AGEC 305 COURSE SYLLABUS

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1 AGEC 305 AGRICULTURAL PRICES Fall 2007 COURSE SYLLABUS Instructor: Office: Phone: Professor Matt Holt Temporarily 632 Krannert Hall, Permanently 639 Krannert Hall Office : (but not a good way to reach me at present time) mholt@purdue.edu (a very good way to reach me!) Office Hours: Typically Tuesday and Thursday 1:15 to 2:30 p.m., or by appointment. Class Time: T-Th, 10: :45 a.m. in Wetherill (WTHR), room 160 Prerequisites: You should have successfully completed one of AGEC 220 (Marketing Farm Products), ECON 251 (Microeconomics), and STAT 305 (Introduction to Statistics) or equivalent. If you fail to meet one or more of these prerequisites please notify me immediately. It is also assumed that you have successfully completed one of MA 220, 223, or the equivalent. We will utilize some basic calculus and statistics concepts throughout the semester. In particular, we will make use of simple linear regression techniques. Required Textbooks: There is a required book, although it remains to be seen if we will make a great deal of use of it. It may therefore be possible for you to share a copy with one or more of your classmates. Goodwin, John W., Agricultural Price Analysis and Forecasting. New York, John Wiley and Sons, Overview, Objectives, and Policy: The overall objective of this course is to get you to realize that supply and demand constructs are not vacuous notions used only by economists in the context of a chalkboard in front of a classroom. That is, we can combine the basic supply-demand framework from microeconomic theory with statistical methods to learn something about the behavior of commodity prices and/or supply and demand conditions in commodity markets. We will also show how these tools can be used to forecast prices/market conditions in future. Simply put, it is my goal to review/develop basic microeconomic principles and to show you how these principles can be set to music when they are combined with appropriate statistical tools and real-world data. As such, I will require that you utilize computer programs (i.e., Excel) to do statistical and regression analysis of commodity price data. The tools you will learn in this class are used in the real world to make business planning decisions and policy choices by decision makers both in industry and government. While this course will likely not render you an expert in agricultural price analysis, it will provide you with a deeper understanding of and appreciation for the tools currently used by market analysts. Overview, Objectives, and Policy (continued):

2 As previously indicated, we may not ultimately follow the required text (or any text, for that matter) all that closely. As I complete various sections I will make the power point (ppt) slides available on the course webpage. Coverage in the text and in class will also be supplemented with homework assignments, which will focus on the more mechanical and technical aspects of the course. Again, a number of these assignments will require that you be familiar with basic functions in Excel (some of these functions will be reviewed during lecture). Attendance Policy: This is a 300-level class, and therefore it is not mandatory that attendance be taken. Even so, regular attendance at lectures is strongly encouraged! I also encourage you to participate in class discussions and to ask (relevant) questions. Studies show that grade performance in any collegiate-level course is highly correlated with attendance and participation. As an extra incentive, regular attendance and participation in class discussions may allow you to reduce the weight on your lowest midterm score in final grade calculations. See the section on Grading and Grade Policy for details. Grading and Grade Policy: Your final course grade will be determined as follows. There will be two midterm exams given during the course of the semester each of which will count for % of your grade. There will also be a comprehensive final exam that will count for 30% of your final grade. The remaining 25% will be based on several (likely between five and seven) problem sets that will be assigned throughout the semester. Finally, if you have no more than two unexcused absences during the course of the semester when calculating your final grade I will re-weight your midterms so that your lowest midterm score receives a weight of % and your best midterm will receive a weight of %. Note: Unexcused absences do not apply to test dates you must show up for both midterm exams in order to receive the attendance bonus. Finally, incompletes are only given under the most extraordinary of circumstances. The tentative dates for the exams, as well as a breakdown of the final grade components, are: In-Class Midterm Exam I (Thur., Oct. 4th) * % The grading scale is: In-Class Midterm Exam II (Thur., Nov. 15th) * % 90 A, Final Exam (To be scheduled during finals week) 30% B, Homework Assignments 25% 70 79, C, 60 69, D, < 60 well, you know! * Note: The dates for the midterm exams are, as suggested, somewhat tentative and may deviate due to the needs of the instructor and/or the class. Any missed exam must be accompanied with a verifiable written excuse complete with appropriate contact information of the person issuing the excuse (i.e., name, phone number, etc.). Makeup exams and/or early exams are generally not given (exceptions may be made if you are a bona fide student athlete); instead, my policy is to appropriately re-weight the final exam. Unless otherwise stated, homework assignments are due in class on the assigned date late assignments will not be accepted. Again, if warranted special circumstances arise so that it is not possible for you to turn in your homework when due, then your 2

