WAYLAND BAPTIST UNIVERSITY DIVISION OF BUSINESS

COURSE: ECON 2308-SA01, PRINCIPLES OF MICROECONOMICS. Summer 2008. San Antonio Campus.

Instructor:	Mr. Gary L. Moon
Office:	None.
Office Phone:	(210) 945-4943
Home Phone:	(210) 945-4943
Email:	moonecon@satx.rr.com
Course Web Site:	None
FAX:	WBU Main Campus: (210) 826-5699
Office Hours:	Anytime. Email always open! I can almost always make your time, my time.
Class Hours:	Thursdays, 6:00pm – 10:10 pm
Class Location:	WBU Main Campus, Room 115 [11550 IH-35 North, San Antonio]

DESCRIPTION: A one semester course covering microeconomic analysis of the economic behavior of firms, industries and households; allocation of resources through the price system under varying degrees of competition; examination of economic effects of wages, rents, interest, and profits on societies; and application of principles to current economic problems. Credit will not awarded for ECON 2308 (Principles of Microeconomics) and ECON 4346 (Survey of Economics).

PREREQUISITE: Successful completion of ECON 2307’s Principles of Macroeconomics is a prerequisite for enrollment in ECON 2308’s Principles of Microeconomics. Therefore, NOTE in the Schedule for Class Work below, I presume we can cover Chapters 1-6 in the Textbook during our first meeting!

TE TEXTBOOK: Gregory N. Mankiw (Harvard University), Principles of Economics, 4th Edition, Thomson South-Western Publishers, 2007 (ISBN: 0-324-22472-9). We will focus on Chapters 1 thru 6 in review, then Chapters 7-22 during the remainder of the course. Supplementary materials that may help include:

à Textbook’s website: http://mankiw.swlearning.com. This support site links chapter to PowerPoint slides, other economics-related Internet sites for papers, economic indicator data, and best of all—career listings after graduation. à American Psychological Association. (2001). Publication of the American Psychological Association, 5^th Edition. Washington, DC. (ISBN 1-55798-791-2). This is the how-to-write-a-paper source used by all businesses and WBU.

OUTCOME COMPETENCIES: Upon completion of the microeconomics course, undergraduate students will apply an understanding of economic principles and policies involving supply and demand mechanisms to develop a Pro-Con reasoning and analytical sense for explaining the global mystery—why do things cost as they do. Students will explain how and why societies behave characteristically in resolving conflicts relating resource markets to product markets using analysis of the economic effects of different market structures and their competitive strategies. By course’s end, students will use mathematics, graphics and models to portray how societal wages develop and income is distributed to Haves and Have Nots.

Specifically, students will be able to:

● Discuss basic tradeoffs faced by people (consumers) and firms (investors) making allocation choices among scarce resources. Understand and appreciate the essence of the sage advice: there are no free economic goods.

● Explain and apply the concept of opportunity cost. Understand and draw the circular flow diagram of how money and products flow through the economy, linking the processes to the drawing and explaining general Production Possibilities Frontiers (PPF) for an economy. Peacefully expand the PPF using the Law of Comparative Advantage to exploit free trade.

● Draw and understand the general representation of price/supply and price/demand relationships; then explain the causes and predict the effects of changes in demand and supply on equilibrium price/quantity.

● Analyze competitive market supply/demand forces of price sensitivity (elastic) and price insensitivity (inelastic) on equilibrium prices and quantity; then expand to impacts of arbitrary government policies of price ceilings and floors. Finish with showing who pays the burden and incidence of tax increases, as seen through political and economic eyes.

● Describe the benefits to Consumers and Producers of “market participation” using the Benevolent Social Planner’s concept of Total Surplus = Consumer + Producer Surplus to ascertain who benefits and loses as each competes with the other to enhance their own gains. Nobody gains without somebody losing in Adam Smith’s competitive Capitalism!

● Explain the cost and impact dilemmas facing efficient versus equitable taxation methods on firms and people.

● Evaluate the cost and impact of market externalities and how we over consume/produce if the market system doesn’t capture all the direct (accounting, explicit)) and indirect (externalities, implicit) costs of production for sale.

● Detail the market power intricacies of pricing and resource allocation mechanisms, plus the decision-making processes of consumers and firms in perfect competition, monopoly, oligopoly, and monopolistic competition industries.

● Lay out how the markets for an economy’s factors of production (FoP) operate.

