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ECO 231

I. TITLE: Principles of Microeconomics

II. CATALOG DESCRIPTION:
An introduction to the application of the basic principles of supply and demand to the behavior of individual economic agents, such as consumers, households, businesses and non-profit firms, industries and resource owners. Real world examples are used to demonstrate the application of Microeconomics to everyday situations, including an analysis of the effects of government policies on individual markets and income distribution.

III. PURPOSE:
This course is designed to give the student an understanding and working knowledge of the basic tools of the economic analysis of firms, consumers, and markets, and the role of government in the economy. The course is designed to provide the students the tools necessary to understand how the economic decisions of individuals, firms and governments affect the allocation of scarce resources. Additionally, this course intends to teach students how to "think like an economist" and as such a heavy emphasis will be placed on problem solving and critical thinking skills.

This course will address the following characteristics of a Murray State graduate:
  Engage in mature, independent thought and express that thought effectively in written and oral communication.
  Understand the critical and scientific methodologies academic disciplines employ to discover knowledge and ascertain its
  validity
  Apply sound standards of analysis and evaluation to reach logical decisions.
  Understand the nature of responsible citizenship and pursue an active role in a democratic society.

Demonstrate mastery of their chosen field of study in preparation for a successful, productive life.

IV. COURSE OBJECTIVES:
(1) This course will develop in students a working understanding of the tools used to study the economic decisions made by firms, consumers, and governments. These decisions include the pricing of goods, level of firm output, the demand for and supply of labor and other input goods, consumer choices, and government regulation.
(2) The students in this course will develop an appreciation of economic modeling as an analytical tool to understand the inter-relation of various parts of the economy. Models of the economy will be developed and used to study how changes in the economic environment change economic decisions and outcomes. Different outcomes will be compared on grounds of efficiency, and decision rules will be developed.
(3) Students will learn to think critically and analytically about economic issues and problems. The students will learn to evaluate economic models on the basis of empirical evidence using the scientific method.
(4) Students will learn how the study of economics can inform the study of other disciplines such as history and political science.
(5) Students will be expected to demonstrate an ability to use tools of economic analysis to understand real world phenomena. This includes issues such as the causes of price changes, the effects of taxation in the economy, and the role of government in the solution of economic problems, such as monopolies and public goods.
(6) Students will be expected to understand how the global economy affects the decision making of individuals, firms, and governments, and how the allocation of resources across nations is determined.

V. CONTENT OUTLINE:
1. Introduction to Economics and Markets

a. Production Possibilities
b. Reasons for Trade
c. Supply and Demand Analysis
d. Impact of International Trade on Markets

a. Elasticities
b. Consumer Behavior
c. Production and Costs
d. Price and Output Choices
   i.  Perfect Competition
   ii.  Monopoly
   iii. Monopolistic Competition
   iv. Other Non-competitive Market Structures

a. Production and Resource Demand
b. labor Demand
c. Pricing and Use of Resources

a. Market Failures
   i. Public Goods
   ii. Externalities
b. Taxation
c. Economic Regulation

2. Reading assignments: Required readings in the course include the text, the Wall St. Journal, and supplemental readings and handouts from the instructors.

3. Group projects: Students in this course are encouraged to work together on homework  and other assignments. This is done to assist the students in their understanding of course material by encouraging them to discuss material among themselves and
explain the material to each other.

4. Written assignments: Written assignments are designed to assist students in integrating classroom learning with real-world economic phenomena. Students must demonstrate the ability to recognize and understand the role that economic theory
plays in the workings of the economy.

5. Homework assignments: These are problem based assignments to assist the students in  learning to solve economic problems.

6. Active learning: While all professors make use of the Socratic method in the classroom, some are experimenting with more involved active learning strategies.

7. Computer usage: Students will use a computerized tutorial program which will be available in the Business Building computer lab. Since we are likely to change books for the fall semester, we will evaluate the available software and incorporate it as part of homework assessment as deemed appropriate. Additionally, students will make use of the Internet to find economic discussions (such as those found at the web sites of the various Federal Reserve Banks) in partial fulfillment of research paper requirements.

VII. FIELD AND CLINICAL EXPERIENCES:  None.

VIII. RESOURCES:
Resources include the text and study guide, the Wall St. Journal, handouts from the instructor, as well as research information contained on web sites maintained by the Federal Reserve Banks and other governmental agencies.

IX. GRADING PROCEDURES:
Papers:                           15 %       (course objectives emphasized: 1, 3, 4, 6)
Exams                            65 %       (course objectives emphasized: all 6)
Homework grades          10 %.      (course objectives emphasized: 2, 5)
Quizzes                          10 %        (course objectives emphasized: 1, 2, 5, 6)
(These are approximate percentages and may be adjusted by individual instructors).

Grades will be distributed according to the following scale:
A: >90
B: 80 - 89
C: 70 – 79
D: 60 - 69
E: <60

In accordance with the Murray State catalog, a student who receives an 'A' is expected to show "exceptionally high quality" work in the course. This consists of knowledge of microeconomic theory and the ability to properly apply that theory to the evaluation of economic problems.
    Evaluation activities will draw on the ability of the student to understand fundamental concepts, the ability of the student to read and comprehend text and other material, the ability of the student to critically apply economic knowledge, and the ability of the student to clearly communicate their understanding of course material and the application of that material to economic issues.

X. ATTENDANCE POLICY:
While attendance policies vary among instructors, regular attendance in class is necessary for the successful completion of the course.

XI. ACADEMIC HONESTY POLICY:
Each student is expected to do his or her own work, unless otherwise stated by the instructor. The College of Business and Public Affairs policy on Academic Dishonesty will be enforced.

XII. TEXT AND REFERENCES:
Economics, 13th edition, Campbell McConnell and Stanley Brue is currently required but it is likely to be changed in the fall. The study guide for this text is recommended.
Other books or materials may be required by individual instructors.

XIII. PREREQUISITES:
Math 117, 120, 140 or 150 or a Math ACT score of at least 23.

Last updated February 8, 2000. Designed and maintained by Kyosung Koo