your course mates and study in groups as much as possible as it a proven
method to share knowledge and improve academic performance.
f) Read your course material well in advance before appearing in class.
g) Do not just collect photocopies and hand-outs as this may only give you the impression
that you are accumulating invaluable resources of information. Rather, you must read
them, think about what you have read and make notes from them to enhance your
learning experience.
h) Have a positive attitude that no matter the challenges, you will be able to make it.
i) Every day, ask God, the author of all knowledge to enrich you with the ability to learn
and understand.

Undergraduate Course Outline: Revised July 2021

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Undergraduate Course Outline: Revised July 2021