Econ 107 A
 

Principles of Economics

My office hours:
M 1:00-3:50pm and W 10:00-11:50am in Maxey 313, or by request. I will also try to have informal "office hours" in the Prentiss dining hall at 6pm on Tuesdays

Taught spring semester 2005 at Whitman College.

Final exam: 2-4pm on Tuesday, May 17. My reading of the final exam schedule indicates that our final is scheduled for the time noted above. Please let me know immediately if you think I have it wrong. The final exam and its answer key will be posted after the exam.

The final exam will be open Mankiw, meaning that you can bring and use your copy of Mankiw and/or use the copy that I will have available for general use. (Note that you are not allowed to write inappropriate notes in your Mankiw text...) The macro questions on the final (i.e., the questions about Mankiw) will be best studied for by reading through the Mankiw chapters and looking at the end-of-chapter problems.

Complete Course Schedule

(subject to change!)

Note that some of the readings below link to restricted access websites such as JSTOR. Whitman folks should be able to access these from any computer on campus, or from any computer off campus once properly configured with the Whitman proxy server.

Week 1 (starts Monday, January 17)

Tuesday: Introductions.

Thursday (Fun Day!): The big picture. Read (and comment on in Blackboard--see log-in instructions below--by 8am Thursday):

  • Leonard E. Read, "I, Pencil", The Freeman, December 1958.
  • Garrett Hardin, "The Tragedy of the Commons", Science, New Series, Vol. 162, Issue 3859 (Dec. 13, 1968), pp. 1243-1248. Hardcopies available at the Penrose reserve desk.

Logging on to Blackboard

  1. Go to the Blackboard webpage.
  2. Log in using your ID (your email name, e.g. bushgw for George W Bush) and your email password. You may get funny error messages or otherwise have trouble logging on, so try this at least three times before moving to Plan B, which is click on the "Forgot My Password" button, and then entering your name and email address in option #2 at the next screen.
  3. You should now be in the Blackboard system. Go to the "Courses" tab and type "Econ 107" in the "search for classes" box. Hopefully this will bring up a search window that correctly lists our class.
  4. Click the "Enroll" button on the right hand side (not the class name!) and then confirm this by clicking "Submit" in the next window.
  5. You should now be in the Blackboard area for Econ 107. Click on "Discussion Board" on the left hand side.
  6. Problems? Read the WCTS help page.
  7. If you are unable to log on to Blackboard, email me your posting or bring a hard copy to class.
  8. If you have suggestions for improving these instructions, send me an email.

Week 2 (starts Monday, January 24)

Monday: Chapter 1 of Quantum Micro (Decision Theory, see also Mankiw pp. 4-7)

Tuesday: Chapter 2 of Quantum Micro (Optimization and Risk, see also Mankiw pp. 440-414). Please bring a calculator to class. For an interesting article about the mathematics of lotteries and whether or not it's stupid to play, read Jordan Ellenberg, Is Powerball a Mug's Game?, Slate, August 31, 2001. (The mathematical workout that he mentions is not available on the Slate page, but Jordan emailed it to me and you can get it here.

Thursday (Fun Day!): Paper consumption at Whitman. Paper Conservation Awareness Week at Whitman is sponsored by a group of students who would like Whitman to use less paper and buy more recycled paper. Your assignment is to read this Paper Manifesto and then post, on Blackboard by 8am Thursday, your thoughts on paper use at Whitman and what (if anything) should be done about it. I'd like you to think in particular about how this situation relates to things we've discussed in class, and (although you don't have to post about this) I'd be interested in hearing your thoughts about the merits of using economic instruments (i.e., charging for printing) to reduce paper use.

Week 3 (starts Monday, January 31)

Monday: Chapter 3 of Quantum Micro (Optimization over Time, see also Mankiw pp. 408-410) Please bring a calculator to class.

Tuesday: Chapter 4 of Quantum Micro (More Optimization over Time) Please bring a calculator to class.

Thursday (Fun Day!): Games. There is no reading or writing assignment, but you might consider bringing a few dollars to class.

Week 4 (starts Monday, February 7)

Monday: Chapter 5 of Quantum Micro (Transition: Arbitrage, see also Mankiw pp. 415-418)

Tuesday: Chapter 6 of Quantum Micro (Cake-Cutting, see also Mankiw pp. 45-56)

Thursday: Exam #1. Please bring a calculator. Last semester's exams were take-home, so they were longer and more difficult than what you'll get. Nonetheless, you can get a good sense of the problems (and a great sense of the cheat sheet that comes with the exam) from the fall 2004 exam and its answer key. The questions and answers to today's exam will be posted after class.

