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ECON 102 – Principles of Microeconomics

Latest Course Offering: Fall 2011, Term 2
Course Time: Tuesday and Thursday, 5:45 – 8:00
Location: Elings 130
Contact: tomschenkjr at gmail dot com

Instructional Resources

  1. Textbook: Economics by David Colander, 8th Edition, McGraw-Hill, Irwin: 2009 ISBN: 0-07-7247167
  2. Periodicals: The Economist, The Wall Street Journal, The Des Moines Register, New York Times
  3. Blogs: See Greg Mankiw, Marginal Revolution, Brad DeLong, EconLog, Economist’s View, Market Design
  4. Other materials will be distributed via the course website:


All assignments will be scored on a 100 percent scale. The final grade, Y, will be derived using the following formula:

Y = 0.30 * F + 0.25 *E + 0.25 * A + 0.12 * P + 0.03 * C


F = Final
E = Exam
A = Assignments
P = Participation
C = Company score

Final: The final will explicitly be cumulative, although the emphasis will be slightly more on the latter third of the class. The format will be similar to exams: multiple choice, essay, and long problems. The test is worth slightly more and, thus, will be slightly longer than exams.

Assignments: Assignments will be given throughout the semester through the course website. Homework will (usually) be distributed on Tuesday and will be due at the beginning of the following Tuesday.  Assignments are not meant to be taxing, but to help the student prepare for the final.

Participation: Students are expected to regularly participate in classes and, if not in class, in out-of-class communication with the professor. Lack of participation and irregular attendance will be especially noticed if the student is struggling in class. The professor will warmly reward struggling students who seek help through email and questions.

Company Score: Students will be randomly assigned to companies of 3 to 4 individuals, depending on the final class size. Companies will accumulate points throughout the semester based on exams, assignments, participation, and any other metric the professor feels is appropriate. These activities are meant to be fun and introspective, while being educational. At the end of the semester, points will be assigned as the inverse of company rank multiplied by 100, e.g., first place: (1/1)*100 = 100, second: (½)*100 = 50, etc. The company score is especially helpful toward borderline students.

Final Course Score

A = 90-100%
B = 80-89%
C = 70-79%
D = 60-69%
F = < 60%

Reading List

25 Oct: Review of the syllabus and introduction

What is Economics?

***Chp. 1 – Colander
**An Essay on the Nature & Significance of Economic Science. Lionel Robbins, 1945:
**“Politics versus Economics” in Applied Economics: Thinking Beyond Stage One. Thomas Sowell, 2004: pp. 1-29.
*(Negative Liberty) “Economic Liberalism—introduction” in Western Liberalism: A History in Documents from Locke to Croce. Eds. E.K. Bramsted and K.J. Melhuish, 1978: pp. 250-258.
*(Socialism) “The Elements of Socialism” in The Strength and Weakness and Socialism. Richard T. Ely, 1899: pp. 9-18.
*(Corporatism) “Economic Fascism” by Thomas J. Dilorenzo in The Freeman: Ideas on Liberty. Foundation for Economic Education, Vol. 44(6): 1994

Economic institutions

***Chp. 3 – Colander

27 Oct: Production possibilities frontier & Trade

***Chp. 2 – Colander
***Khan Academy (online video) on slope.
**Chp. 2, Appendix A – Colander

1 Nov: Supply, demand, and equilibrium

***Chp. 4 – Colander
**Khan Academy (online video) on solving y-intercept (part 1 and part 2)
**Chp. 5, Appendix A – Colander, pp. 121 – 123

3 Nov: Elasticities: Responsiveness to Price

***Chp. 6 – Colander
**10 Products The Boomed During the Recession, Rick Newman, USA Today, October 20, 2009.

8 Nov: Economic efficiency, taxation, and price control

***Chp. 5 – Colander
***Chp. 7 – Colander

10 Nov: Economic efficiency, taxation, and price control

***Chp. 5 – Colander
***Chp. 7 – Colander

15 Nov: Labor Markets

***Chp. 19 – Colander
***”Why Your Boss is Overpaid“, Fortune, Tim Hartford, May 23, 2006.
*Chp. 20 – Colander
*The College Payoff, Georgetown University, Center on Education and the Workforce
*Economic Returns and Career Transitions for Iowa Community Colleges, Iowa Department of Education & Iowa Workforce Development, May 2010.

17 Nov: Exam

 22 Nov: No Class

24 Nov: No Class, Happy Thanksgiving

29 Nov: Constructing the supply curve: production costs and output

***Chp. 8 – Colander
*Wii Shortages and Myths, Tom Schenk Jr, December 2009.
*A Preliminary Investigation of School District Expenditures with Respect to School District Size in Iowa, Dan Otto, January 24, 2003.
*F.A. Hayek, “The Use of Knowledge in Society.” American Economic Review. September 1945.
*James A. Kagn and Robert W. Rich, “Tracking Productivity in Real Time.” [PDF] Current Issues in Economics and Finance. Vol. 12(8), November 2006.

1 Dec: No Class

6 Dec: Constructing the demand curve: individual choice and budgets

***Chp. 9 – Colander
***Chp. 10 – Colander
*Applied Microeconomics, Tom Schenk Jr., December 2009

8 Dec: Market Failures & Market Structures: Perfect Competition

***Chp. 11 – Colander
***Chp. 19 – Colander
*Of Individual Liberty and Cap and Trade, Robert Frank, New York Times, January 9, 2010.

13 Dec: Market Structures: Monopoly & Market Regulation

***Chp. 12 – Colander
***Chp. 12, Appendix A – Colander
***Chp. 15 – Colander
***Chp. 16 – Colander

Market Structures: Monopolistic Competition & Game Theory

***Chp. 13 – Colander
***Chp. 14 – Colander

Market structures: Oligopolies

***Chp. 15 – Colander

15 Dec: Final

Missed Exams and Assignments

Assignments will be due at the beginning of class every Tuesday and tests will be given on the days denoted below. Late assignments will be penalized 40 percent and may receive a zero. Students must notify the professor of an upcoming absence. Students will be allowed to make up exams ONLY when the professor received prior notification for the inability to complete the exams. In extreme cases where prior notification is impossible, the student must provide written documentation—not by the student—explaining the absence. Students who miss a test for an unexcused absence will receive a zero.


Students will be expected to attend every class. Irregular attendance will be reflected in participation and company exercise scores. Those who already anticipate missing two or more classes are encouraged to enroll at another time.

Writing and Critical Thinking

Modern economics is intensely mathematical, but few people possess the training to grasp a mathematical model. As such, economics is typically communicated in written periodicals so it is no coincidence that well-known economists tend to be good writers—e.g., Paul Krugman, Henry James, John Gailbraith, and Milton Friedman. Employers often lament and seek those with sharp writing ability. Writing is particularly valued when one can capture complex ideas and explain them to those unfamiliar with the topics.  Although writing ability is hard to notice during an application procedure, employers will often quickly promote those who effectively communicate.

This class will challenge student to reply to assertions during an examination. Students will need to synthesize economic theory and writing to convince the professor the original argument was either fallacious or correct. This experience will be different from writing an essay or research paper. Argument portions of the exam will give the student little room to wonder or “add fluff”.


  1. Homework #1 – Due 11/1
  2. Homework #2 – Due 11/8
  3. Homework #3 – Due 11/15
  4. Homework #4 – Due 12/13 Answer Key
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