Economics 1 A20030 Course Description Prof. Anna Della Valle TA Andrea Venegoni Winter/Spring 2020 Course Description: This course gives students a solid foundation in microeconomic theory and its applications. In doing so, the course seeks to help students develop a clear, useful and open-minded way of thinking about microeconomic concepts. Students completing this course will learn: (1) The fundamental principles and theories of microeconomic analysis (2) Application of those theories through problem solving using algebraic, geometric and graphing tools. (3) Presentation and discussion of real-world applications of microeconomic theories to market structure, firm strategies and public policy matters. Course Content: The course will cover the main areas of microeconomic theory: (1) Key economic concepts: opportunity cost, incentives, marginal analysis (2) How markets work: the demand supply model, market equilibrium, elasticity, economic welfare, impact of price ceilings/floors, subsidies, taxation on the market outcome (3) An introduction to theory of the firm, producer and consumer theory (4) The 5 market models (5) Rationale for and forms of government intervention into markets The course will make extensive use of real-world examples to illustrate and analyze these theories and their applications, including: • Estimating elasticity of demand in the US cigarette market • Effect of OPEC cartel strategy on profitability in the world oil market • Prices that are “too low”: agricultural subsidies and the WTO debate. • Zegna, Ferrero, Armani and Illy’s decision to remain privately held • Game theory applied to the movie industry: from phenomenal success to huge losses • US and EU price fixing cases: vitamins, beer, flat screens. • Antitrust: Microsoft, Intel suits • Italian privatization in the 1990s: from telecom to tomatoes Course materials: Textbook: N. Gregory Mankiw and Mark P. Taylor, Microeconomics, 4th edition, 2017, Cengage Learning . Earlier editions also fine. Posted materials: In addition to the assigned chapters in the textbook, students are required to read the lecture notes, lecture slides, sample problems, newspaper and journal articles, data and video links posted on the Moodle platform for this course in a timely manner in order to participate actively in class dialogue and debate. Course Prerequisites: This is an introductory course in microeconomics and requires no prior background in economics. However, enrollment in the course requires the following basic math prerequisites: computational skills, basic algebra (solving linear equations), geometry (areas of simple geometric figures) and graphing skills (plotting linear equations, finding intercepts, calculating slopes). To this end, students enrolled in Economics I are required to enroll in and successfully complete Mathematics for Business, Economics and Finance A86003. Course lectures and tutorials: The course will follow a lecture + tutorial format. Each week will include a 3 hour class lecture conducted by Prof. Della Valle + 1.5 hour class tutorial conducted by our TA Andrea Venegoni. The purpose of the tutorial is to review the current week’s lecture material, solve sample problems and answer students’ questions. Course grading: Weekly problem sets 20%: Problems sets will be assigned each week to help students review and practice the current week’s lecture material. Problem sets are due at the beginning of class a week after they are assigned and should be handed in to Prof. Della Valle for grading by the teaching assistant. Answers to the problem sets will be posted on the course Moodle platform on the due date. Therefore, late problem sets cannot be accepted for grading. Students should form study groups of 4 students to work on the problem sets and hand in a single problem set for the group members. Collaboration on the problem sets can be a very useful way of learning the course material and solving the problems but it is important that each student understand how to solve the problem sets independently. Students who do so invariably do well on the midterm and the final and get a good grade in the course. The answers to the problem sets may be typed or hand-written but, in the latter case, please make sure your handwriting is clearly legible. The TA will not grade the answers if he cannot read them. Graded problem sets will be handed back to students by the TA in tutorials. Any questions, clarifications or complaints regarding the grading of the problem sets should be referred to the teaching assistant. Midterm exam 40%: The midterm exam will be held during class time on Wednesday April 8 and will cover the material from the first half of the course. Final exam 40%: The final exam will cover material from the second half of the course. Schedule: Lectures: Wednesday 10-13 Tutorials: Thursday 14-15:30 Office hours Prof. Della Valle: Wednesday 13-14; Andrea Venegoni: Friday 14-15:30 Email: adellavalle@liuc.it; avenegoni@liuc.it Attending students: Attending students are strongly urged to take the final exam (covering the second part of the course) on the first available exam date following the end of classes (primo appello) when all of the course material is fresh in their minds but may choose to take the exam on the second available exam date (secondo appello). Beyond those dates, students who have not completed the course requirements will have to take a total exam covering all the course material and worth 80% of the course grade. Note: if a student takes the final exam in primo appello they cannot retake it in secondo appello. They will have to take the total exam beyond the first appello date. Non attending students: Due to the nature and structure of this course, students are strongly discouraged from following this course if they cannot attend classes. That said, non-attending will be required to take a three-hour non-attending student exam which will be based on comprehensive knowledge of the following: 1. All of the material (lecture slides, notes, problem sets and readings) posted on Moodle platform for the course. 2. The contents of the textbook chapters indicated in the course syllabus. 3. Ability to argue and discuss real world applications of microeconomic theory through case studies and examples. The exam for non-attending students will be in the form of an in-class 3 hour written exam. Note: Almost all second year erasmus programs abroad require successful completion of Microeconomics 1 as a prerequisite in order to enroll and follow their courses.