THIS COURSE IS A PROFESSIONALLY RELATED COURSE, NOT ELIGIBLE FOR LIBERAL STUDIES CREDIT (EXCLUSION: C/ECN 110).

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1 RYERSON UNIVERSITY DEPARTMENT OF ECONOMICS CECN 104-FA0 INTRODUCTORY MICROECONOMICS 2005 THIS COURSE IS A PROFESSIONALLY RELATED COURSE, NOT ELIGIBLE FOR LIBERAL STUDIES CREDIT (EXCLUSION: C/ECN 110). Instructor: David M. Cape Phone: cell dcape@ryerson.ca Office: None Hours after class or by appointment Personal Web Page: (not maintained) Skeleton lecture notes, assignments and grades will be available on Blackboard at COURSE DESCRIPTION C/ECN 104 and C/ECN 204 (Introductory Macroeconomics) attempt to give a basic understanding of the organization and structure of the Canadian economy. These introductory courses introduce the basic tools of economic analysis and show how they can be used to analyse specific economic issues and problems. ECN 104 Economics: Introductory Micro-economics Lect: 3 hrs. This course is concerned with basic concepts of demand and supply, the theory of the firm, and distribution of income. It includes a study of business behaviour and decision making under various market conditions: pure competition, oligopoly, monopolistic competition, monopoly. An equivalent course is COCR 950 (PR) ECN 204 Economics: Introductory Macroeconomics Lect: 3 hrs. This course centres around an explanation of levels of national income, employment and prices, the business cycle, factors affecting economic growth and international trade. It also includes a critical analysis of monetary and fiscal policies designed to achieve the established goals. An equivalent course is COCR 951 (PR) REQUIRED TEXT (Available in the Ryerson Bookstore): McConnell, C.R., Brue, S.L., and Barbiero, T.P., Microeconomics, 10th Canadian Edition, McGraw-Hill Ryerson Limited, OPTIONAL STUDY GUIDE (Available in the Ryerson Bookstore): Walstad, W.B., Bingham, R.C., and Andersen, T., Study Guide to Accompany Microeconomics, 10th Canadian Edition. COURSE OUTLINE I Introduction 1. How to study 2. Ten key concepts. 3. Economic perspective 4. Economic methodology 5. Micro and Macro 6. Pitfalls to Objective Thinking CECN 104 Prof. Cape Page 1 of 5 4/17/2005

2 7. Graphs and their meaning Reference: Chapter 1 (including Appendix), II The Economic Problem: Scarcity, Wants, and Choices 1. The foundation of economics 2. Efficiency: (a) Getting the most from available resources (b) Production possibilities: international trade aspects, and implications 3. Unemployment, growth, and the future 4. Economic systems pure capitalism, communism, and other. 5. The circular flow models simple and complex Reference: Chapter 2, and pp. 91, and 97. III Individual Markets 1. Demand defined shifts vs. changes 2. Supply defined: shifts vs. changes 3. Market equilibria: definition and mathematics 4. The math Reference: Chapter 3 IV The Market System and International Trade 1 Characteristics of the market system 2. The market system at work 3. Market failure i. Spillovers ii. Public goods iii. Quasi Public Goods iv. Recycling Reference: Chapters 4 (Sections only) and 17 (pp , ) *** Test #1 to this point. May.17 *** V&VI Elasticity and Further Topics in the Theory of Consumer Demand 1. Price elasticity of demand 2. The total revenue test 3. Price elasticity of supply 4. Cross elasticity of demand 5 Income elasticity of demand 6 Consumer & producer surplus 7 Applications of supply and demand analysis -price ceilings and shortages: wage and price controls, rent controls, credit card interest ceilings, rock concerts -price floors and surpluses: minimum wage, agricultural price supports -the foreign exchange market -tax incidence 8. Consumer Choice and Utility Maximization 9. Indifference curve analysis and derivation of demand Reference: Chapters 5, 6 (Sections 6.1, 6.4, 6.5 and Appendix), 18 pp only CECN 104 Prof. Cape Page 2 of 5 4/17/2005

