Approved by University Studies Sub-Committee.
Approved by Faculty Senate 2/10/03
University Studies Course Approval
Department or Program: Economics
Course Number: 302
Semester Hours: 3
Frequency of Offering: One section each semester
Course Title: Intermediate Microeconomics.
Catalog Description: The theoretical approach to consumer demand, decision-making in the pricing and employment of resources under the major market classifications, and the distribution of resources and production. Prerequisite: ECON 201.
This is an existing course previously approved by A2C2: Yes
This is a new course proposal: No
Department Contact Person: Dan Kauffman Email: firstname.lastname@example.org
University Studies Approval is requested in: Unity and Diversity - Critical Analysis
The University Studies Program states that critical analysis courses are devoted to teaching critical thinking or analytic problem-solving skills. These skills include the ability to identify sound arguments and distinguish them from fallacious ones. The objective of these courses is to develop students abilities to effectively use the process of critical analysis. Disciplinary examples should be selected to support the development of critical analysis skills.
In connection with this objective, what follows are selected quotes from the first chapter of the best selling textbook for Intermediate Microeconomics, Pindyck and Rubinfelds fifth edition of Microeconomics, the textbook currently used for this course at WSU. These quotes reveal that critical analysis is an integral and ongoing aspect of Intermediate Microeconomics (and any economics course for that matter).
Like any science, economics is concerned with the explanation and prediction of observed phenomena.
In economics, as in other sciences, explanation and prediction are based on theories. Theories are developed to explain observed phenomena in terms of a set of basic rules and assumptions.
Economic theories are also the basis for making predictions . With the application of statistical and econometric techniques, theories can be used to construct models form which quantitative predictions can be made. A model is a mathematical representation, based on economic theory, of a firm, a market, or some other entity.
Statistics and econometrics also let us measure the accuracy of our predictions . Quantifying the accuracy of a prediction can be as important as the prediction itself.
No theory, whether in economics, physics, or any other science, is perfectly correct. The usefulness and validity of a theory depend on whether it succeeds in explaining and predicting the set of phenomena that it is intended to explain and predict. Theories, therefore, are continually tested against observation. As a result of this testing, they are often modified or refined and occasionally even discarded. The process of testing and refining theories is central to the development of economics as a science.
As required by the approval process, the following address the outcomes listed for Critical Analysis and further document course content and learning activities relevant to these outcomes.
a. evaluate the validity and reliability of information.
As noted in the quotes above, a primary emphasis with respect to validity in economics is on the ability of theory to explain and predict economic aspects of the real economy. What follows are just a few examples. Demand and supply analysis (theory) is used to evaluate the operation of a competitive market, including explaining how equilibrium price and quantity are determined and predicting how they would change in reaction to economic circumstances. In one illustration this modeling is applied to actual data from the wheat market. Theoretical concepts related to elasticity of demand are used to evaluate and predict, in quantitative terms, consumer reaction to a price change for a product. This is compared to actual quantitative estimates of elasticity for several products. One consequence of the theory of production is that the long-run average cost curve for a firm can exhibit economics of scale followed by constant returns to scale. This cost modeling can be compared to real world estimates of the shape of the long-run cost curve in a number of industrial markets.
Occasional attention is also paid to the validity of data. The primary issue here is whether the data used as an empirical measure of a theoretical concept adequately reflects the concept in hand theoretically. For example, how must accounting data on costs be adjusted to reflect costs as defined in economics.
Reliability of economic theory is usually evaluated by the theorys ability to continually explain and predict real economic events. The theories students see in Intermediate Microeconomics are commonly ones that have borne this test of applicability over time.
b. analyze modes of thought, expressive works, arguments, explanations, or theories.
Intermediate Microeconomics is the gateway theory class for the micro side of the economy. As such the course is permeated with theoretical models and their application to explaining events in real markets. Very few class days do not entail developing and working with an economic model. A few examples of economic models/theories constructed are: supply and demand model of a competitive market, theory of consumer behavior, production theory and related costs, and models of perfectly competitive markets and pure monopoly markets. The exams in the course require that students show and understanding of, and ability to apply, these economic theories and models.
c. recognize possible inadequacies or biases in the evidence given to support arguments or conclusions.
Economic theories, and their conclusions, introduced in Intermediate Microeconomics are often evaluated not only for their internal logic, but also for the assumptions that the theories are based on. For example, a strong argument is made that perfectly competitive markets are best for society in order to achieve efficiency in the allocation of scare resources. However, this argument is based on the assumptions that there are no externalities or imperfect information in the operation of the market. Consequently, failure to achieve these assumptions must ultimately be incorporated into the analysis. Just one application of this process is an evaluation of the market for human kidneys and the 1984 National Organ Transplantation Act. An initial demand and supply model for human kidneys is developed, and then externalities and imperfect information are included in evaluating the consequences of the human kidney market. Ultimately the evaluation concludes with the recognition that there are many complex ethical and economic issues related to the sale of organs, and that some of the arguments transcend economics.
d. advance and support claims.
