Readings for ECON 1201 Principles of Microeconomics
Below are the Schedule and Supplementary Readings for our class. Or jump to You Are Here.
Tentative Class Schedule
Note Bene: I reserve the right to make reasonable changes to the schedule as necessary, so please check back periodically.
I will strongly emphasize the required readings below. You are responsible for completing all of these, even if we don't discuss them in class. The remainder of the readings will add depth to your understanding of the material, and you should strive to complete at least the majority of them.
What is this thing called `economics'?
- David Friedman, Price Theory: An Intermediate Text, Chapters 1 & 2
- Cowen & Tabarrok, Chapter 1
- Rubin, Paul H. "Folk Economics." Southern Economic Journal 70, no. 1 (July 2003): 157-171.
- Levy, David M., and Sandra J. Peart. "The Secret History of the Dismal Science. Part I. Economics, Religion and Race in the 19th Century." Library of Economics and Liberty, January 22, 2001.
- Cowen & Tabarrok, Appendix A (Reading & Making Graphs)
The big picture: the Invisible Hand
- Read, Leonard E. "I, Pencil: My Family Tree as told to Leonard E. Read". The Freeman, December 1958.
- Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations, 1776. (Also available in PDF or EPUB via Google Books.)
- I:1 (Of the division of labour)
- I:2 (Of the principle which gives occasion to the division of labour)
- I:3 (That the division of labour is limited by the extent of the market)
- IV:2 (Of restraints upon importation from foreign countries of such goods as can be produced at home)
- Hayek, F.A. "The Use of Knowledge in Society." The American Economic Review 35, no. 4 (September 1945): 519-530.
- Friedman, Milton. "The Social Responsibility of Business is to Increase its Profits." The New York Times Magazine, September 13, 1970.
- Bailey, Ronald. "'Chiefs, Thieves, and Priests': Science writer Matt Ridley on the causes of poverty and prosperity." Reason, February 2009.
Gains From Trade I: Production Possibilities & Specialization
- McAfee, R. Preston. Introduction to Economic Analysis, Section 2.6 (Trade).
- Ricardo, David. Principles of political economy and taxation. Chapter VII, § 47: "Commodities produced in different countries do not, however, exchange according to cost of production, owing to the immobility of producing agents from one country to another. Each country producing those commodities in which it has the greatest advantage". (or PDF, p. 184)
Problem Set #1 (due 2010-02-02).
Supply & Demand: The Market in Action
- Cowen & Tabarrok, Chapter 2 (Supply and Demand)
- Cowen & Tabarrok, Chapter 3 (Equilibrium)
- Bauman, Chapter 11 (Supply and demand)
- Bauman, Chapter 20 (Supply and demand details)
- Bell, Frederick W. "The Pope and the Price of Fish". The American Economic Review 58, no. 5 (December 1968): 1346-1350.
Problem Set #2 (due 2010-02-11): Cowen & Tabarrok, Chapter 2, #6,10,12; Chapter 3, #2,3,10,11
Problem Set #3 (due 2010-02-
1618): Cowen & Tabarrok, Chapter 4: F&T #8, T&PS #6,9
- Cowen & Tabarrok, Chapter 5 (The Price System)
Problem Set #4 (due 2010-02-18): Cowen & Tabarrok, Chapter 5: F&T #3, T&PS #4,5, C #5
- Bauman, Chapter 3 (Time)
- Bauman, Chapter 4 (Risk)
- Ellenberg, Jordan. "Is Powerball a Mug's Game?". Slate, August 31, 2001.
- Cowen & Tabarrok, Chapter 6 (Price Ceilings)
- Cowen & Tabarrok, Chapter 7 (Price Floors, Taxes, & Subsidies)
Midterm Exam: Thursday, 2010-03-18 (in class). Questions for Review.
Gains From Trade II: International Trade
- Cowen & Tabarrok, Chapter 8 (International Trade)
Interlude: The Inescapable Mathematics of Musical Chairs
- Chapter 2 (The inescapable mathematics of musical chairs) in Schelling, Thomas C. Micromotives and Macrobehavior. Revised. W. W. Norton, 2006.
- Domino tiling problem, pp. 23-24 of Dijkstra, Edsger W. On the cruelty of really teaching computer science. Austin, Texas: University of Texas at Austin, December 2, 1988. (c.f. the E.W. Dijkstra Archive for more writings)
- "Matching (graph theory)" in Wikipedia
- Davis, Martin. "Sex and the mathematician: The High School Prom Theorem." Games and Economic Behavior 66, no. 2 (July 2009): 600.
- "The Monk on the Mountain"
- Shinbrot, M. "Fixed-Point Theorems," Scientific American, January 1966.
Problem Set #5 (due 2010-04-06): Cowen & Tabarrok, Chapter 6: C #4; Chapter 7: T&PS #7; C #2; Chapter 8: T&PS #2, C #1
Judging Outcomes: What does `efficiency' mean to me? (and what does `efficiency' mean to society?)