● Develop an understanding of wage discrimination, why it exists, and how an education “signals” quality. From this, explain income inequality and the measurement difficulties; and how the philosophy for redistributing income equitably (metric?) challenges efficient (metric?) economic and political policies needed to execute such legislation.

● Identify consumer choice theory operations applicable to exploring 21^st Century microeconomic topics such as the economics of asymmetric information, viewing political-economies as one, and behavioral (psychological) economics—the most dynamic economic frontier in capitalism’s future.

COURSE REQUIREMENTS AND EVALUATIONS: Course has three exams each worth 25%, and one PRO/CON/POSITION paper worth 25%. Final grade is the average of these four assessments. We will adhere to WBU’s grading policy, but I will give numerical grades to give both of us specific feedback on how well we are meeting our objectives. Upon completion of this course, students will use words, mathematics and graphics to define and explain how nations meet or fail to achieve their common, wealth-producing goals. Ideally, the course prepares you to analytically support or criticize a given position using objective economic data so you can critique other’s arguments—constructively.

A. Exams are objective and subjective, emphasizing the application of definitions and principles to assessing real world situations having economic ramifications. They require math solutions, written explanations; and always, thinking before answering. Generally, you’ll describe theory, then assess fixes to real-world issues.

B. Make-up Exams. I will do my best to accommodate your work schedules, but see me before a crisis for details and possible arrangements. All exams must be made up before the next scheduled class meeting. Are “make-ups” harder than regular exams? Of course—you have longer to study than others taking the regular exam per schedule.

C. Position Paper Guidelines. Present research data and analysis of both sides (pro, con) of an economic issue or resolution; then argue your position using that analytical evidence in support. Focus research on government, business, or international economic actions or policies involving fiscal, monetary or international exchange and trade that seeks to preserve or explain solution impacts on price stability, unemployment, economic growth, corporate or individual economic behavior, or externalities.

(1) The poignant and substantiated paper should cover 4-6 pages, typed, and double-spaced. Include an Abstract (good practice for business community decision makers) and References Page using the format guides in the Publication Manual of the American Psychological Association (APA), 5^th Ed (often called the APA Manual; see Wayland Baptist University Bookstore for a copy—or any college library in the area). For guidance on the Abstract page, see p. 12; for the Reference Page, see p. 28 and pp. 215-281 (read p. 219 on use of reference list); and for clear examples on citing Internet sources, see pp. 231-281, paying particular attention to p. 268 (citing electronic references) and p. 272; and use p. 274 for most of your on-line reference citing formats. Take great care to cite the entire reference so I can find it. Practicing proper formatting prepares you to compete at the management and executive levels of your major where writing it right the first time is expected when you are evaluated comparatively against other college graduates. To that extent, though the paper is short, do recall you convince your busy boss in the Abstract, impress peers and your staff in the body, and establish your credentials as a subject matter expert (SME) on the References Page.

(2) Small point on binders and presentation: just staple your Position Paper for turn-in. No need for fancy folders or document protectors, as there are no style/appearance points. In honor of world-wide economics, cheap is good.

(3) Don’t let pride hinder this requirement—university-work is about learning how to learn, not being graded. WBU provides an English teacher every Saturday from 1-5 PM to assist with writing term papers—at no charge. Think of the economics here: perfection for free equals a stunning deal! Upon graduation, your future is in the executive arena; hence, organizational proposals and position papers are presumed to be equally perfect in content, style, and form. I’ll grade accordingly.

(4) Sources: Use a minimum of three (3) sources, only one of which may be from a daily newspaper or weekly news magazine. (The textbook isn’t a source.) Great starting place is WBU’s Learning Resources Center (LRC) in Plainview, TX at www.wbu.edu/lrc where you can also go toll-free (800 459-8648) for research assistance or have research materials sent to you. And, WBU or the LRC has TexShare Cards that permit you to borrow materials from about all of the San Antonio area libraries. I can help get your started--see “INFORMATION TECHNOLOGY below to begin your sojourn; but do read what WBU’s Mabee Library has to help you on p. 8-9 of the Syllabus. Good Stuff!

ATTENDANCE POLICY: If duty calls for absences, make friends with smart, note-taking attendees. Per clearly written WBU and VA guidelines, any student missing 25% (3 meetings) of the 11 scheduled classes will receive a grade of "F" for the course—no exceptions allowed, regardless of the reason(s). As a matter of courtesy, inform me prior to class starting if you need to depart early. (For those counting, 25% of 11 meetings equals 2.75 classes; regardless if “excused” or unexcused; so the third absence is the magic number.) L Realizing traffic externalities occur, three (3) "tardies" may count as one absence.

