DELAWARE TECHNICAL AND COMMUNITY COLLEGE
STANTON CAMPUS
400 STANTON-CHRISTIANA ROAD
NEWARK, DELAWARE 19702


DEPARTMENT: SOCIAL SCIENCES

COURSE SYMBOL & NO.: ECO 122

COURSE TITLE: MICROECONOMICS


COURSE DESCRIPTION:

Economics II is designed to instruct the student in the basic principles of supply and demand and as they effect producer pricing decisions. It is specifically concerned with the relationship that exists between business and consumers and seeks to explain the structural differences in production and consumption.





PREREQUISITE ( S ) : Pretech Reading, Writing, and Math

TOTAL CLASS HOURS : 3

TOTAL LAB HOURS : 0

SEMESTER CREDITS 3

COURSE LEADER : John Rossi

DEPARTMENT CHAIRPERSON : Alan Lavallee

DEAN OF INSTRUCTION: Harry West



COLLEGEWIDE OBJECTIVES

The student will be able to:
1. Discuss concepts of supply and demand as they impact price theory.
2. Describe market structure including different forms of competition.
3. Analyze the factors surrounding the concept of price elasticity.
4. Analyze cost productivity in the distribution of profit and discuss its effect on social issues.
5. Describe and evaluate theories of consumer choice.

DIVERSITY
This course will examine issues pertaining to diversity through an examination of the issue of World Trade with specific emphasis on the influence of the Japanese culture on that nation's economic policies.

GENERAL TOPIC AREAS



I Economic Thinking
II Demand and Supply
III Consumer Choice
IV Price Elasticity and Total Revenue
V Cost Minimization
VI Profit Maximization
VII Firms in Perfect Competition
VIII Firms in Imperfect Competition
IX Labor & Capital
X Government in the Market

Unit I
Economic Thinking



Educational Objective
This unit is designed to explain to students the differences between micro and macro economics including a discussion of the interrelationships of supply and demand factors in the economy. In addition, it emphasizes an economic approach to understanding society.

Measurable Objectives

When students have successfully completed this unit they will be able to explain:

1) The difference between micro and macro economics.
2) The concept of production possibilities curves and reasons for their expansion or contraction.
3) The difference between the private and public sectors of a market economy.
4) The concept of opportunity cost.
5) How increasing opportunity costs can cause problems.
6) The difference between a market economy and a centrally planned economy and the current status of each.
7) The direct and indirect relationships between price and quantity in supply and demand.
8) The two different ways in which efficiency can be measured.
9) Why efficiency and full employment are implicit assumptions that must be made in order to utilize a productions possibility curve to illustrate economic growth.
10) Problems in logic that could cause faulty conclusions about economic phenomena.
11) How economics attempts to use the scientific method.
12) The Factors of production.
13) Positive as opposed to normative concepts.
13) The linkage among specialization, trade, and comparative advantage.
14) The Invisible Hand theory.
15) Different types of business organization and the concept of circular flow.
16) The difference between industrial countries and LDC's.

Unit II
Demand and Supply


Educational Objective

This unit is designed to instruct students in equilibrium price theory. To do so, it combines the previous discussions of demand and supply and examines various economic factors that lead to market shifts.

Measurable Objectives

When students have successfully completed this unit they will be able to explain:

1) How each of the five demand shifters can bring about a shift in demand.
2) How each of the five supply shifters can bring about a shift in supply.
3) How simultaneous shifts in demand and supply can occur and what effect those shifts will have upon the interrelationship of price and quantity.
4) The economic consequence of ceiling prices.
5) The economic consequence of support prices.
6) The effect of sales and excise taxes.
7) The economic effects of the war on drugs and other illegal activities.

Unit III
Consumer Choice


Educational Objective

This unit is designed to instruct students in the concept of consumer sovereignty in order to lay the foundation for the derivation of demand.

Measurable Objectives

When students have successfully completed this unit they will be able to explain:

1) The concept of consumer sovereignty.
2) Whether or to what extent the concept of producer sovereignty is valid in a market economy.
3) The concepts of marginal utility and diminishing marginal utility.
4) How consumers can maximize their satisfaction.
5) The concept of consumer equilibrium.
6)Why demand curves exhibit an inverse relationship between price and quantity
7) Perfect and imperfect substitution.
8) The substitution effect and the income effect.
9) Why the price of present consumption is a function of interest rates.
10) The concept of consumer surplus.
11) The derivation of market demand.

Unit IV
Price Elasticity and Total Revenue


Educational Objective

This unit is designed to instruct students in the concept of product demand with a special emphasis on price elasticity.

Measurable Objectives

When students have successfully completed this unit they will be able to explain:

1) How price elasticity affects the shapes of demand curves.
2) The concept of price elasticity of demand and its effect on total revenue.
3) The method and benefit of calculating arc elasticity.
4) Factors that affect price elasticity of demand.
5) Why price discrimination occurs and its relationship to price elasticity of demand
6) The concept of cross elasticity of demand and income elasticity of demand and how consumers generally react to changes in it.
7) The difference between a change in demand and a change in quantity demanded.
8) Elasticity of supply.

