ECON101 Principles of Microeconomics Dr. Erik D.

Craft
University of Richmond Email: [email protected]
Fall 2020 RSB Q275
Office phone: (804) 287-6573
Cell phone: (804) 240-4194
Zoom Office Hours: Tuesdays 8:30-10am
Thursdays 11:30am-12:30pm

SYLLABUS
Content: This course introduces students to microeconomics, also known as price theory. The payoff to
learning microeconomics is added insight to our understanding of individual, organizational, and market
behavior, as well as public policy. Aggregate economic topics such as employment, inflation, growth,
and interest rates are the subject matter of macroeconomic theory. The focus in this course is to develop
the economic way of thinking. The economic way of thinking helps us understand why people act the
way they do, how we can individually make more efficient choices, how firms make and could better
make business decisions, and how we can evaluate different government policies from the perspective of
efficiency.
By the end of the course, students should have the ability to:
1) recognize the presence of economic scarcity and the immediate implication that all choices
require giving up other opportunities.
2) Identify opportunity costs of any choice and apply opportunity costs to the theory of comparative
advantage.
3) Use supply and demand diagrams to predict changes in equilibrium price and quantity.
4) Understand the information that elasticities convey and how slopes of demand and supply curves
affect who bears the actual burden of a tax.
5) Apply the concepts of consumer surplus and producer surplus to identify allocative inefficiency
due to price controls, taxes, externalities, information asymmetries, and market power, as well as
to identify potential solutions.
6) Explain why perfectly competitive markets achieve allocative, production, and consumption
efficiency.

Field of Studies: Economics 101 satisfies the field of studies social analysis requirement because the
course systematically studies the behavior of consumers and firms as they interact through markets.

Evaluation: The weights of your final grade will be as follows:

12.5% Daily Quizzes (Four multiple choice questions: lowest five scores will be dropped, so
there are no makeups; if you miss class due to a required university event, religious
holiday, or funeral, I shall drop an additional daily quiz score.)
10% Six Problem Sets (You may work in groups of up to four persons, but you must
submit your own answers, not identical problem sets.)
35% MyEconLab Online Chapter Quizzes (I shall drop your lowest percentage
score. You work alone. They are open book, but you will have limited time, so you
cannot expect to look up many answers. With the exception of technical problems at
UR or MyEconLab, missing the due date means a 25% reduction in your quiz
score.)
10% Midterm Examination # 1
10% Midterm Examination # 2
22.5% Cumulative Final Examination
(Exams are about 75% multiple choice and 25% essay questions)
The cutoff point for a B- is 80, for a B 83, and for a B+ 86. Similar breaks exist for the other letter
grades.
You will receive a zero for missing an examination unless you have a medically-certified illness,
death in the family, or university-sponsored activity and you communicate with me in advance of the
exam. In cases where you have a valid reason for missing an examination, I reserve the right to weight
your problem sets, online exercises, and other exams higher in calculating your final grade in place of
taking a make-up examination. Since the development of an effective writing style is one goal of your
education, I reserve the right to reward unusually articulate prose and to penalize answers whose
sentences do not parse or are otherwise grammatically incorrect. To earn an A in this course, you should
devote 10 – 14 hours (inside and outside of class) per week, reading, watching online videos, studying
the material, and preparing assignments. You are accountable for announcements I make during class
regarding assignment due dates.

I shall have an outline of the upcoming material on PowerPoint ready for you to access on
Blackboard before class. Quizzes and exercises will be found in MyEconLab. As often as is feasible, I
shall seek to find interesting examples and applications to illustrate the ideas we are studying. I shall do
my best to add variety to the course. I shall provide you with a review sheet of important concepts for
each exam. At the end of the course, I shall make available my grade spreadsheet so that you can check
that I have recorded your problem set and exam scores correctly.

I expect you to be in Zoom on time with your video on and in your seat during class, having
completed the assigned material by the beginning of class. If class is cancelled for any reason, we will
make it up by lengthening class twice two seventy-five minutes during the normally scheduled seventy-
five minute period.

Honor Code: All students are expected to abide by the University Honor Statute. Some courses might
include group work and consultations with Writing or Speech Consultants and/or peer editors—such
collaboration, of course, does not violate the University Honor Statute, which prohibits unauthorized
assistance in the completion of a given assignment. All students are expected to understand and avoid
plagiarism and all other forms of academic dishonesty.

During class, students should not use cell phones or computers for any activity other than those
directly related to our course.

Religious Observance Policy: Students needing to miss class because of religious observance should
contact me within the first two weeks of the semester to discuss the absence. The University’s full
religious observance policy may be found here
(http://registrar.richmond.edu/services/policies/religiousobsv.html).

Text: Microeconomics by Hubbard and O’Brien (eighth edition)

MyEconLab online software package
MobLab online software package

Important Dates: Introductory MyEconLab Exercise Due August 27

Midterm Examination # 1 September 25

Midterm Examination # 2 (cumulative) October 28

Final (cumulative) Sec. 2 (MWF noon) December 10, 9am to
noon
Sec. 3 (MWF 1:30pm) December 14, 2pm to 5pm
 Sec. 4 (MWF 3pm) December 7, 9am to noon
Sec. 7 (MWF 9am) December 9, 9am to noon
No final examinations will be given outside the examination period without the permission of the Dean.
Supplementary Readings (found in Blackboard):
Bade, Robin and Michael Parkin. “Allocation Methods and Efficiency” in Foundations of
Microeconomics. New York: Pearson 2015.
Bastiat, Frederic. “Abundance, Scarcity,” “Obstacle, Cause,” and “Petition of the Manufacturers of
Candles” in Bastiat’s Economic Sophisms. 1873
Blinder, Alan. “A Brief Introduction to Trade Economics.” Wall Street Journal. July 9, 2018.
Blinder, Alan. “Individual Choice Is a Bad Fit for Covid Safety.” Wall Street Journal. August 13, 2020.
Buffett, Warren. “Better Than Raising the Minimum Wage.” Wall Street Journal. May 21, 2015.
Crane, Christopher and Ted Halstead. “How to Cut Emissions Without Wrecking the Economy” Wall
Street Journal. September 23, 2019.
Dougherty, Connor. “Every Problem in America Is a Housing Problem.” New York Times. February 16,
2020.
Economist. “The Expanding Universal.” August 12, 2017.
Economist. “What Harm Do Minimum Wages Do?” August 15, 2020.
Finch, Brian. “Washington Commuters Ask: For Whom Does the E-Z Pass Toll?” Wall Street Journal.
December 16, 2017.
Harrup, Anthony. “Mexican Tomato Growers Reach Pact.” Wall Street Journal. August 22, 2019.
Heyne, Paul. “Moral Criticisms of Markets.” The Senior Economist. Volume 10, No. 4, April 1995.
Irwin, Douglas A. “Mr. Trump’s Traffic Problem.” Wall Street Journal. December 16, 2017.
Will, George. “The Chicago Cupcake Truck vs. the Rent-Seekers.” Chicago Tribune. August 13, 2019.

CHAPTER COVERED TEXT AND READINGS WEEK

Economics: Foundations and Models Chapter 1 August 24

Trade-offs, Comparative Advantage, and the Chapter 2

Market System

Where Price Comes From: The Interaction of Chapter 3

Demand and Supply

Elasticity: The Responsiveness of Demand and Supply Chapter 6

http://www.mruniversity.com/courses/principles-economics-microeconomics/elasticity-examples-
applications

Economic Efficiency, Government Price Setting, and Chapter 4

Taxes and
Public Choice, Taxes, and the Distribution of Income Chapter 17 (pages 570-82)
Bade and Parkin’s Allocation Methods and
Efficiency”
Heyne’s “Moral Criticisms of Markets”
Dougherty’s “Every Problem in America Is a
Housing Problem”
Economist’s “What Harm Do Minimum Wages
Do?”
Buffett’s “Better Than Raising the Minimum
Wage”
https://www.mruniversity.com/courses/development-economics/rent-control-mumbai-india-0?
utm_source=Economics+Is+Everywhere&utm_campaign=31582b31b5-MRUemail_rent-control-
mumbai&utm_medium=email&utm_term=0_f6dfaafe6a-31582b31b5-103918797