ACADEMIC HONESTY: This class adheres to zero tolerance for using someone else's work as your own. Students are responsible for reading, understanding, obeying, and respecting all academic policies, with added emphasis being placed upon academic progress policies, appearing in the Wayland Baptist University Academic Catalog applicable to their curriculum and/or program of study. Regarding plagiarism, it is illegal in Texas to plagiarize a direct quote or another writer’s idea from the internet, or any other source. For sure, it is an automatic “F” for the course, so give credit where due, and do it correctly per the APA Manual. Be perfectly brilliant with original thoughts, only if you are for real.

NOTICE TO STUDENTS EXPERIENCING DISABILITIES: It is university policy that no otherwise qualified disabled person be excused from participation in, be denied the benefits of, or be subject to discrimination under any educational program or activity in the University. Students should inform the instructor of existing disabilities the first class meeting.

SYLLABUS NOTE: This syllabus is only a plan, modifiable for academic reasons during the course if prudent. Therefore, the requirements of the course may be altered from those appearing in the syllabus. The plan also contains criteria by which the student’s progress and performance are measured; and that may also be changed, if warranted.

WBU E-MAIL—CHECK IT AT LEAST WEEKLY—IT IS HOW WBU COMMUNICATES WITH YOU! When you registered, WBU provided you an OFFICIAL E-Mail account and address—validate your address and account ASAP, then check it! I will use that address as the primary way to contact you with class alterations should weather cancel a class; or worse case, have WBU send you a Report of Unsatisfactory Progress so both of us know we have work to do.

SCHEDULE for CLASS WORK, PAPER and EXAMS:

DATE CHAPTER READING OR CLASS ACTION REQUIRED:

May 29, 2008 ▲Review Chapters (Ch) 1, 2, 3. 4, 5, and 6. These chapters should be an easy review from macroeconomic principles and chart analysis techniques we’ll use in greater detail in Chs 7-22. Be comfortable with:

Ch 1, Principles. Explain the Ten Economic Principles, particularly focus on 1 through 7. Define economics and distinguish between efficiency and equity. Study Adam Smith’s Invisible Hand --FYI on p.10 and link him to Principle #6 on p. 9. Now run your own debate over Principle #7 for your 21^st Century challenges.

Ch 2, Models. Explain the Circular-Flow model. In greater detail, draw and discuss every detail of the Production Possibilities Frontier (PPF), particularly note which Ch 1 Principles play out in the PPF. I’ll presume the “chartology” in the Appendix was a piece of cake for you; let me know in class if it isn’t.

Ch 3, Trade. Know the Principle (Law) of Comparative Advantage. Trading nations exploit specialization’s advantages evolving from economies of scale. Explain why differing opportunity costs make trade beneficial for variant nations. I’ll assume you know how to determine trade ratios and advantages.

Ch 4, Demand and Supply. Read the Conclusion and Summary first to form the heart and soul of Economics: Laws of Demand and Supply. Knowing the differential impact on Quantity between a “Price change (DP)” (movement along the Demand or Supply curves) and “non-price change (D)” (Shift left/in or right/out) is critical to showing “what happens to Equilibrium Quantity (Qe) if Price (Pe) changes” story. You can’t study this chapter enough! Comfort level arrives when you know if you are changing Qd or Qs, or shifting Demand or Supply, that later determines a new Pe at Qd or Pe at Qs. Know this chapter and the course is your oyster.

Ch 5, Elasticities. Note that Total Revenue is a function of two critical variables: Price Elasticity of Demand and Supply. Total Revenues (TR) minus Total Costs (TC) drive Profits (Π), so the slope of the Demand and Supply curves shows sensitivity (responsiveness) of ∆Q to a ∆P. I presume pp. 90-102 are known in detail—we’ll use it all throughout the course to answer IF-THEN questions about profit/loss forecasts.

Ch 6, Ceilings, Floors, and Who pays the Taxes. Address (draw and define) the economic results of governments countering the market’s Laws of Supply and Demand in meeting the sociologically disenfranchised political demands: price and rent controls (ceilings); and subsidies and minimum wage laws (floors). Why don’t controls and subsidies work? Double study pp.124-131 to explain/draw who pays the tax burden (different from incidence) for governments manipulating Ch 4 and 5’s market system laws. [Hint: review tax payer pain in light of inelastic versus elastic demand curves.]

