1. CDAE 254 Intermediate Microeconomics for Applied Economists Fall 2007

2. CDAE 254 - Class 1 Aug. 28 Today: Syllabus -- class requirements and policies Student information sheet with “quiz” questions 1. Introduction Next class: 1. Introduction

3. Syllabus Instructor: Teaching assistant: Class time & place: Office hours: Textbook: Intermediate Microeconomics and Its Application by Walter Nicholson, Ninth Edition, 2004 amazon.com ebay.com

4. My teaching strategies: -- Students are the “customers” and “products” -- College education is to learn how to learn -- Every class is different -- Help is always available -- We are a community: learn from each other and help each other!

5. How to get a good grade? -- Attend every class -- Complete all assignments on time -- Get help when you have a question

6. How will we study each topic? (1) Intuitive analysis (2) Graphical analysis (3) Mathematic analysis (4) Applications

7. Build your own analytical mind

8. 1. Introduction 1.1. Overview of an economy 1.2. Economics and microeconomics 1.3. Economic models & applied economic analysis 1.4. Development of economic models 1.5. Verification of economic models 1.6. Ten principles of economics 1.7. Functions and graphs used in economics

9. 1. Introduction 1.1. Overview of an economy 1.1.1. Who are the major players? 1.1.2. What are their relations?

10. 1.2. Economics and microeconomics 1.2.1. What is economics? -- Study of the allocation of limited resources among alternative end uses. -- A social science which covers the actions of individuals & groups of individuals in the processes of producing, exchanging and consuming goods and services.

11. What is economics? Science: Looking for a black cat in a dark room. Philosophy: looking for a black cat in a dark room where there is no black cat. Economics: looking for a black cat in a dark room under _______________. ???: looking for a black cat in a dark room where there is no black cat and finding one any way.

12. 1.2. Economics and microeconomics 1.2.2. Two major branches of economics: -- Microeconomics: study of the behavior of individual economic units & their interactions. Economic units: Consumers & producers Interactions: Market interactions -- Macroeconomics: study of broad aggregate economic relations.

13. 1.2. Economics and microeconomics 1.2.3. Goals of economics: -- Explanation -- Prediction 1.2.4. Analytical techniques in economics: -- Optimization (1) Maximization (2) Minimization -- Equilibrium (1) Partial equilibrium (2) General equilibrium

14. 1.3. Economic models & applied analysis 1.3.1. What are economic models? -- Simple theoretical descriptions that capture the fundamentals of how the economy works. 1.3.2. Major elements of an economic model: -- Assumptions -- Variables (1) Controllable variables (2) Uncontrollable variables -- Parameters

15. 1.3. Economic models & applied analysis 1.3.3. Relation between theories & applied research: -- Theories are developed from real observations -- Theories provide guidance for applied studies -- Applied studies provide tests of the assumptions & conclusions of theories.