Unit V
Cost Minimization

Educational Objective

This unit is designed to instruct students in the production side of the supply demand relationship. It emphasizes the concept of diminishing returns, the stages of production, the cost minimizing rule, and economies of scale.

Measurable Objectives
When students have successfully completed this unit they will be able to explain:

1) The relationship between input and output in the production process.
2) The different incentives created by price changes for producers and consumers.
3) The law of diminishing returns.
4) The three stages of the production process.
5) Total physical product, marginal physical product, and average physical product.
6) The difference between economic costs and accounting costs
7) The cost minimizing rule and its relationship to price of a resource and the output forthcoming.
8) The concepts of economies and diseconomies of scale.

Unit VI
Profit Maximization

Educational Objective
This unit is designed to instruct students about the concept of profit maximization. It also introduces characteristics of market structure.

Measurable Objectives
When students have successfully completed this unit they will be able to explain:

1) The differences between explicit and implicit costs.
2) The relationship between marginal cost and marginal revenue.
3) The profit maximizing rule.
4) The difference between normal and pure profits.
5) Two common ways of measuring profits.
6) When a firm would be willing to produce at a loss.
7) Total revenues as related to the shape of various demand curves.
8) Behavior of firms in their dealings with substitutes for their product lines.
9) Selling environments or market structure.

Unit VII
Firms in Perfect Competition


Educational Objective

This unit is designed to instruct students in the characteristics of perfect competition. It discusses the demand facing such firms and provides a basis for studying the comparative characteristics of firms in imperfect competition.

Measurable Objectives

When students have successfully completed this unit they will be able to explain:

1) The four characteristics of a perfectly competitive firm.
2) The possible profit or loss positions of perfectly competitive firms.
3) The concept of long run adjustment and the effect on pure profits by the entry of additional resources or firms.
4) Break-even price and permanent shut-down price.
5) The concept of economic efficiency.
6) The minimum profit level of a firm in perfect competition.
7) Why each firm in a perfectly competitive industry strives to lower its costs.
8) How normal profits increase the number of firms in perfect competition.
9)The concepts of consumer surplus and producer surplus.

Unit VIII
Firms in Imperfect Competition


Educational Objective

This unit is designed to instruct students in the characteristics of imperfect competition. It discusses the demand facing such firms and explores the differences among monopolistic competition, oligopoly, and pure monopoly.

Measurable Objectives

When students have successfully completed this unit they will be able to explain:

1) The characteristics of an imperfectly competitive firm.
2) The definition of monopoly.
3) Why society forbids unregulated monopoly.
4) The concepts of barriers to entry, natural monopoly, local monopoly, regulated monopoly, and monopoly power
5) Why average revenue is the same as price
6) How monopolies maximize profits.
7) Why price discrimination exists.
8) The characteristics of monopolistically competitive firms.
9) How product differentiation is used as a technique to reduce price elasticity thereby affecting total revenue.
10) The definition of oligopoly, including the characteristics which give rise to oligopoly.
11) Game theory and how an oligopoly establishes the price of its product.
12) Why colluding firms have an incentive to cheat on one another, causing the agreement to disintegrate.

Unit IX
Labor and Capital


Educational Objective

This unit is designed to instruct students in the various aspects of labor and capital as factors of production. The issues of wage determination and unionization are discussed. Various methods of depreciation are also examined as well as the relation ship among interest rates, inflation, and profitability.


Measurable Objectives

When students have successfully completed this unit they will be able to explain:
1) The labor leisure choice.
2) The economics of wage determination.
3) The effects that automation, discrimination, women's liberation, labor unions, and minimum wage have on the economy.
4) The effect of price ceilings and floors on the resource markets.
5) The importance of the relationship MRP = MFC.
6) How firms add multiple resources to the production process efficiently.
7) the concept of the backward bending labor supply curve.
8) Different methods of depreciation.
9) The concept of capitalized value.
10) The relationship among interest rates, inflation, and profitability.
11) The effects recent budgetary decisions will have on American business.

Unit X
Government in the Market


Educational Object
This unit is designed to instruct students in the role government plays in the market place. It examines information and the price system, policy makers and related agencies, government and the private sector, and the concepts associated with public choice.

Measurable Objectives

When students have successfully completed this unit they will be able to explain:
1) How the government interacts with other sectors of the economy.
2) The economic role of government.
3) Why market economies have large public sectors.
4) Why the government intervenes in business activity.
5) The side effects that result from rent controls and farm subsidies.
5) The necessity for antitrust policy.
6) Why governments have deregulated and privatized certain lines of business.
7) Differences between collective decision-making and the private sector.
8) The role of rent seeking.


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