Jun 5 ▲Ch 7, Total Surplus concept (TS) and Ch 8, Total Surplus concept applied to Taxation.

Ch 7, Total Surplus (TS). The Theory of the Firm and Consumer Choices (linchpins of Microeconomics) determine “satisfaction” after each price-quantity transactional exchange. Both buyers and sellers believe the other tried to cheat them out of fair market value; but both inevitably say they got the best price at the expense of the other. Welfare economics tries to score the exchange game of economic well-being using the concept of maximized Consumer Surplus (CS), pp. 142-143; versus Producer Surplus (PS), pp. 144-146; and Total Market Efficiency, pp. 148-152. This lets us talk to market efficiencies or failures (externalities) later. Study p. 151’s Ticket Scalping, then graphically portray the societal winners and losers. Ready for a human organ market?

Ch 8, TS applied to Taxation. Understand the deadweight loss concept. Graphically portray why there are no efficient taxes—all ↑Prices to ↓Quantity, which decreases Ch 7’s TS = CS + PS. Explain why deadweight losses change economic welfare, and why producers and consumers “share the burden” differently. Note the role Ch 5’s Price Elasticities play in determining the deadweight loss of taxation. Study the details of the Laffer Curve (P. 170) and relate the theory to supply-side economics. It and “demand-side economics” form YOUR current issue as to whether the Consumer or Producer should be incentivized to improve the US economy! The In the News’s On the Way to France is a brilliant, easy read on why the US leads the world while others, don’t.

Jun 12 ▲ Ch 9, Total Surplus concept applied to Trade and Ch 10, Externalities.

Ch 9, TS applied to Trade. Apply the Total Surplus concept to the internationally preferred Tariffs trade restriction (and of secondary priority, Quotas) . Knowing whose “surplus” is gouged answers the World Trade Organization’s (WTO) and International Monetary Fund’s (IMF) riddle in the enigma. Does free or restricted trade via import Tariffs benefit or hurt domestic consumers, unions (labor), governments, businesses, and in the secondary case, import license holders? Know the arguments pro and con for restricting trade: protect jobs (very political, but little support for it in economics), national security, infant industries; counter unfair-competition (dumping), and international affairs favorite—use trade as a bargaining chip. Think through if a modern Roman citizen (YOU) would be Pro/Con NAFTA, CAFTA-DR, GATT, outsourcing, and globalism.

In the News’s Globalization on p. 193 starts a great economics pro/con paper!

Ch 10, Externalities. The US consumes almost 29% of the world’s resources, but we are only 4% of the population, yet 26% of the ozone destruction. The Private Sector, as influenced (controlled?) by the Public Sector, does fail. Why? Absorb Ch 10’s treatment of PIGOU vs. COASE entirely—these guys are rocking your world now. Externalities: distinguish between positive and negative ones and focus on explaining internalizing the externality via zero or insignificant transaction costs and shifting demand and supply curves accordingly. Do a Pro/Con analysis of Pigou’s regulations and Coase’s voluntary incentivization to clean Earth’s pollution. Alternatively, explain the details of increased or decreased Consumer and Producer Surplus if socially optimal output is either incentivized (Coase) or enforced (Pigou) after Price and Quantity changes result.

Jun 19 ▲EXAM #1: Chapters 1-6 (Review), 7, 8, 9, and 10. [Value: 25% of course grade. Figure two hours for the magical experience. Yes, we have class after the exam. J]

For Classà ▲Ch 11, Public Goods. The market capitalism system works best when “property rights” are assigned, and Price allocates Scarcity, Competition regulates distribution of resources, metrics signal efficiencies. Conversely public goods (common resources) aren’t rationed well by market Prices—analyze in light of excludability, rivalry, and free rider factors. Even in 1776, Adam Smith said the government’s job was to provide national defense, transportation, public education (conservative Smith was not a private education or voucher advocate), and a judicial system (duel via litigation, not pistols at dawn). Grapple with applying cost-benefit analysis to the chapter’s various cases, In The News stories, and explain the meaning of the importance of property rights. The idea of solving city congestion will come to San Antonio, is done in London, was just defeated in New York City in Spring 2008, but when politicians say the idea deserves further exploration, you know the fees come.

