Introduction

When I was asked to teach Principles of Microeconomics, my first instinct was to get copies of all the Principles textbooks that I could lay my hands on. So I did. And I didn't enjoy them: they sent me to sleep. Don't get me wrong, some of them are very good at what they do. But I didn't really like what they set out to do.

You see, Principles textbooks teach a subject matter. In these books, microeconomics is the study of individual markets, firm behavior and consumer behavior; macroeconomics is the study of the economy as a whole. These books seemed to me to miss the point. Economics is not a subject matter. It is a way of thinking. It is a moral philosophy. And if everyone in the world thought like an economist, the world would be a much happier place.

Economics is a way of thinking about every aspect of life. Of course we want to know how Proctor and Gamble chooses what to produce, how much to produce, and what price to sell at. Of course we want to understand how consumers decide what to buy, how much to buy, and what they are willing to pay. But the same tools that enable us to understand these issues, also enable us to understand

among many other questions of life.

Economists, unlike politicians, religious leaders, philosophers, and just about anyone else, have a clear moral philosophy. We employ a small but precise set of criteria by which we judge whether people's actions are good for themselves and good for others. We use exactly the same criteria to assess whether government's actions are good for society. Economists are precise about when we can use these criteria to state that one outcome is superior to another. Economists are equally precise about when two outcomes cannot be ranked, and we don't invent ad hoc philosophies to fill in the gaps.

My job is to get you to think like an economist. If I succeed, you will be a smarter, happier, and more moral person, and the world will be a better place. If I fail, you can continue your business studies program none the wiser.

Textbooks

The text is available on this web site, and can be printed chapter by chapter in each section.

The following slim book is recommended:

Steven Landsburg (1995): Armchair Economist: Economics And Everyday Experience (paperback; approx. $11 from Amazon).

Text chapter for this section

Class Attendance and Exams

Class meets Tuesdays and Thursdays from 3:30pm to 4:45pm in GL 100B.

My job is to make class attendance worthwhile and interesting. It's your decision whether or not to attend. But I have an incentive scheme. There will be four open-book in-class exams. The dates will not necessarily be announced in advance. The best two of your in-class exams will account for 50%, or the best three will account for 75%, of the grade, depending on what you decide to do about the final.

Two versions of the final exam will be offered. Both are 1.25 hours in duration, both are comprehensive and open-book. The first version will be given in the final class period, Thursday, 17 April. The second version will be given during exam week. Here is how they will be scored:

1) If you only show up to take the first final exam, that will count for 25% of the grade, and your best three mid terms will count for 75% of the grade.

2) If you only show up to take the second final exam, that will count for 25% of the grade, and your best three mid terms will count for 75% of the grade.

3) If you take both final exams, the total score will count for 50% of your grade and the best two mid terms will count for 50%.

It is your choice what you do. Your optimal choice is an interesting economic problem, and by the end of the semester you will have the tools to solve it yourself. But here is the deal: I will not discuss the answers in general or your answers to, or performance in, the first exam before the second exam has been given.

No make-ups on the in-class exams will be permitted. If health or other events prevent you from taking an exam, you must contact CAS's Assistant Dean for Student Affairs. I will only respond to requests for a make-up received directly from the Dean's office.

Grading

Most of the sections of this course have short problem sets, which can be found at the end of each chapter in the lecture notes. You are expected to complete these in the same week that we cover the material. However, I will not be collecting problem sets, and I will not be grading them. You may meet with me or the TA to discuss if your answers are on the right track. There is an important incentive for you to stay on top of this material: the exams will consist largely of close variations of these questions. If you do not seriously attempt the problem sets in a timely fashion, you will almost certainly fail the course. On the other hand, if you take the problem sets seriously, you will likely get a very good grade.