Advanced Placement Microeconomics

Transcription

1 Advanced Placement Microeconomics M. LeClerc Office Hours: M 3:40-4:10 and R 7:45-8:15 Wando High School AP Microeconomics is designed to promote understanding of economic decision-making and its factors. Using marginal analysis and understanding the concept of opportunity cost, students will learn the tools needed to make wise economic decisions as a citizen and maintain a healthy market economy. The AP Microeconomics course provides instruction in the basic concepts of economics. At the conclusion of this course, students will be able to explain, in oral and written format (text and graphically) their understanding of the principles of economics as they apply to households, firms, and the public sector. This course, taught year long, is designed to prepare students for the administration of the AP Exam in Microeconomics on Thursday May 16, All students enrolled in the class must take the AP Microeconomics exam. The major purpose of this course is to help students learn how to think in an economic way. In order to accomplish this goal, emphasis is placed on critical-thinking skills through the understanding, application, and analysis of fundamental economic concepts. Students are asked to analyze international, national, and local events and trends. Students will have frequent opportunities to generate solutions to real and hypothetical economic problems. They will employ written and oral discourse supported by graphical analysis in order to illustrate the logic of their conclusions. The course content and student requirements are similar to courses taught in universities and colleges. Students are expected to play a major role in their own learning. This means that students are expected to come to class prepared (having done the reading assignments as well as the homework exercises). Microeconomics The Course Microeconomics introduces students to the cost benefit analysis that is the economic way of thinking. This analysis is used to understand smaller segments of the economy, specifically, consumers and producers, as they interact in output markets and resource markets and government s impact on these specific economic units. A well-designed AP course in Microeconomics introduces students to the cost benefit analysis economic way of thinking. This analysis is used to understand the role of consumers, producers, and how they interact in the various markets. This course includes the government s impact on the consumers and producers. Certain topics are usually covered in all college courses. The following is a discussion of these topics. Goals Students successfully completing this course will: Know basic economic concepts and understand economic decision-making factors, such as marginal analysis and opportunity costs Understand the nature and functions of product markets: supply and demand model, consumer choice, production and costs, and market structure. Understand factor markets. Understand market failure and the role of government in correcting market failure. Be able to generate charts and graphs to describe economic concepts Be able to analyze and interpret charts, graphs, and data to describe economic concepts. To help students meet these goals, the course should cover the following topics. (Source: Topics I. Basic Economic Concepts The study of microeconomics requires students to understand that, in any economy, the existence of limited resources along with unlimited wants results in the need to make choices. An effective AP course, therefore, begins by introducing the concepts of opportunity costs and trade-offs, and illustrates these concepts by using the production possibilities curve or