Jun 26 ▲Ch12, Tax Systems and Ch 13, Costs of Production.

Ch12, Tax Systems. Chapter is worth serious, quiet reading. Take copious, definitive notes. Follow every government’s thinking as “they” explain why taxes are as they are. Come out of this understanding the efficiency (lump sum taxes) vs. equity tradeoff involving the Benefits and Ability-to-Pay principles as they grapple with vertical or horizontal equity thresholds. Can we ever get the proportional-regressive-progressive equity dichotomies correct? Look at the “fly paper theory” of tax incidence vs. tax burden—isn’t that just applying Ch 5 inelasticity/elasticity theory to politicians taxing citizens? Glad you studied Ch 8’s Laffer curve? YOU care about the Case Study (pp. 246-247) and the Fiscal Challenge Ahead, as YOU are the PAYER! Study the deadweight loss concept (p. 250) and In the News’ Flat-tax Revolution for YOUR ideas about future taxes.

Ch 13, Costs of Production. If you’ve had accounting already, this is easy; if not, study Ch 13’s “costs” syntax in detail. This begins the Theory of the Firm part of Microeconomics, so understanding Profit (Π) = Total Revenue (TR) - Total Costs (TC) makes sense only if you know what’s in opportunity costs, differences in Economic Π versus Accounting Π, how Production Functions and the Diminishing Marginal Products work. Key is to define Fixed and Variable Costs, divide them by quantity to make them Average Costs (ATC = AFV + AVC), then compute the percentage change as they go up or down as a function of quantity to make Marginal Costs (MC) and Marginal Revenue (MR). Every manufacturer looks for its ATCmin point at P = MR = MC along the Demand Curve to determine the most efficient economic ordering quantity—and sales! Got all that?

Jul 3 ▲Ch 14, Perfect Competition and Ch15, Monopoly.

Ch 14, Perfect Competition. Start with Fig 8, p. 305 as the finish point of study, then read the Summary. Now do the chapter’s details of defining and explaining how a Perfectly Competitive market works (think hogs, cotton), using Demand and Supply curves to portray the “how.” Study Fig 1 and Fig 4 to grasp “perfection” as Profit is earned competitively from the interaction of many buyers and sellers, none personally influencing [P x Q] outcomes, and Profit Maximization happens at P = MR = MC @ ATCmin point on the flat Demand curve while the firm’s MC curve is its Supply curve. Focus on pp. 303-306 to explain the “Criteria of an Efficient Market Solution” we’ll use to grade other business infrastructures that achieve maximum Profit (Π) via exploited economies of scale and outsourcing through specialization in the era of globalization in the 21^st Century’s Information Age.

Ch15, Monopoly. Focus on Fig 3, 4 and 5, noting the Monopolist always has a negative externality of a perennial Price Markup by setting Qsold at MR = MC, but Price goes up to the Demand curve, creating excessive (unused) capacity that supports an economic profit (not good). Expand your knowledge of the economic bad of a Monopoly’s excessive economic + accounting profit, and the additional Deadweight Loss the Monopolist receives as its own private tax on consumers. Become familiar with the Public (government) Policy efforts and know specifically how the Sherman Antitrust Act (1890) and Clayton Act (1914) apply. How prevalent are Monopoly price discrimination practices in the YOUR market world, especially funding education, city electric power and water, drug patents?

Jul 10 ▲Ch 16, Oligopoly and Ch 17, Monopolistic Competition.

Ch 16, Oligopoly. Focus on pricing techniques; hone in on an Oligopoly’s natural failing tendencies—greed and fear leading to cheating on Supply. Spend time on Game Theory and the Prisoner’s Dilemma if you haven’t had statistics; moreover, for romantics, view John Nash’s point herein (Gaming in Economics = Nobel Prize in 1994) on the DVD, A Beautiful Mind. Ch 16 is all about OPEC’s power facing China and India’s enormously fast rising demand for oil, and the US’ mid-East policies (includes why soldiers fight and die in Iraq and Afghanistan). Note members of oil, diamond, sugar, copper, illegal drug Cartels, and unions (yes, unions act as Oligopolies) are all incentivized to cheat on each other’s Supply as they oscillate between their output and price effects (know the differences on p. 352). They try to be Monopolists by holding back Supply to exploit excessive capacity to reduce contestable markets that allow excessive economic profits (P > MR = MC > ATCmin). Make notes about the Public Policy toward Oligopolies, respecting the details of the Sherman Antitrust Act (1890) and Clayton Act (1914). Finally, economists aren’t always unhappy with oligopoly practices—why? [Hint: define and layout nuances of resale price maintenance, predatory pricing, and tying sales. Riddle me this—why don’t economists fear OPEC’s oil Supply cut announcements in Vienna?