3 VII The Costs of Production 1. economic costs - explicit and implicit costs - normal profit 2. economic profit versus accounting profit 3. the law of diminishing returns 4. short-run production costs 5. long-run production costs 6. economies and diseconomies of scale Reference: Chapter 7 (Omit section 7.1) VIII Pure/ Perfect Competition 1. characteristics of the four basic market models 2. concept and occurrence 3. demand and revenue 4. profit maximization: short-run; long-run 5. evaluation of pure/perfect competition Reference: Chapter 8 IX Pure Monopoly 1. characteristics 2. monopoly price and marginal revenue 3. profit maximization 4 economic effects of (single price) monopoly, incl. deadweight loss 5 price discriminating monopoly 6 regulated monopoly Reference: Chapter 9 Xa Imperfect Competition:-(a) Monopolistic Competition 1. characteristics 2. demand, pricing and profit maximization - short-run; long-run 3. monopolistic competition and economic efficiency 4. non-price competition Reference: Chapter 10 (Sections 10.1 and 10.2) * * * Test #2 to this point (Test #1 material not explicitly tested in Test #2) June 07*** Xb Imperfect Competition: (b) Oligopoly 1. characteristics, underlying causes and behaviours. 2. four oligopoly models: collusive (cartels and price leadership), and noncollusive (game theory and kinked demand) 3. OPEC and the world oil market 4. oligopoly and advertising 5. oligopoly and efficiency Reference: Chapter 10 (Sections ) XI Competition Policy and Regulation 1. industrial concentration 2. anti-combines legislation 3. social regulation Reference: Chapter 12 (Skip pp ) CECN 104 Prof. Cape Page 3 of 5 4/17/2005

4 XII The Pricing of Economic Resources 1. significance and complexities of resource pricing 2. derived demand revisited:-marginal productivity theory of resource demand 3. determinants of resource demand 4. wage determination Reference: Chapters 13, 14 (Sections only). NOTE: Some of the topics in this course outline are optional and may be omitted, at your instructor's discretion. STUDENT EVALUATION: 1. Online learning quizzes (BOTH Pre-and Post-) Chapters 2, 3, 5, 8, 9, 10 only, 1 mark for each 80% result submitted to me no later than 23:59h the day before the relevant tests NO EXTENSIONS!. Submit to: dcape@ryerson.ca directly from the McGraw Hill website. (Send copies to yourself as well, just in case...) Chapters 2 and 3 by May 16 th ; Chapters 5, 8, and 9 by June 06, and Ch. 10 June 15, 12% 2. First term test: 22% Tuesday May 17 th (9:15-10:15 lecture follows at 10:30) 3. Second term test: 22% Tuesday, June 07 (9:15-10:15 lecture follows at 10:30) 4. Final exam 44% Thursday June 16 (9:15-11:15) Test format: 26 Multiple choice (no correction factors-scanner sheet provided), short answers and calculations. 18 marks worth, Simple calculator and HB pencil required. Final Exam format: 35 multiple choice 2 marks, plus 6 of 10 short 5 marks. Simple calculator and HB pencil required. INSTRUCTOR COURSE EVALUATION: will occur in the last two weeks of the course, as determined by the C.E. Division. Class Attendance You are expected to attend class regularly, arriving on time. The course instructor has the right to refuse admission to students who come late to class. The course instructor is not obliged to brief, re-instruct, notify, refresh or otherwise serve students who fail to attend scheduled classes. Instructors do not provide notes about what students may have missed. Instructors are free to make announcements in class - orally - about assignments and other course matters as long as the overall evaluation scheme on the course outline is respected. Students who miss class carry the entire responsibility of learning what they have missed: obtaining notes, if desired, from others; doing required work; and in general fulfilling any obligations set forth in the class missed. Students who expect to miss class for a substantial period of time are expected to consult the Chair of the Economics Department. For information on other Economics courses and on Department of Economics policies re: essays, assignments, missed tests, etc. see CECN 104 Prof. Cape Page 4 of 5 4/17/2005

5 Lecture schedule Date Class No. Topic. 3-May 1 Intro, and Lecture Unit I 5-May 2 Lecture Unit II 10- May 3 Qns from Unit II and Lecture Unit III 12- May 4 Qns from Unit III and Lecture Unit IV 17- May 5 1st Test 9:15-10:15; LectureUnit VIa 10:30-11: May 6 Take up 1st test and Lecture Unit VIb 24- May 7 Lecture Unit VII 26- May 8 Qns from Unit VII and Lecture Unit VIII 31- May 9 Qns from Unit VIII and Lecture Unit IX 2-Jun 10 Qns from Unit IX and Lecture Unit Xa 7-Jun 11 2nd Test 9:15-10:15; Lecture Unit Xb 10:30-11:45 9-Jun 12 Take up 2nd test and Lecture Unit XI 14-Jun 13 Lecture Unit XII and course review 16-Jun 14 Final Exam 9:15-11:15 CECN 104 Prof. Cape Page 5 of 5 4/17/2005

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