2 other analytical examples. The course can then proceed to a consideration of how different types of economies determine which goods and services to produce, how to produce them, and to whom to distribute them. It is also important that students understand why and how specialization and exchange increase the total output of goods and services. Students need to be able to differentiate between absolute and comparative advantage, to identify comparative advantage from differences in opportunity costs, and to apply the concept of comparative advantage, in order to determine the basis under which mutually advantageous trade can take place between countries. Specific examples from actual economic situations can be used to illustrate and reinforce the principles involved. The importance of property rights, the role of incentives in the functioning of free markets, and the principle of marginal analysis should be highlighted. II. The Nature and Functions of Product Markets The study of the nature and functions of product markets falls into four broad areas: supply and demand models, consumer choice, production and costs, and theory of the firm. A well-planned AP course requires an analysis of the determinants of supply and demand and the ways in which changes in these determinants affect equilibrium price and output. In particular, the course helps students make the important distinction between movements along the curves and shifts in the curves. The course also emphasizes the impact of government policies, such as price floors and ceilings, excise taxes, tariffs, and quotas on the free-market price and quantity exchanged. The concepts of consumer surplus and producer surplus should also be introduced. Students are expected to comprehend and apply the concepts of elasticity, including calculating price, cross-price, income elasticities of demand, and the price elasticity of supply. The next area covered in the course is the theory of consumer choice. Students should gain an understanding of the basic postulates underlying consumer choice: utility, the law of diminishing marginal utility, and utility-maximizing conditions, and their application in consumer decision-making and in explaining the law of demand. By examining the demand side of the product market, students learn how incomes, prices, and tastes affect consumer purchases. Here it is important that students understand how to derive an individual s demand curve, how individual and market demand curves are related, and how the income and substitution effects explain the shape of the demand curve. The third area covers production and cost analysis both in the short run and in the long run. This section begins with an introduction of the short-run production function, describing the relationship between the quantity of inputs and the quantity of output. Within the context of the production function, students should understand average and marginal products as well as the law of diminishing marginal returns. Students learn the link between productivity and costs, and examine the relationships among the short-run costs: total, average, and marginal. With an introduction of the concept of cost minimization, this section also includes a discussion of long-run costs and an examination of economies and diseconomies of scale, as well as returns to scale. The fourth area covers the behavior of firms in different types of market structures. This section begins with the definition of profits and making the distinction between accounting and economic profits, and establishing the profit-maximizing rule, using marginal analysis. In covering perfect competition, the course focuses on determining short-run and long-run equilibrium, both for the profit-maximizing individual firm and for the industry, and on the equilibrium relationships among price, marginal and average revenues, marginal and average costs, and profits. Students should understand the adjustment process to long-run equilibrium. In considering the market behavior of a monopolist, students identify and examine the sources of monopoly power and understand the relationship between a monopolist s demand curve and its marginal revenue curve. Students learn how a monopoly s total revenue changes along its demand curve as price varies. Having learned the behavior of monopolies and perfect competition, students should compare a monopolist s price, level of output, and profit with those of a firm operating in a perfectly competitive market. By paying particular attention to the concept of allocative efficiency, students learn how and why competitive markets achieve an efficient allocation of resources, whereas monopolists do not. The concept of deadweight loss is a good device to show the efficiency loss due to monopoly. The model of price discrimination provides another dimension of monopoly behavior that students need to learn and understand. In covering oligopoly, the course stresses the interdependency of firms and their tendency to collude or to form a cartel. With a simple payoff matrix, the basic game-theory model should be used to enhance a student s understanding of the interdependent behavior of firms in an oligopolistic market and identification of dominant strategies. Finally, the course considers the market structure of monopolistic competition and highlights the importance of product differentiation and the role of advertising in the behavior of firms. The course then proceeds to examine firm behavior in the short run and in the long run, and the existence of excess capacity and its implication for efficiency.