Ch 17, Monopolistic-Competition. The vast majority of the world’s business is done by this organizational structure, so spend time on Ch 17, particularly Fig 1 and Fig 2 explaining how Monopolistic-Competitors ensure economic and accounting profits in the short run at prices above resource allocative efficiency (P > MR = MC > ATCmin point). Note how short-run Monopolistic-Competitors and Oligopolists exploit excessive capacity (not supplying all they could as Perfect Competitors would) in temporarily uncontestable markets. But, in the long run, Price equals the firm’s Average Total Costs as resource costs are bid up by competitors entering the newly profitable market (lots of product mimicking by Asians of US output; see DVD copying)—meaning the Mono-Comp ends up with the same excessive capacity advantage (disadvantage in CS for consumer due to higher P), but at least the economic profits are decreased to only accounting profits. Mono-Comp’s say competition by advertising occurs to drive down excessive Profits—economists disagree. Why?

Jul 17 ▲EXAM #2: Chapters 11, 12, 13, 14, 15, 16, and 17. OPEN NOTES J. (No, NOT Open Book). [Value: 25% of course grade. Figure two hours for the mental gyrations. Yes, we have class after the exam. J]

For Classà ▲CH 18, Factors of Production (FoP) markets (sometimes called Theory of Labor Demand). This is really Ch 4 applied to production inputs: Land, Labor, and Capital, each having derived demands based on decisions to supply finished goods elsewhere. A Production Function relates inputs of FoPs to outputs. Firms use the marginal productivity of labor (MPL = ∆Q ÷ ∆L) to decide what each additional input produces in terms of additional output, and hires so long as the MPL ≥ Wage Paid. Any ∆Output Price, ∆technology, and ∆supply of other FoP’s shifts the Demand for Labor. Supply for Labor generally follows the Production Function’s slope, shifts upon ∆Tastes, ∆Alternative Opportunities, ∆Immigration. The Wage Paid is determined by the Equilibrium point of the Labor Demand and Supply curves. It then follows rather simply that the same market forces operate for the Prices and Quantity of the Demand and Supply for Land and Capital—their value equaling their marginal (additional) contribution to production. Read p. 409’s Economics of the Black Death.

Jul 24 ▲CH 19. Earnings and Discrimination and Ch 20, Income Inequality and Poverty.

CH 19. Earnings and Discrimination. Apply Ch 5’s Price-Wage elasticity/inelasticity of demand to the issue of earnings, and society justifies income discrimination. Education is the greatest enhancer of earnings, but only if one maximizes his/her natural talents (passion for doing). Those calling for equal wages or non-discriminatory income structures, or objective-only hiring criteria, bump into the unintended consequences fostered by corporate leaders, politicians, and laborers seeking above-equilibrium wages such as minimum or living wages, union fixed wage contracts, and efficiency wages where higher wages actually foster increased unemployment. Explain the economics of wage discrimination, how to measure it, why employers, customers, and governments do it. Given education as a signaler of talent and ambition, should wage discrimination be; and if so, how does the Market System handle discrimination? Isn’t the “discriminator” punished with ↓Profits? What’s the difference between compensating differentials and discriminating wages in US male/female wages?

Ch 20, Income Inequality and Poverty. Define income inequality lest we think it everywhere. How does it relate to a criteria for poverty and a poverty rate? How do in-kind transfers, life cycle income patterns and transitory/permanent income factors alter the ability to measure poverty? Develop a synopsis for redistributing income viewing through the conflicted eyes of utilitarianism, liberalism, and libertarianism. Lay out Pro/Con economic specifics of the policies for reducing poverty: minimum-wage laws, welfare payments, negative income tax plans, in-kind transfers, and incentivized work/antipoverty programs. Take this professional opportunity to re-read the workfare concept now in vogue in the top paragraph on p. 449; and both the In the News articles on pp. 444-447 about Hurricane Katrina’s Aftermath and Child Labor are magnificent reads.