Externalities, Environmental Policy, and Chapter 5

Public Goods
Blinder’s “Individual Choice Is a Bad
Fit”

Finch’s “Washington Commuters”

Crane and Halstead’s “How to Cut Emissions”
http://www.mruniversity.com/courses/principles-economics-microeconomics/clean-air-act-pollution-
control
http://www.mruniversity.com/courses/principles-economics-microeconomics/deeper-look-tradeable-
allowances
http://www.mruniversity.com/courses/principles-economics-microeconomics/public-goods-example-
asteroid-defense

Economics of Health Care Chapter 7

Economist’s “The Expanding Universal”

Comparative Advantage and the Chapter 9

Gain from International Trade Bastiat selections

Blinder’s “A Brief Introduction to Trade

Economics”

Irwin’s “Mr. Trump’s Traffic Problem”

Harrup’s “Mexican Tomato Growers”

Chapter 18 (middle of page 568 through rational
ignorance)
Will’s “Chicago Cupcake Truck”
https://fee.org/articles/watch-milton-friedman-refute-steel-protectionists-back-in-1978/

Technology, Production, and Costs Chapter 11

Firms in Perfectly Competitive Markets Chapter 12

Frank and Bernanke handout

Monopoly and Antitrust Policy Chapter 15

Chapter 17 (pages 568-69 on Rent Seeking)

Monopolistic Competition Chapter 13 (except sections 13.5 and 13.6)

Oligopoly: Firms in Less Competitive Markets Chapter 14 (except sections 14.3 and 14.4)

https://www.mruniversity.com/courses/everyday-economics/gift-giving-economists-christmas
If you experience difficulties in this course, do not hesitate to consult with me. There are also other resources that can
support you in your efforts to meet course requirements.

Academic Skills Center (http://asc.richmond.edu, 289-8626 or 289-8956): Assists students in assessing their academic
strengths and weaknesses; honing their academic skills through teaching effective test preparation, critical reading
and thinking, information conceptualization, concentration, and related techniques; working on specific subject areas
(e.g., calculus, chemistry, accounting, etc.); and encouraging campus and community involvement. Hours at the
Center are:
Sunday through Wednesday 3:00-9:00 p.m. and Thursday 3:00-7:00 p.m. On-call tutors are also available.

Boatwright Library Research Librarians (http://library.richmond.edu/help/ask/ or 289-8876): Research librarians assist

students with identifying and locating resources for class assignments, research papers and other course projects.
Librarians also provide research support for students and can respond to questions about evaluating and citing
sources. Students can email, text or IM or schedule a personal research appointment to meet with a librarian in
his/her office on the first floor Research and Collaborative Study area.

Career Services (http://careerservices.richmond.edu/ or 289-8547): Can assist you in exploring your interests and
abilities, choosing a major or course of study, connecting with internships and jobs, and investigating graduate and
professional school options. We encourage you to schedule an appointment with a career advisor early in your time
at UR.

Counseling and Psychological Services (http://wellness.richmond.edu/offices/caps/ or 289-8119): Assists currently

enrolled, full-time, degree-seeking students in improving their mental health and well-being, and in handling
challenges that may impede their growth and development. Services include brief consultations, short-term
counseling and psychotherapy, skills-building classes, crisis intervention, psychiatric consultation, and related
services.

Disability Services (https://disability.richmond.edu/students/index.html or 289.8032) The Office of Disability Services

works to ensure that qualified students with a disability (whether incoming or current) are provided with reasonable
accommodations that enable that student to participate fully in activities, programs, services and benefits provided to
all students. Please let your professors know as soon as possible if you have an accommodation that requires
academic coordination and planning.

Speech Center (http://speech.richmond.edu or 289-6409): Assists with preparation and practice in the pursuit of
excellence in public expression. Recording, playback, coaching and critique sessions offered by teams of student
consultants trained to assist in developing ideas, arranging key points for more effective organization, improving style
and delivery, and handling multimedia aids for individual and group presentations.

Writing Center (http://writing.richmond.edu or 289-8263): Assists writers at all levels of experience, across all majors.
Students can schedule appointments with trained writing consultants who offer friendly critiques of written work.