3 III. Factor Markets In this section of the course, students also apply the concepts of supply and demand to markets for factors such as labor, capital, and land. Students analyze the concept of derived demand, understand how a factor s marginal product and the marginal revenue product affect the demand for the factor, and consider the role of factor prices in the allocation of scarce resources. When the markets for different factors are considered separately, most attention should be given to the labor market, particularly labor supply and wage and employment determination. Although the course may emphasize perfectly competitive labor markets, the effect of deviations from perfect competition, such as minimum wages, unions, monopsonies, and product market monopolies, can also be considered. The principles studied in the analysis of the labor market should be applied to the markets for land and capital to explain the determination of economic rent and the price of capital. By studying the determination of factor prices, students gain an understanding of how the market determines the distribution of income and the sources of income inequality in a market economy. IV. Market Failure and the Role of Government It is important for students to understand the arguments for and against government intervention in an otherwise competitive market. Students examine the conditions for economic efficiency, using the marginal social benefit and marginal social cost principle, and the ways in which externalities, public goods, and the market distribution of income create market failures even in competitive free-market economies. In addition, students are expected to study the effectiveness of government policies such as subsidies, taxes, quantity controls, and public provision of goods and services, which are designed to correct market failures and achieve economic efficiency. It is also important both to emphasize that monopolies can cause market failures when they use their market power to engage in behavior that restrains competition and to examine the government s attempt to solve such problems by using antitrust policy and regulations. Although there is not a generally accepted standard for judging the equity of an economy s income distribution, a well-designed course will incorporate key measures of income distribution (Lorenz curve and Gini coefficient) and examine the impact of government tax policies and transfer programs, both on the distribution of income and on economic efficiency. Words of Brilliance.... There s no such thing as a free lunch. - Milton Friedman There is nothing so disastrous as a rational investment policy in an irrational world - John Maynard Keynes Man is an animal that makes bargains: no other animal does this - no dog exchanges bones with another. - Adam Smith- I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said. - Alan Greenspan Unsustainable situations usually go on longer than most economists think possible. But they always end, and when they do, it's often painful. - Paul Krugman Requirements Understand from the beginning that there is extensive reading; you must complete it in advance of the material presented in class!!!!!! By reading each day s assignment before coming to class, the presentation and discussion for that day will mean more to you, and you will find it easier to take notes and ask questions. Solving economic problems and analyzing graphs are also major components of the course. You will need to complete all homework problems on your own unless the directions state otherwise. To insure success and understanding, you must go beyond simply reading the assignment; you must own the material, be able to explain it to a class mate or your parents. Utilize the textbook website to compliment readings ( Time constraints and college course preparation strategy will not allow for classroom explanation of all major points, themes, concepts, and ideas contained within the materials you will read. Because of this, I suggest that you take notes from your reading and/or graphically organize your learning. There may be quizzes to conclude each chapter. There will be tests after every unit of study. There will generally be a homework assignment due for every chapter. Every test will be written in the same format as the AP exam: multiple

4 choice sections will consist of questions in 46 minutes. You will have one to two free response questions (FRQs) to be composed in 30 minutes for each test. You will have a final comprehensive examination to conclude the course. Modifications may occur as necessary. Course Texts and Reading Materials Anderson, David A. Economics By Example. New York: Worth Publishers, Economics U$A. Video series Mankiw, N. Gregory. Principles of Economics. 3 rd edition. Mason, Ohio: Thomson South-Western, McConnell, Campbell R. and Stanley L. Brue. Economics: Principles, Problems, and Policies. 15 th edition. New York: McGraw-Hill Irwin, Morton, John S. and Rae Jean B. Goodman. Advanced Placement Economics. 3 rd edition. New York: National Council on Economic Education, Websites AP Central: Class webpage: McConnell and Brue 15 th edition student site: Mankiw 3 rd edition student site: National Council on Economic Education: Refdesk.com: Resources for Economists on the Internet: Reffonomics: **Various articles and handouts from internet and other sources in the public domain Grading Scale A B C D Below 70 F Grading Grading Matrix Tests 50% Reviews 50% In addition, there will be a final exam which will account for 20% of the course grade. Assignments Tests 50% Tests Tests will be administered at the conclusion of each unit. Your test will be 30 to 45 multiple choice and 1 or 2 free responses. Remember, you will have only five days to make up a test following an absence. However, I encourage you to make the test up ASAP to help you from following behind. If you are out of school preceding a test, you still must take the test on the test day. A cumulative final exam will be given in May. Projects We will undertake two major projects this year. In the fall, study groups will be responsible for a supply and demand project. Each group will develop a fictional product, and each group will use current economic indicators to make a presentation to the board concerning the current supply and demand graph. Students will be responsible for creating and analyzing a supply and demand chart. In the spring, every student will be responsible for a budget project. Every student will choose a career and a location to live. Based on those decisions, research will be conducted to create a household budget. Details on projects will be forthcoming.

