Jason R. Williams
PB AF 516
Ways in which microeconomic analysis can contribute to the analysis of public sector issues. Supply and demand, consumer and firm behavior, competitive and monopoly markets, income distribution, market failure, government intervention. Policy applications of theory. Prerequisite: elementary economics.
This course is designed to familiarize you with the use of microeconomics in policy analysis. A solid grounding in economic theory is essential to providing you with the methodological framework within which a variety of public policy problems can be analyzed. The first half of the course is devoted to building upon introductory microeconomic theory with a deeper discussion of consumer choice and markets. We begin with a brief review of supply and demand and some important economic concepts including elasticity and consumer surplus. We follow with indifference curves and budget constraints—the building blocks of individual demand curves—and examine income and substitution effects with this model. The second half of the course begins with a brief treatment of production and costs. We then move to an overview of the market and the most basic market structures. Understanding the way markets are theorized to run in the absence of intervention are key to future policy analyses and to the very justification of policy intervention. We will examine deadweight loss and the effects of government intervention in markets, and close with an exploration of monopolies.
Student learning goals
General method of instruction
Lectures, in class exercises, homework exercises, quizzes and exams
Parts of this course will rely on some familiarity with economics and markets. The exposition will be graphical and will use high-school-level algebra. You should be comfortable with basics of modeling, equations for straight lines, slopes and intercepts, solving simultaneous equations, and so on. Although some calculus underlies much of the concepts and demonstrations, you are not expected to know calculus—but I would suggest it as you pursue other economic as well as statistical courses.
Class assignments and grading
10% in-class surprise quizzes, 40% midterm, 50% final exam