Week 5 (starts Monday, February 14)

Monday: Chapter 7 of Quantum Micro (Economics and Social Welfare)

Tuesday: Chapter 8 of Quantum Micro (Sequential Move Games)

  • If you're looking for an extra credit project, or for more stuff on game theory, check out this supplemental chapter on iterated dominance and Nash equilibrium. You can do some problems for extra credit. If you're looking for calculus-based problems, there are some of those too, but you don't have to do them if you don't want to.

Thursday (Fun Day!): Free trade. Read (and comment on in Blackboard by 8am Thursday):

  • Lawrence Summers, "Memo", January 12, 1991. This internal memo was written when Summers was chief economist of the World Bank. The link above goes to a website that is not exactly unbiased, but the content of the memo is corroborated in The Economist, "Let them eat pollution", Feb. 8, 1992. See also, if you're interested, The Economist, "Pollution and the poor: why 'clean development' at any price is a curse on the third world", Feb. 15, 1992. Both of these are optional readings that are on reserve in the library.
  • Michael Finkel, "Complications", The New York Times Magazine, May 27, 2001. This article is available in the Course Documents page on Blackboard. I have also put a hard copy on reserve in the library in case you want to look at the pictures, or at the magazine cover page, which advertises the article as "This Little Kidney Went to Market".

Week 6 (starts Monday, February 21)

Monday: Presidents Day (no class)

Tuesday: Chapter 8 of Quantum Micro (Sequential Move Games)

Thursday (Fun Day!): Education/testing. Read (and comment on in Blackboard by 8am Thursday): Malcolm Gladwell, "Examined Life", The New Yorker, December 17, 2001. Given your life experiences, you should all be experts on issues surrounding education and testing, so spend some time thinking about testing and the incentives it creates and whether those incentives lead to good outcomes or bad outcomes and how you would reform the education system....

Week 7 (starts Monday, February 28)

Monday: Chapter 9 of Quantum Micro (Simultaneous Move Games)

Tuesday: Chapter 10 of Quantum Micro (Application: Auctions)

Thursday (Fun Day!): Environmental issues. Read (and comment on in Blackboard by 8am Thursday):

  • Excerpt from John C. Ryan and Alan Thein Durning, Stuff: The Secret Lives of Everyday Things (Seattle: Northwest Environment Watch, 1997). Click on the "excerpt" link on the right hand side of the above webpage. I have also placed a number of copies of the book on reserve in the library; it's small and very readable and has neat pictures. PS. This is not required, but if you're interested: also available on reserve in the library (and in full text on the N.E.W. website) is a book I had the good fortune to co-author with Alan Durning: Tax Shift: How to Help the Economy, Improve the Environment, and Get the Tax Man off Our Backs (Seattle: Northwest Environment Watch, 1998).
  • "Plenty of Gloom", The Economist, December 18, 1997. You may not be able to access this link; if you have problems, this article is also available in the Course Documents page on Blackboard. PS. This is not required, but for more along the same lines, Penrose has a copy of The Skeptical Environmentalist : Measuring the Real State of the World, by Bjorn Lomborg (2001). This book caused a lot of controversy, as a Google search will no doubt reveal.

Week 8 (starts Monday, March 7)

Monday: Chapter 11 of Quantum Micro (Application: Marine Affairs) and Chapter 12 of Quantum Micro (Transition: Game Theory v. Price Theory)

Tuesday: In-class study day for Exam #2. (I will not have any prepared material but will be available to answer questions &etc.)

Thursday: Exam #2. Please bring a calculator. Last semester's exams were take-home, so they were longer and more difficult than what you'll get. Nonetheless, you can get a good sense of the problems (and a great sense of the cheat sheet that comes with the exam) from the fall 2004 exam and its answer key. The questions and answers to today's exam will be posted after class.

Weeks 9 and 10 (starts Monday, March 14)

Spring break (no class)

Week 11 (starts Monday, March 28)

Monday: Chapter 13 of Quantum Micro (Supply and Demand Basics, see also Mankiw pp. 63-84)

Tuesday: Chapter 14 of Quantum Micro (Taxes, see also Mankiw pp. 124-131)

Thursday (Fun Day!): Supply and demand. We'll do a double oral auction experiment. There is no reading or writing assignment.

Week 12 (starts Monday, April 4)

Monday: Chapter 14 of Quantum Micro (Taxes, see also Mankiw pp. 124-131) and Chapter 15 (Elasticities, see also Mankiw pp. 89-109).

Tuesday: No class because of Whitman Undergraduate Conference

Thursday (Fun Day!): Voting. Read (and comment on in Blackboard by 8am Thursday):

  • Steven E. Landsburg, "Don't Vote", Slate, September 29, 2004. If you're interested, you can also check out the reply from Jordan Ellenberg, Vote!, Slate, October 11, 2004.
  • Think about your own voting patterns (or lack thereof): Do you vote? Why or why not? How do you (or how would you) decide who to vote for? Do you think voting for a third-party candidate (e.g., Ralph Nader) is "throwing your vote away"? What do you think about strategic voting (e.g., registering as a member of the other party and voting in primaries for far-left or far-right candidates so that that party will nominate a far-out candidate who will get trounced in the general election)?