5 Reviews 50% Homework Expect at two to three hours of reading each week, and budget time to work on assigned problems. Expect at least one homework assignment consisting of Economic problems for each unit of study. These problems provide an opportunity to practice and master the content. You must turn in your homework at the beginning of class unless it is graded in class. Assignments that are turned in late will count off 20 points a day. All assignments must be done individually unless otherwise stated. Quizzes Expect reading quizzes to be given on a regular basis. The quizzes may cover the textbook, reader, or any assigned outside readings. Pop quizzes will be given before class discussions on the topic(s) and scheduled quizzes will be given at the conclusion of each chapter. Quizzes may be multiple choice, short answer, short essay, or graphs (generated or analysis). Teaching Strategies Drill and Practice Economic problems will be assigned in class and for homework to offer an opportunity to practice economic concepts covered in class and in the reading. There will also be practice with analyzing graphs and creating graphs. Students will practice creating graphs daily for bell work. Free Response Questions Students will be assigned free response questions to work on in class. Often these assignments will be group assignments. Sometimes you ll be asked to answer the free response questions, grade examples of free response answers, or develop a rubric for the given free response questions. These questions will also be included on all tests, and some quizzes. Reading quizzes Quizzes will be given at the beginning and end of most chapters. The quizzes at the beginning are to hold you, the student, accountable for the assigned reading. The concluding quizzes are a measurement used to help determine mastery of the content. Based on those scores, re-teaching may need to be scheduled. Simulations Students will participate in numerous economic simulations throughout the course. The goal is to apply the economic concepts covered in the reading and the class. Socratic Seminar Seminars allow for discussions to be student-centered instead of teacher-centered allowing an opportunity for students to become more engaged. Discussion Leaders In groups, students will be assigned a chapter to lead the class discussion for review before the AP exam. Students are responsible for leading a discussion that goes beyond summarizing the textbook. The goal is pose questions to stimulate thoughtful discussion among everyone in the class. Technology Technology is always evolving in the classroom. Notebook software will be utilized in the classroom the quiz students during class discussion or lecture. Multimedia presentations will be developed by the teacher to teach economic concepts. Students will use the class webpage to access needed online resources, the class wikipage will provide a forum to continuing class discussions online, and the class Edmodo website will provide a social learning platform. Study Tips The 10 Steps to Success listed below are given the Princeton Review s Cracking the AP: Economics Macro & Micro Exams. Following these 10 steps will help all students be successful in the class 1. Take notes from the book. 2. Use colored pens and rulers for clarity. 3. Summarize what you ve learned. 4. Draw all of the graphs, complete with proper labels, until you know them by heart. 5. Work all the problems you can find. 6. Work together in study groups to attack difficult problems. 7. Read the textbook before class.

6 8. Take good notes in class. 9. Ask questions in class about the textbook, homework, and lecture. 10. Visit your teachers after class for answers to any remaining questions. Procedures Make-Up Work Make-up work is the student s responsibility. Make-up work is due within five (5) days of the student s return. If the student has a readmit slip which shows the absence as lawful or excused, the teacher will give the student all missed work and schedule a time to make-up graded work such as tests, etc. If the student has no note, the teacher will give the student the missed assignments and will schedule the time for the graded make-up work (test, quiz, etc) no sooner than the fourth day after the student returns in order to know the reason/cause for the absence. If the student fails to bring a note by the third day after he/she returns from an absence, the teacher will proceed with the graded make-up work, but it is established that the student can receive a maximum grade of only 61. If make-up work is never completed, student will receive a grade of 0. Students should discuss immediately any extenuating circumstances with the teacher. Late Assignments If you have a problem with a due date, speak with the teacher in advance. Late assignments will be accepted one day late with an automatic twenty point deduction. No late work will be accepted after the assignment has been returned to the class. Class Rules Come to class on time, prepared, and ready to work when the bell rings. Follow directions the first time they are given. Keep the classroom clean. Raise hand and wait to be recognized before speaking. Wear student ID at all times. Cell phone cannot be operational or visible at any time. Consequences Disciplinary Infractions: 1 st offense = warning 2 nd offense = 30 minute before/after school detention, teacher/student conference 3 rd offense = 30 minute before/after school detention, parent contacted 4 th offense = referral to assistant principal Severe offense = immediate referral to assistant principal Procedural Infractions: No identification card Student must purchase a new card from ID office. Tardy to class Tardy policy will be enforced. Internet Infraction Student will not be allowed to complete assignment. Academic Infractions: Cheating/Plagiarism 0 grade, parent notification Attendance Policy Economics is a required course for graduation in the state of South Carolina. Credit for the course shall be denied if a student does not meet the attendance requirement. Refer to the Student Agenda.

