Intermediate

Microeconomics
UCSC - Fall 2015

Kris:an Lpez Vargas

About Me
Assistant Professor Economics UCSC
My eld of work: Micro, Behav. & Exp. Econ

PhD in Economics from the Univ. of Maryland
Prev. experience: MEF, WB, IADB, Tel Reg.
Taught IM before
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Why take this course?

Well, it is a requirement!
But, more important:
Because this course gives you tools to understand
better how consumers and firms make decisions,
and how prices are determined.
Examples:
Policy Analysis
Entrepreneurship
Marketing

- Life decisions
- Thinking things through

Why take this course? (cont.)

This course will provide you with some tools that economists use to
assess the benets and costs of possible courses of ac:ons.
This allows us to determine if a certain ac:on or situa:on is
best (op:mal).
Examples:

Do we increase the minimum wage? If so, by how much?

For example, if a company does not set the op:mal price for its product, it is leaving money
on the table!
The same is true if a company is ineciently alloca:ng its resources so that its costs are
higher than they should be

Why take this course? (cont)

Economics will help you in subsequent courses
Marke:ng explores how op:mally to aect consumer preferences.
Well spend the rst several weeks of the course on consumer theory
Management oben focuses on how to maximize a companys
eciency subjects to the constraints in its economic environment
Labor economics
Finance explores risk-return tradeos

Think of this course as an investment!

Syllabus
Contact Kris:an

o kris:an@ucsc.edu
o Oce hours: Thursdays 9:00 to 11:00am - Engineering 2 Building -
Oce 419

Lectures:

o MWF from 3:30pm to 4:40p.m. Thim Lecture 001

Teaching Assistants:

o Zeinab Golmohammadian: zgolmoha@ucsc.edu

Oce Hrs.: Mon 1:14-3:15 pm, Engineering 2 Rm 403F

o Bryan Pral: brpral@ucsc.edu

Oce Hrs.: Tue 2-3 pm and Thu 10-11 am, Engineering 2 Rm 403B

Classes, Sections and Office Hours

Class:Mondays,Wednesdays,andFridaysfrom3:30pmto4:40p.m.ThimLecture001

Officehours:Thursdays9:00to11:00amEngineering2Building#419

TeachingAssistants:
ZeinabGolmohammadian:zgolmoha@ucsc.edu
OfficeHrs:Mon1:143:15pm,Engineering2Rm403F
BryanPratt:brpratt@ucsc.edu
OfficeHrs:Tue23pmandThu1011am,Engineering2Rm403B

Section Class# Days

Time
Location
TeachingAssistant(TA)

Syllabus

Discussion Sec:ons
02A

22593

09:3010:40AM

SocSci2#171

Zeinab

02B

22594

Tu

06:0007:10PM

SocSci2#141

Bryan

02C

22595

Tu

07:3008:40PM

SocSci2#141

Bryan

02D

22596

11:0012:10PM

SocSci2#141

Zeinab

Course Overview

Welcome!Thiscourseprovidesthefundamentaltoolsformicroeconomicanalysis.
Microeconomicsisabodyofideasforunderstandingandanalyzingtheeconomicbehaviorof
individualsandfirms.Themainobjectiveistogetstudentstointernalizethisbodyoftheorywell
enoughsotheycananalyzealargevarietyofsituationswithaneconomicsperspective.Wewill
coverimportantconceptualtoolsandmanyoftheirapplications.

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Thegreatestfocusinourclassisunderstandinghowsupplyanddemandform,andthen

Syllabus: Overview
The main objec:ve: students able to analyze a large variety of situa:ons
with an economics perspec:ve.
Microeconomics is a body of ideas for understanding and analyzing the
economic behavior of individuals, rms and markets.

The greatest focus in our class is understanding how supply and
demand form and then operate together in a market.
We will give strong emphasis to the variety of ways in which markets can
operate.
o We will see perfectly compe::ve markets as well as monopolis:c ones.

We will study strategic interac:on and decisions under uncertainty.

Syllabus
Prerequisites
Economics 1 and calculus.
Mathema:cs is a vital tool for conduc:ng economic analysis.
Main mathema:cal tools to be familiar with:
o graphing func:ons on a plane,
o solving a system of two equa:ons and two unknown variables, and
o deriva:ves (understand the concept and being able to compute the
deriva:ve of a simple equa:on).

Syllabus
TA sessions

TAs will help clarify material from lectures and help prepare for
homework and exams.
Each TA gives two discussion sec:ons and holds two oce
hours per week.

Textbook and Readings

Microeconomics (5th edi:on) by Besanko and Braeu:gam.