Jul 31 PAPER DUE! NO LATE PAPERS! You’ve had this “Suspense Date” since 29 May 2008. Agree? I’ll return your paper on 7 August 2008 to help you determine Final Exam performance desires. L J

For Classà ▲Ch 21, Consumer Choice—a Theory and Ch 22, Microeconomic Frontiers.

Ch 21, Consumer Choice—a Theory. Recall economists try to explain human behavior choices when managing scarce resources; so Consumer Preferences become Indifference Curves (ICs); those being consumption bundles/choices giving the consumer the same level of satisfaction. Lay out the four properties of ICs and how perfect substitutes and complements alter consumer willingness to trade one good for another. Overlay the budget constraint and explain consumer choice optimization.—what’s marginal rate of substitution equaling relative price mean? Walk through how consumer choice alters with ∆income, ∆prices, ∆income + ∆substitution effects; and how derived demand curves change. Apply these concepts to downward sloping Demand curves, wages affecting Labor Supply, and Interest Rates impacting Household Savings. This last one drives the Federal Reserve changing Money Supply to change interest rates to change Consumption to change Investment to alter YGDP you studied in Macroeconomics, and what you hear about daily on Wall Street. J

Ch 22, Microeconomic Frontiers. Objective analysis simply hasn’t been the forecaster behavioral economists expected; opening economic future-think to try codifying our understanding of human behavior and ultimately, society. Wander through the three prime 21^st Century microeconomic economic riddles involving asymmetric information, political economy, and behavioral economics. Take some time to read p. 485’s Case Study-Corporate Management and p. 487’s In the News: The Fruits of Moral Hazard. Politicians use the term “moral hazard” continually. Define terms of reference to avoid chaos in adverse selection, signaling, screening to induce information revelations, the Condorcet Voting Paradox, Arrow’s Impossibility Theorem and the median voter as king. Behavioral economics is the wave of future for Nobel Economics Prize winners and worth studying. YOUR FUTURE-TASK is to teach your children to develop and protect a retirement plan in a subjective world where politicians being people, behave (pass laws)irrationally, meaning they are quite often overconfident, give too much decision weight to too few observations of fact, stall when changing their minds despite a blinding flash of the obvious. Paradoxically, people seem to care about fairness (what is that?), yet are inconsistent in decision-making over a longer period time. Can YOU build a better economic system for humans acting as walking contradictions than Capitalism?

Aug 7 ▲EXAM #3—FINAL. OPEN NOTES J. (No, NOT Open Book). Focus on Ch 18, 19, 20, 21, and 22 and explaining how economic theories operate in real time. [Value: 25% of course grade. To maximize the pleasure, take all four hours if you want!]

NOTE: Final Exam details and Grade, and FINAL COURSE GRADE feedback: if you want details of this cool experience, include a self-addressed, stamped envelope with your FINAL and I’ll mail you feedback ASAP. Or, I can send the information by e-mail—but you must send me an e-mail requesting that material. Keep in mind privacy is lost on the Internet when I “Reply”, so you are tasking me and I’ll comply. Finally, if you just want the grade, you can check that on your WBU IQ.Web page.

INFORMATION TECHNOLOGY: Internet search tools on the World Wide Web (www.) “Embolden” items work great!

Ask Jeeves (http://www.ask.com) This UK search engine picks up academic sources Google leaves out. Suprisingly useful.

Argus (http://www.clearinghouse.net)

Google (http://www.google.com) I find this to be the best “subject” generator for initial research.

Infoseek (http://www.go.com)

Microsoft’s Network search engine (http://www.search.live.com) This search engine is a work in progress, will buy out Yahoo.

Webcrawler (http://www.webcrawler.com) World Wide Web’s Virtual Library (http://www.w3.org)

Yahoo (http://www.yahoo.com) About equal to Google in resources, but less “academic” in nature for research.

Useful Websites, TV and news sources relevant to applicable economic analysis for research: “Embolden” = Super!

AmosWeb. A whimsical interpretation of economic news, excellent start point for paper. http://www.amosweb.com

Barron’s Online for Market Laboratory to follow FED’s monetary policy impacts: http://online.barrons.com/mktlab.

BBC News, internet—get the UK and European view of all things worldly and economic: http://news.bbc.co.uk

Bloomberg Market and Economic News—advice: read daily. Click on the Bloomberg TV or Bloomberg Radio toggle and watch tomorrow or today’s business on your laptop or PC.