7 Unit 1: Basic Economic Concepts Course Outline 20 days Key Topics: Scarcity, Choice, Opportunity Cost, PPF, Basic Marginal Benefit/Marginal Costs Analysis Readings: Mankiw, Principles of Economics, Chapters 1-3 Unit 1 test: September 12-13, 2012 Unit 2: Supply and Demand 25 days Key Topics: Demand, Law of Diminishing Marginal Benefits, Supply, Consumer and Producer Surplus, Consumer Choice/Optimal Purchase Rule, Allocative Efficiency, Deadweight Loss, Elasticity, Total Revenue Test, Price Discrimination, Price Floors and Ceilings, Efficiency versus Equity Readings: Mankiw, Principles of Economics, Chapters 4-8 Unit 2 test: October 17-18, 2012 Unit 3: Costs and Revenues 24 days Key Topics: Law of Diminishing Marginal Returns, Economies of Scale, Costs (fixed, variable, marginal), Cost Curves (relationships between curves), Total and Marginal Revenues, Profit and Loss (MR/MC and TR/TC), Break-Even, Shut Down, Economic Profit versus Normal Profit Readings: Mankiw, Principles of Economics, Chapter 13 Unit 3 test: November 29-30, 2012 Unit 4: Perfect Competition 14 days Key Topics: Assumptions, Relationships between Industry and Firm, Profit Maximization, Long-Run Equilibriums, Short-Run Equilibriums and the Adjustment Mechanism, Allocative Efficiency Readings: Mankiw, Principles of Economics, Chapter 14 Unit 4 test: December 19-20, 2012 Unit 5: Imperfect Competition 30 days Key Topics: Relationship Between Price and MR, Barriers to Entry, Profit Maximization, Monopoly, Regulation, Natural Monopoly, Oligopoly and Duopoly Game Theory with Game Tree and Payoff Matrix (dominant strategy, Nash Equilibrium, collusion, prisoner s dilemma, interdependence), Collusive Oligopoly, Monopolistic Competition (long run and short run) (Note: In each imperfectly competitive market structure, examine its effect on allocative efficiency and consumer and producer surplus, and make comparisons to perfect competition. Readings: Mankiw, Principles of Economics, Chapters Unit 5 test: February 14-15, 2013

8 Unit 6: Factor Markets 19 days Key Topics: Factors of Production (review definitions of marginal revenue, marginal product, the law of diminishing marginal returns), Derived Demand, Marginal Revenue Product Analysis, Optimal Purchase Rule, Perfectly Competitive Factor Markets, Profit Maximization/Cost Minimization Rules, Monopsony, Economic Rent, Distribution of Income Among Factors, Unions Readings: Mankiw, Principles of Economics, Chapters Unit 6 test: March 14-15, 2013 Unit 7: The Role of Government 20 days Key Topics: Role of Government, Public versus Private Goods, Marginal Social Cost/Marginal Social Benefit Analysis, Market Failures, Positive and Negative Externalities, Taxes, Free Riders, Tragedy of the Commons Readings: Mankiw, Principles of Economics, Chapters Unit 7 test: April 18-19, 2013 Review for AP Exam 18 days Exam date: Thursday May 16, 2013 (12 noon) ****Calendar subject to change****