Day-to-day students will be involved in class discussions that entail the development and application of microeconomic theory. However, the more aggressive form for students to advance and support claims is through the series of exams given in the course. These exams are a combination of multiple choice questions and essays. The multiple choice questions tend to focus on individual mechanics of economic theory and its application. The essays are more comprehensive and require recognizing, developing, and applying the appropriate economic theory to analyze and evaluate a situation that often mirrors circumstances in the real economy.
ECONOMICS 302 - INTERMEDIATE MICROECONOMICS
SPRING SEMESTER 2003
Instructor: Dan Kauffman
Office Hours: MWF 11-12 noon & M 2-3 p.m., TH 9-11 a.m. & 1-2 p.m., or by appointment
Office Phone: 457-5195
SUMMARY COURSE DESCRIPTION
The theoretical approach to consumer demand, decision-making in the pricing and employment of resources under the major market classification, and the distribution of resources and production. Prerequisite: ECON 201.
University Studies Program: Unity and Diversity - Critical Analysis
This course fulfills the three semester hours in Critical Analysis required in the Unity and Diversity section of the University Studies Program. As such, it seeks to include requirements and learning activities that promote students abilities to:
a. evaluate the validity and reliability of information;
b. analyze modes of thought, expressive works, arguments, explanations, or theories;
c. recognize possible inadequacies or biases in the evidence given to support arguments or conclusions; and
d. advance and support claims.
The course outline below identifies where these University Studies Program outcomes are addressed by placing the letter references above in parenthesis.
Pindyck & Rubinfeld, Microeconomics, 5th Ed., 2001, Prentice Hall.
Textbook website (includes an On-Line Study Guide) - www.prenhall.com/pindyck
I. Introduction: Foundations, Methodology, Supply and Demand, and Elasticity
Chapter 1: All Sections (pp. 3-17) (a,b,d)
Chapter 2: Section 2.1 - first part of Section 2.4 (pp. 19-32) (a,b,c,d)
Chapter 4: Section 4.3 (pp. 116-123), Section 4.6 (pp. 131-135) (a,b,c,d)
Chapter 2: Rest of Section 2.4 - Section 2.7 (pp. 32-55) (a,b,c,d)
Exam 1 (a,b,c,d)
II. Consumer Behavior, Indifference Curves, Budget Line, Income and Substitution Effects, and Consumer Surplus
Chapter 3: All Sections (pp. 61-98) (a,b,c,d)
Chapter 4: Section 4.1 - Section 4.2 (pp. 101-115), Section 4.4 (pp. 123-127) (a,b,c,d)
Exam 2 (a,b,c,d)
III. Production and Costs
Chapter 6: All Sections (pp. 177-201) (a,b,c,d)
Chapter 7: Section 7.1 - Section 7.4 (pp. 203-229), Section 7.7 (pp. 237-242) (a,b,c,d)
Exam 3 (a,b,c,d)
IV. Perfect Competition and Monopoly/Monopsony
Chapter 8: All Sections (pp. 251-283) (a,b,c,d)
Chapter 9: Section 9.1 - Section 9.3 (pp. 287-302) (a,b,c,d)
Chapter 10: All Sections (pp. 327-364) (a,b,c,d)
Exam 4 (a,b,c,d)
If time allows we will cover some of part V below.
V. Applied Micro and More Theory (a,b,c,d)
Chapter 11: Pricing with Market Power
Chapter 12: Monopolistic Competition and Oligopoly
Chapter 13: Game Theory and Competitive Strategy
Chapter 14: Markets for Factor Inputs
Chapter 16: General Equilibrium and Economic Efficiency
Exam 5 (a,b,c,d)
Initial plans are for four or five required exams as outlined above. Exam dates will be announced about a week ahead. The final exam period will be used for Exam 4 or Exam 5 depending on the amount of material covered. Each exam will probably consist of a 30-40 point take-home essay question preceding an in-class exam with about 70 points of multiple choice and a 30-40 point essay question.
Arrangements should be made to take any make-up exam before the original is given. Only in documented emergency situations will a make-up exam be given if arrangements have not been made before hand.
On each exam, and for the course grade, the following percentages of total points will likely apply (they have fit in the past but I reserve the right to change them):
75 - 100% = A
60 - 74% = B
45 - 59% = C
Less than 45% = D
ACADEMIC INTEGRITY POLICY
Winona State students are required to adhere to WSU's standards of academic honesty. Cheating in any form, deception and misrepresentation of work presented, and plagiarism are a few examples of academic dishonesty. Information regarding this Student Conduct Policy can be found on the Student Affairs web site at http://www.winona.msus.edu/studentaffairs/conduct.htm. A visit to that site would be advantageous.