The prior edi:on is acceptable as well.
It is students responsibility to keep up with any important
devia:ons from the current version.

Addi:onal readings may be assigned during the quarter.

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Syllabus
Course Grading
Exams:
Two midterms each worth 20% - October 19 and November 9
A comprehensive nal exam worth 40% on Wednesday, December
9 (4-7PM).
Exams are closed book and notes may not be used.
Unless otherwise indicated, only a pen is needed for the exams.
Homework:
There will be 6 homework assignments worth 20% of the total
grade.

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Syllabus
Homework Assignments and other Materials

Assignments will be graded and late assignments will not be accepted.

BUT the good news is that the lowest grade will be dropped. This will help you if
have an emergency that prevents you from turning in your homework.

Team work is encouraged. However, everyone must hand in their own homework.

Students must show their work.

eCommons
Course informa:on and materials, including homework assignments and prac:ce
exams, will be posted on eCommons (hlps://ecommons.ucsc.edu). It is each
students responsibility to check eCommons for course updates and new material
during the quarter.

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Syllabus
Academic Misconduct / Dishonesty
A student who is responsible for academic misconduct or dishonesty
(chea:ng during tests, plagiarism etc) is subject to both academic and
disciplinary sanc:ons. As the academic sanc:on, the student will
automa:cally earn a failing grade for the course. Disciplinary sanc:ons are
determined by the students College Provost or the Academic Tribunal. I
encourage you to review the (new) Academic Misconduct Policy for
Undergraduates: hlp://www.ue.ucsc.edu/academic_misconduct
Special Accommoda:ons due to Disability
Any student who thinks s/he is in need of accommoda:on, based on the
impact of a disability, should contact me privately to submit their
Accommoda:on Authoriza:on and discuss specic needs, preferably
within the rst two weeks of the quarter. Please contact the Disability
Resource Center at 831-459-2089 in room 125 Hahn Student Services or
by e-mail at drc@ucsc.edu to coordinate those accommoda:ons.

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Syllabus
1.

Students will have full access to the Intermediate Micro Video Handbook (IMVH)
developed by UCSD-Economics. Look for the UCSD IMVH link on the class site
on e-commons. This is op:onal, but likely helpful.

2.

In some lectures, we will use MobLab (www.moblab.com) to illustrate some

economic concepts using interac:ons in classroom experiments or games (free,
with real prizes!). You will receive an invita:on soon.

3.

Evalua:ons: There will be an informal evalua:on late in October that you can
use to provide feedback about lectures and discussion sec:ons. Sugges:ons are
very welcome any:me!

4.

To help professor and TAs keep track of communica:ons from students, please
include [ECON 100A] in the subject of every email you send to the instructor or
TAs. For example: Subject: [ECON 100A] I have a ques:on about HW2!

5.

In eCommons site you will nd lectures materials under the Resources folder.

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Syllabus
Final Class Rules
Modied Supplemental Instruc:on
Op:onal Material

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Analyzing Economic Problems

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Overview
1. Dening Microeconomics
2. Microeconomic Modeling
3. Three Elements of Microeconomic Analysis

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Microeconomics Dened
Microeconomics is the study of how
individual economic decision-makers such as
consumers, workers, rms or managers
allocate scarce resources among alternate
uses.

This study involves both the behavior of
these economic agents on their own and the
way their behavior interacts to form larger
units, such as markets.
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Is Microeconomics relevant?
Socie>es collec>vely solve these
ques>ons:

goods and services will be produced and in what quan88es
1. What

2. Who will produce these services and how will they produce them

will receive these goods and services and how will they get them
3. Who


Microeconomics helps us understand
how they do it / how to do it beGer!
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Microeconomic Models

Economic Models are like maps: they simplify reality

to facilitate our understanding.

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Three key modeling tools:

Constrained Op:miza:on
Equilibrium Analysis
Compara:ve Sta:cs

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Constrained Op:miza:on
A constrained op:miza:on problem arises
when an economic agent wants to make the
best (op:mal) decision
But s/he must do so with limited resources
(i.e. respec:ng some constraints)
Objec:ve (func:on) e.g. my sa:sfac:on
Constraints: e.g. my budget
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Constrained Op:miza:on

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Equilibrium Analysis and

Compara:ve Sta:cs
Equilibrium
State or condi:on of a system that will
con:nue as long as the ac:ng forces in the
system remain in balance.
Compara:ve Sta:cs
Descrip:on/analysis of how the system
responds the a change of one relevant
external factor
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Case: UBER

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Case: UBER

Source: www.edgewortheconomics.com

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