Problems & Complications: Externalities, Moral Hazard, & Adverse Selection
- Cowen & Tabarrok, Chapter 9 (Externalities: When Prices Send the Wrong Signals)
- Coase, R.H. "The Problem of Social Cost." Journal of Law and Economics 3 (October 1960): 1-44.
- Friedman, Chapter 18 (Market Failures)
- Akerlof, George A. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism." The Quarterly Journal of Economics 84, no. 3 (August 1970): 488-500.
- Moss, David A. "A Ounce of Prevention: Financial regulation, moral hazard, and the end of 'too big to fail'." Harvard Magazine, October 2009.
- David Friedman on market failure, 2010 Free State Project Liberty Forum (YouTube video, part 1 of 7)
Problem Set #6 (due 2010-04-13): Cowen & Tabarrok, Chapter 8: T&PS #6; C #2; Chapter 9: T&PS #2,7; C #3
Firms & Production
- Coase, R.H. "The Nature of the Firm." Economica 4, no. 16. 2 (November 1937): 386-405.
- Alchian, Armen A, and Harold Demsetz. "Production, Information Costs, and Economic Organization." The American Economic Review 62, no. 5 (December 1972): 777-795.
- Cowen & Tabarrok, Chapter 10 (Profits, Prices, & Costs under Competition)
- Cowen & Tabarrok, Chapter 11 (Monopoly)
- Horvitz, Paul M. "The Pricing of Textbooks and the Remuneration of Authors". The American Economic Review 56, no. 1/2 (March 1, 1966): 412-420.
- Cowen & Tabarrok, Chapter 12 (Price Discrimination)
- Cowen & Tabarrok, Chapter 13 (Cartels, Games, & Network Goods)
Problem Set #7 (due 2010-04-
- "Microfinance", in Wikipedia
- Becker & Posner, Uncommon Sense, Chapter 47 (or see Posner's and Becker's original blog entries)
- Two services I've used to make successful micro-loans are Kiva and Microplace. Both sites have more background on microfinance.
The following are books, mostly written for a general audience, that are suitable for reading independently this semester. Many of them emphasize the application of economic principles to daily life and/or important policy issues; these may be a good starting point for finding a topic for a five-minute presentation. None are required, but reading at least a few chapters that interest you would be a Good Idea.
- The Fatal Equilibrium by Marshall Jevons is a murder mystery written by two economists. It's a painless and fun introduction to the way economists see the world.
- The Economic Naturalist: In Search of Explanations for Everyday Enigmas, by Robert H. Frank, is chock full of short examples of puzzling phenomena from everyday life with potential economic explanations. It's the kind of book that's easy to read in short chunks whenever you find time.
- Micromotives and Macrobehavior, by Nobel prize winner Thomas Schelling, may be the most challenging book on this list; although light on equations and graphs, it demands that elusive quality sometimes called "mathematical maturity". I wish someone had introduced me to it when I was an undergrad, and I recommend it highly. On reserve at the UCONN Library.
- Hidden Order: The Economics of Everyday Life is the "lite" version of David D. Friedman's excellent intermediate microeconomics text. On reserve at the UCONN library.
- Economic Analysis of Law, by Richard A. Posner, is an excellent starting point if you're interested in the economic implications of and rationale for laws and regulations. (Note that David Friedman has also written on this subject, as has UCONN's own Thomas Miceli.)
- Despite its vintage, Steven E. Landsburg's Armchair Economist: Economics & Everyday Life remains one of the best books of its kind. Highly recommended. Also see Landsburg's "Everyday Economics" column at Slate.
- The many short essays that Nobel prize winner Gary Becker wrote for Business Week are collected in The Economics of Life: From Baseball to Affirmative Action to Immigration, How Real-World Issues Affect Our Everyday Life. Becker has continued this tradition of writing for a popular audience in a blog co-authored with Richard Posner.
- Fernand Braudel's Civilization and Capitalism, 15th-18th Century, beginning with Vol. I: The Structure of Everyday Life, is a classic work that may interest the historians among us.
- Jon Elster's Nuts and Bolts for the Social Sciences is another of those books I wish I'd had as an undergrad. It's well worth the investment for students of philosophy or the social and behavioral sciences in general. (Note that the chapter numbering above refers to the 1989 edition; your mileage may vary.)
- I haven't yet read Levitt's and Dubner's Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, but it was a surprise best seller and I expect it's another great introduction to the economic perspective on everyday life.
- There are several other recent books which I haven't yet read, but which look promising:
I hope that's enough to keep you busy. (Sorry, but I couldn't find a book about the economics of zombies...)
Note: income from the affiliate links above will be spent on snacks or prizes for the class.
<= ECON 1201