Economics 301 Intermediate Theory: Competitive Markets

 My Office: WMX 2670
Office Hours: Mondays and Wednesdays: one hour before class.
The best way to reach me will be through email  Try to be as specific as you can in your questions. As long as you've given some thought to your question, I don't mind if you drop by my office anytime.
 This course builds on the student's knowledge of economic principles. If it has been a long time since you took this course,  or if you would like a  primer that is related to this course, then go to my home page ( and check out the link to my principles textbook at McIness Creek Press.   The primary purpose of the course is to examine models of consumers, producers, and market equilibrium. However, this course is an in-depth analysis of the neoclassical model, and though we cover only a few topics, we will go into considerable detail. In light of this, you will be reading several classical articles along with your textbook.

The course requires students be comfortable with graphic,  mathematical, and analytical arguments. There will be a strong emphasis on applications of the economic model, to demonstrate that the ultimate purpose of modelling is to understand the behavior we observe in and outside the market place.

We have three hours of class time each week. I would like to use two hours for standard lecture material. In the third hour I'd like to do some different things. First, we can discuss some of the interesting problems on your problem sets. Second, we can open this time up for discussions more philosophical in nature. Finally, we can discuss some of the articles I've assigned for the class.

There are 8 serious articles for the course (plus a few just for fun). Prior to discussing them there will be a short and simple quiz to provide some additional incentives for serious reading.

Required Text:
1. Eaton, Eaton, and Allen, Microeconomics, 6th edition  (Pearson Education)

2.   The articles listed below.


The final letter grade will be based on the following weights:
Midterm Exam           30\%    
Final Exam                 40\%
Assignments               15\% 
Tutorial Participation     5\%
Participation/quizzes    10%

I really want you to do the extra reading and participate in class. Even though there will be about 40 people in class this should be managable. Hence I'm willing to give up to 10% of your grade based on your intelligent in class discussion and the short quizzes.

If you do better on the final than the midterm, the weight of the midterm will transfer to the final. The final will be cumulative.

Extra Readings:

These readings are likely to show up on exams, and are intended to generate discussion in lecture and tutorial.  

Alchian  "Evolution, Uncertainty, and Economic Theory''
McCloskey "The Limits of Expertise"
Maugham, "The Verger''
Becker "Irrational Behavior and Economic Theory"
Umbeck "Shipping the Good Apples Out"
Jacobs, "The Monkey's Paw"
Stigler "The Division of Labor is Limited by the Extent of the Market"
Barzel "An Alternative Approach to the Analyisis of Taxation"
Hayek  "The Role of Knowledge in Society"
Pashigan "Demand Uncertainty and Sales"


The following lists the assignments for the course. Generally speaking they are quite long and involved. It will work best for you if you find some others in the class to work on the problem sets together.  If you do work together, you may hand one assignment in for your group.  

The pace of the problem sets is based on my expectation of the progress we'll make in the course. The actual progress will depend on a number of factors, and it is likely I may get behind or ahead of the problem sets at some point. Generally speaking, the problem sets are to force you to READ AHEAD of class. I generally assign the easier questions for the problem sets. So don't get upset if you've got a problem set on chapter 5 and we haven't covered the material yet.  

Course Outline:

Week 1: Introduction, read chapters 1 and 2.

Week 2: Maximization and Utility.   Read Chapter 2 again!
                                                       Read Alchian, McCloskey, and the Verger.  Quiz on Monday lecture.

Week 3: Budget Constraints and Demand theory.  Read Chapter 3. 

              Problem Set # 1, Due  in  Week 3:  Chapter 1: Questions 1, 2.
                                                                      Chapter 2: Questions 1, 2, 3, 6, 7.
Week 4: Applications of Demand Theory. Read Chapter 4.
                                                                 Read Umbeck ... Quiz.

              Problem Set #2, Due in  Week 4: Chapter 3: Questions 6, 8, 15, 16, 18 .
                                                                   Chapter 4: Questions 1, 3, 10, 14, 15, 16

Week 5:  Intertemporal Choice.   Read Chapter 5.
                                                    Read Becker ... Quiz.

          Problem Set #3, second problem set on chapter 4.
Week 6:  Monday is a holiday. Wednesday's class will be a review and catch up day.

Week 7: MIDTERM EXAM on October 15.   Read Chapters 6 and 7.

Week 8: Costs and Production. Read Chapters 6 and 7 again.
             Problem Set #4, Due in  Week 8: Chapter 5: Questions 1, 2, 3, 4, 5.

Week 9: Perfect Competition and Applications. Read Chapters 8 and 9.

                Problem Set #5, Due in  Week 9: Chapter 6: Questions 1, 2, 3, 18, 22.
                                                                   Chapter 7: Questions 1, 2, 5, 9.
Week 10:   Applications.
                     Problem Set #6, Due in  Week 10: Chapter 8: Questions 1, 3, 14.
Week 11:   Monday is Holiday.
                  Wednesday               Read Barzel ... quiz.
Problem Set #7, Due in  Week 11: Chapter 9: Questions 1, 6, 11

Week 12:  Simple Monopoly. Read chapter 10.1 to 10.5.
                 General Equilibrium.   Read Chapter 13.
                                                 Problem Set #8, Due in  Week 12:       Chapter 10 Questions 5, 6, 7, 11.   
Week 13: Uncertainty. Read Chapter 17.
               Problem Set #9, Due in  Week 13: Chapter 13: Questions 1, 2, 9