Week 13 (starts Monday, April 11)

Monday: Chapter 16 of Quantum Micro (Supply and Demand Details)

Tuesday: Chapter 17 of Quantum Micro (Margins, see also Mankiw pp. 137-155)

Thursday (Fun Day!): Social Security I. Social Security has been in the news a lot lately. I'm curious to learn what you know (or think you know) about it and what you'd like to know (or think you'd like to know) about it. So: by 8am Thursday, spend at least 15 minutes thinking about (and at least 15 additional minutes commenting on in Blackboard) what you understand and don't understand about Social Security. There are no right or wrong answers; I just want to know what you think and what questions you have.

  • There is no reading assignment for Thursday, and my preference would be for you to not do any reading: I really want to know what's on your mind without any preconditioning. However, if you really have absolutely nothing to say, I would recommend googling "Social Security" and then reading stuff until you do have something to say.

Week 14 (starts Monday, April 18)

Monday: Chapter 18 of Quantum Micro (Transition: Welfare Economics) and Mankiw, Chapters 15 and 16

Tuesday: Mankiw, Chapters 17 and 18

Thursday: Exam #3. Please bring a calculator. The questions and answers to today's exam will be posted after class.

Last semester's exams were take-home, so they were longer and more difficult than what you'll get. Nonetheless, you can get a good sense of the problems (and a great sense of the cheat sheet that comes with the exam) from the fall 2004 exam and its answer key. You can also get a good sense from the following list of possible exam topics:

  • Qualitative questions about supply and demand shifts (e.g., if TV is invented then what happens to the market for books).
  • Quantitative questions about per-unit and ad valorem (sales) taxes, e.g., how will a 40-cent per unit tax on the buyers affect the supply and demand curves, how is the tax burden divided between buyers and sellers, etc---basically just like the review questions we've done in class.
  • Calculations of elasticities and total revenue.
  • "Explain" questions, e.g., "Explain why the intersection of the supply and demand curves should be the market equilibrium" and "Explain why a 40-cent per unit tax on the buyers has the effect that it does on the supply and demand curves." Note that I expect a quantitative answer for the latter question. A good answer would be something like "At a market price of $1.00, buyers are effectively paying $1.40 because of the tax, so once the tax is imposed they should be willing to buy as much at a price of $1.00 as they were willing to buy at a price of $1.40 when there was no tax." For per-unit taxes (but not sales taxes!), another equally good answer is that "a 40-cent per unit tax lowers buyers marginal benefits by 40 cents." A BAD answer is something qualitative and incomplete, e.g., "Buyers want to buy less because of the tax, so the demand curve shifts to the left."
  • Numerical questions involving equations for supply and demand, including (a) aggregating individual supply/demand curves to get market supply/demand curves; (b) solving supply/demand curves simultaneously to get the market equilibrium, and (c) showing the impact of taxes on supply/demand curves.

Week 15 (starts Monday, April 25)

Monday: Mankiw, Chapters 19 and 20

Tuesday: Mankiw, Chapter 21

Thursday (Fun Day!): Social Security and Medicare. Read (and comment on in Blackboard by 8am Thursday):

  • Summary of the 2005 annual report from the Social Security and Medicare Boards of Trustees. (This is a pretty long report and contains a fair amount of technical stuff, so just get what you can from it.)
  • Optionally, you can also check out the Social Security Administration's FAQs about Social Security's future or, for some more light-hearted propaganda, the fantabulous Social Security kid's page. I also encourage you to surf the web for other opinions; for example, many analysts do not believe that the Social Security Trust Fund actually exists (whatever that means).
  • We may do class evaluations today.

Week 16 (starts Monday, May 2)

Monday: Mankiw, Chapter 22

Tuesday: No class today

Thursday: Make-up from Tuesday and course evaluations.

Week 17 (starts Monday, May 9)

Monday: Mankiw, Chapter 23

Tuesday: Mankiw, Chapter 24

  • Today is the last day of class.

Final exam: 2-4pm on Tuesday, May 17

My reading of the final exam schedule indicates that our final is scheduled for the time noted above. Please let me know immediately if you think I have it wrong. The final exam and its answer key will be posted after the exam.

The final exam will be open Mankiw, meaning that you can bring and use your copy of Mankiw and/or use the copy that I will have available for general use. (Note that you are not allowed to write inappropriate notes in your Mankiw text...) The macro questions on the final (i.e., the questions about Mankiw) will be best studied for by reading through the Mankiw chapters and looking at the end-of-chapter problems.

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