Econ 11, Markets and Prices, 9:15 AM

Fall 2004

Fred E. Foldvary

Santa Clara University


Class web sites:

Textbook web sites: account 87459

Aplia web site for some problem sets: cost: $21

MWF, 8:00-9:05 AM , Kenna 218, 4 units, #10190

e-mail: [email protected]

Office hours: Monday, Wednesday, & Friday 10:30-11 AM and by appointment

Telephone: office 408/554-6968; home 510/843-0248. Office: Kenna 209.

Please do not call my home telephone after 10 PM.

Fax (econ dept.) 408/554-2331. Mailbox is in the Department of Economics, Kenna 300.

Please do not email me any attachments or problem sets.

If you cannot come to class, place written assignments in my mailbox at the Dept. Of Economics, Kenna 3rd floor. I prefer not to have papers slipped under my office door.

Course overview:

"Markets and Prices" deals with individuals, households, communities, firms, and governments in their roles as economizing producers, traders, consumers, and governors. It is about human choice and action within the constraints of the physical and governmental environment. Microeconomics includes utility, consumer choice, supply and demand, opportunity costs, prices, marginal costs and benefits, externalities, and the impact of government spending and taxes.

You the student should take a professional attitude as a true student of the subject, and as a rule, never let any word or concept go past you that you do not thoroughly understand. Do not be afraid or embarrassed to ask questions. It is your job to thoroughly understand the material.

The objectives of the course:

1. A lifetime intuitive understanding of the basic principles of microeconomics so that you achieve economic enlightenment and sophistication.

2. The ability to analyze economic issues and distinguish good from bad economic thinking.

3. The ability to apply economic concepts to your own life. Concepts you can apply include opportunity costs in making choices, comparative advantage, using marginal analysis, exchange, efficiency, the impact of taxes and regulations, and the difference between constitutional and operational choices.

Biographical sketch:

Fred Foldvary received his B.A. from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University, Virginia. He also has taught economics at Santa Clara University and in Latvia, Virginia Tech, CSU Hayward, John F. Kennedy University, and University of California Extension.

Dr. Foldvary is the author of Public Goods and Private Communities and Dictionary of Free-Market Economics. He edited Beyond Neoclassical Economics and co-edited The Half-Life of Policy Rationales. His areas of research include public finance, business cycles, governance theory, economic philosophy, and the economics of real estate.

Student progress.

Your scores on problem sets, exams, and reports will be recorded on computer, and I will occasionally post them on the class web site. You will be assigned a number, and this will be shown rather than your name. If you don't wish to be included in this viewing, let me know. I am concerned with your success and progress, and will let you know your status on request.

Grades and the criteria for evaluating your work.

The maximum points for each category are:

First midterm exam: 144 points (24 questions)

Second midterm exam: 144 points "

Third midterm exam: 144 points "

Final exam: 288 points (48 questions)

Quizzes, problem sets 260 points

Conversation and oral exam 20 points

total = 1000 points.

There will be an conversation and oral exam in my office. You don't need to prepare for it. It will usually last about 5 minutes. These conversations will help me get to know you better and see how you are developing your economic understanding.

The letter grading is as follows.

A : 921-999, A-: 900-920, B+: 880-899, B : 821-879; B-: 800-820; C+: 780-799,

C : 721-779, C-: 700-720; D+: 680-699; D : 621-679; D-: 600-620; F : 0-599

All problem sets, quizzes, and exams are open book and open note. The purpose is to test your ability to analyze rather than memorize. But there must be no talking during an exam.

All your homework must be your own work. Most students are honest, but in case there is any cheating, copying, or other dishonesty in the exams or assignments, this is a serious violation of university rules and can result in a zero for the assignment or possibly an F for the course, and will be reported to the department, school, or university administration.

Essays are graded by the following criteria:

1) presentation (language, legibility, organization);

2) how completely it covers the topics;

3) focus (avoiding irrelevancies and redundancies);

4) knowledge of the relevant theory, facts, and terms, and defining of key terms;

5) warranting (by clear, sound, organized reasoning) and citing of sources.


You are expected to attend all the classes. To obtain full credit for problem sets and exams, if you are unable to attend class, you must submit a written assignment by placing it in my mailbox before the class time of the date due. If you leave town, contact me prior to leaving about your assignments.

Without advance notice or a bona fide documented reason, submissions after the class date for which it is due will be reduced by 20% of the total maximum score. After the following class day, the grade will be zero. Online assignments close at the date and time indicated. Make-up midterms must be scheduled before the midterm date unless there is some emergency.

Text books

Principles of Microeconomics, 3rd edition, by N. Gregory Mankiw

Aplia online problems and reading ($21)

The class web site has lecture notes for some of the class material. These are not required reading except where indicated on the schedule. Some class content will not on the web site. The midterms and final exam will be derived from material from class lectures, problem sets, and readings, but not from the web lecture notes. You are responsible for obtaining the material if you miss class.


The online assignments will be announced in class and on the relevant web site.

Week 1. Sept. 20+

Test of knowledge. Factors of production. Economic models.

Chapter 1. 10 principles of economics (you may skip #7, #9 & #10).

Chapter 2. Thinking like an economist. Appendix, pp. 42 (cause and effect)-44

Read the rest of the appendix if you are not very familiar with graphs.

Week 2. Sept. 27+

Chapter 3, Gains from trade (the theme continued on Chapter 9)

Chapter 4, Supply and demand.

Wed. Sep. 29: CSI lecture, 5:30-7 PM, Brass Rail, on housing.

Week 3. Oct. 6+

Oct. 4: First midterm; Oct. 6: student planning day, no class.

Chapter 21: Consumer choice.

Week 4. Oct. 11+

Chapter 5, Elasticity.

Chapter 6: Price controls and taxation

Wed. Oct. 13: CSI lecture, 5:30-7 PM, Brass Rail, David Henderson.

Week 5. Oct. 18+

Chapter 7: Consumers, producers, and market efficiency.

Chapter 8: The social costs of taxation.

Week 6. Oct. 25+

second midterm

Chapter 9: International trade.

Chapter 10: Externalities.

Wed. Oct. 27: CSI lecture, 5:30-7 PM, Brass Rail, on creating new countries.

Week 7. Nov. 1+

Chapter 11: Public Goods. Note: the book chapter is optional.

Read the web site:

Additional reading, not required:

Chapter 12, public finance: the tax system, borrowing, spending

Week 8. Nov. 8+

Chapter 18: The markets for the factors of production.

Chapter 19: Earnings and Discrimination

Week 9. Nov. 15+

Chapter 20: Income inequality and poverty. Read also

Chapter 22: Frontiers of Microeconomics. The true story of Thanksgiving Day. Third midterm.

Tue. Nov. 16: CSI lecture, 5:30-7 PM, Brass Rail, History of Liberty

Nov. 22-26, holiday week.

Week 10. Nov. 29+

Economic policy; various topics. Review. Classes end Dec. 3.

Final exam: Friday, Dec. 10, 1:30 - 4:30 PM.