3 Grading and Grade Policy (continued): remaining homework scores will be adjusted accordingly by the weight of the homework that was missed. If you feel that you were not fairly graded on a particular homework assignment or an exam, you have until the subsequent class period after the homework/exam is returned to submit to the instructor a typed request for a re-grade, carefully detailing the reasons why you think you did not receive appropriate credit. Requesting a re-grade in no way assures you of receiving additional points. During midterm exams I will allow you to bring one 3x5 note card (writing will be allowed on both sides) to assist you in any way that you see fit. For purposes of the final exam you may bring two 3x5 note cards. Academic Integrity: You may work together on homework sets, although each student must turn in her/his own original answer sheets. Even though joint work is not discouraged, I caution you against depending on each other too heavily with respect to homework assignments since independent work on homework sets is an excellent way to prepare for exams. Also, when turning in homework assignments, exams, etc. I ask that you legibly print your name. Regarding exams and other in-class exercises, University policy on academic misconduct is clear academic dishonesty in any form is strictly prohibited. Instances of academic dishonesty will be referred to the Dean of Students for disciplinary action. Penalties are severe and may include failure on the exam, quiz, paper, or project, failure in the course, and/or expulsion from the University. The risks associated with academic dishonesty far outweigh the perceived benefits. Academic dishonesty includes citing someone else s work as your own, using unauthorized crib sheets during exams, or sharing your answers with someone else. Most notably, exams are not to be treated as group discussions, and any individual or individuals suspected of doing so will be dealt with in a manner consistent with University policy and guidelines. Please see: for additional information. Lastly, if you have questions about the material being covered, your performance in the course or related concerns, please meet with me during office hours, or arrange an appointment. Do not wait until the end of the semester to do so if a problem arises. Students with Disabilities: If you have a disability that requires special academic accommodation, please make an appointment to speak with me within the first three weeks of the semester in order to discuss any adjustments. It is important that we talk about this at the beginning of the semester. Please note that University policy requires all students with disabilities to be registered with Adaptive Programs in the Office of the Dean of Students ( before classroom and/or additional accommodations can be provided. 3

4 Subject to Change Statement: Information provided in this syllabus, other than the grading, attendance, and academic integrity policies, may be subject to change with advance notice, as deemed appropriate by the instructor. Class Website: Class materials and other course-relevant information will be posted on the AGEC 305 WebCT Vista website, available at Log on to WebCT Vista by using your Purdue Career Account username and password. Check the class website frequently to keep up with important course-related information. Important Dates: Friday, August 31 st Monday, September 17 th Thursday, October 4 th Tuesday, October 9 th Thursday, November 15 th Thursday, November 22 nd Last day to drop the course without appearing on your record Last day to drop the course without a grade First Midterm (tentative date) Fall Break No Class Second Midterm (tentative date) Thanksgiving No Class Final Thoughts: While it is my goal to teach you many new, interesting, and important things about quantitative agricultural price analysis, it is also my sincere desire to make the learning environment as comfortable and as fun as possible. Technical and quantitative need not equal dry, or boring, or whatever! So relax, keep an open mind, have some fun, and be prepared to learn! Also, while much of what we will be doing in AGEC 305 is, to varying degrees, technically demanding, it is my sincere belief that most if not all of you have the intellect and the wherewithal to capably master much of the material being presented. Simply put, I believe in you, and I believe that if you are willing to put forth just a small bit of initiative that you, too, can become reasonably proficient in the methods and techniques of modern agricultural price analysis. Why do I believe this? I believe this mainly because I, too, once sat in your seat some years ago. And if someone with both an intellect and a background as limited as mine was (and for that matter maybe still is) could master the details of agricultural price analysis, indeed, could make a successful career out of it, then I am confident that you can too! 4

5 AGEC 305 COURSE OUTLINE I. Review of Supply and Demand Market Equilibrium; Price Floors and Ceilings; Quotas; The Law of Demand; Supply & Demand Shifters; Sales Taxes; Review of Supply and Demand Elasticities; the Algebra of Equilibrium II. Basic Statistical Tools and Trend Analysis Introduction to the Linear Regression Model; Review of Basic Regression Techniques; Simple Trend Analysis; Measures of Fit; Simple Hypothesis Testing and Statistical Significance; Examples and Applications in Microsoft Excel III. Consumer Behavior A. Rational Consumer Choice The Budget Constraint; Price Indices; Consumer Preferences; Marginal Rate of Substitution (discrete and calculus-based); The Best Bundle; Perfect Substitutes & Complements; Calculus-based Examples First Exam somewhere about here B. Individual and Market Demand The Price Consumption Curve; Individual Demands; The Income- Consumption Curve; Engle Curves; Income & Substitution Effects; Normal, Inferior, & Giffen Goods; Market Demand; Price Elasticity of Demand (arc and point elasticities); Elasticity & Total Expenditure, Income Elasticity of Demand (forecasting with elasticities); Cross-Price Elasticities of Demand; the Constant Elasticity Demand Curve; Statistical Estimation of Market Demand Functions with Real-World Data; Examples IV. Forecasting with Demand Models Reasons for Forecasting; Difference between Models for Forecasting and Demand Analysis; Measures of Forecast Error/Bias; Introduction to Simple Time Series Models and Price/Market Dynamics; Forecasting with Trend and with Time Series Models; Composite Forecasting 5

6 V. Supply and Producer Behavior A. Production The Production Function, Fixed and Variable Inputs; Total, Marginal, and Average Products; Average-Marginal Distinctions; The Marginal Rate of Technical Substitution; Returns to Scale; Isoquants; Examples Second Exam somewhere about here B. Costs Total, Variable, and Fixed Costs (graphical & mathematical development); Short-Run Marginal and Average Costs; The Relationship Among MP, AP, MC, and AVC; The Long-Run; LR Cost Minimization; The Expansion Path; Cost Curves & Industry Structure; Mathematical Extensions; Examples C. Profit Maximization and Perfect Competition Profit Maximization; Perfect Competition; Short-Run Supply; Short- Run Equilibrium; Long Run Supply; The Elasticity of Supply VI. Estimating Supply Equations and Misc. Issues Examples of Specifying and Estimating Supply Models; the Role of Price Expectations; Partial Adjustment Models; Functional Form 6

Economics 201 Principles of Microeconomics Fall 2010 MWF 10:00 10:50am 160 Bryan Building

Economics 201 Principles of Microeconomics Fall 2010 MWF 10:00 10:50am 160 Bryan Building Professor: Dr. Michelle Sheran Office: 445 Bryan Building Phone: 256-1192 E-mail: mesheran@uncg.edu Office Hours: