ECONOMICS 103 OUTLINE AND PROBLEMS

                                  If you want to do well in this course, read this page very carefully and follow the advice given!

OBJECTIVE


This course is designed with two main goals in mind. 

1. The primary purpose of the course is to provide a sufficient understanding of the fundamental principles of economics.  This includes propositions about individual behavior, costs, output of firms, equilibrium, market structure, the organization of economic activity, and basic economic reasoning.  Given this knowledge, a student should be able to handle further courses in economics or at least understand economic issues found in a newspaper. This first goal is standard for every principles course. 

2. However, I have a second "higher" goal. I  want to convince you that economics is an interesting field of study, and a systematic way of thinking that is fun and powerful. In short, I don't just want to teach you "about" economics ... I want to convert you into becoming an economist!  By the end of this course, I'd like all of your friends to be saying things like "can't we just watch a movie without  you analyzing it with economic theory!"   I intend to do this by encouraging you to use economic ideas to think about a wide variety of "non-economic" applications.  Throughout this course we will  apply economics to every aspect of your life: from traffic patterns to dating;  from investments to school shootings; from gas prices to Covid policy.  I hope to surprise you, perhaps offend you*, and ultimately whet your intellectual appetite towards economics. So keep an open mind!! **

* About once every two years a student becomes so offended by an application they want to "rip my eyes out." If you do end up feeling this way, please come by my office and let's chat (or send me an anonymous gmail) ... that's what a university is for.  The source of this is always the confrontation of the economic "world view" against some other strongly held "world view".  This cannot be avoided, and the appropriate question we should always ask is "which world view is the correct one?" (or better, "which is the false one?").

I am a firm believer in the University of Chicago Statement on Freedom of Expression.  I also agree with SFU President Joy Johnson when she shared the following:
 
"Universities are comprised of thousands of students, faculty and staff who all hold unique opinions and views, informed by their scholarly work and lived experiences. I believe that universities need to be a place where people can freely engage in academic inquiry, share ideas, learn from each other, disagree constructively and peacefully protest. ...
Academic freedom, as enshrined in our collective agreements and underscored in What’s Next: The SFU Strategy, creates the conditions for scholars to freely examine, question, teach and learn within their area of study, .... To truly live by our core values of academic freedom and critical thinking, we need to hold space for difficult and controversial conversations to take place responsibly and respectfully, as well as defending and protecting the human right to express views within the bounds of the law."

If you are not a believer in academic freedom and can't handle being exposed to alternative theories of human behavior, then perhaps this is not the course for you.

** Maybe I don't have to convert you, maybe you're already a natural born economist in need of some direction.

TEXTS

The core text is 

Economic Literacy: A Different Approach to Economic Principles, (Sixth Edition, McInnes Creek Press, 2024). 

You MUST have this edition of the book to complete the assignments for this course because all of the questions are new. 

The book sells for US$70 and is printed on demand.  That is, IT IS NOT PURCHASED AT THE BOOKSTORE!

To order the textbook for the course go here  .

The answers to all of the odd-numbered questions in the textbook are here.

While you wait for the book to arrive, you can read the first four chapters here.

I've also assigned the short book Candide, by Voltaire. Read it now for fun, and then you can read it again later in the course for the last assignment.


You can buy Candide online if you want a hard copy, or just use this free pdf version.

    




Lecture Recordings


If you miss a lecture for some reason you can go here: Lecture Recording   to find an audio recording of the class.   If you do miss a class, please do not ask for my slides.


EXAMS

There will be ONE regular midterm exam initially worth 35% of your final mark. The final is worth 45%. The regular midterm is "forgivable", so if you miss it or do poorly, the weight of that exam will transfer to the final; that is, your final will count for 80%. This is a bit of insurance for you, but remember, the final exam is cumulative and usually more difficult. 

PROBLEM SETS
 

Problem sets are due weekly throughout the term, and count for 10% of your grade. The problems and due dates are listed below, your TAs will  collect the problem sets in tutorial.  To keep your TA happy, hand in neatly written or typed homework.  It also  helps if your graphs are done on graph paper, or with some type of graphing program.

Collusion on the problem sets is strongly recommended (if you do collude, find a  partner(s) from within your tutorial, please hand in only one assignment per group). It is also suggested that you start the problems early in the week.  

I want to encourage you to work together on the problem sets because one of the best ways to learn how to think like an economist is to argue and debate the ideas with others at a similar level of understanding.  The optimal size of the group is 2-4 people. Any larger and all you get is free riding. Still, if you think you can manage one group for the entire tutorial ... go ahead. Groups may change size and composition as often as you want.

WARNINGS:

1. You will very quickly figure out that the way to minimize the work load of assignments is to have people specialize.  Joe does question 1, Mary does question 2, Deep does question 3, etc. Then you just combine your answers.  What you must understand is that this also minimizes your learning. You'll save time during the week, but  perform poorly on the exams if you take this strategy. The exams count for most of your grade, so keep in mind that you're doing problem sets to train for the exams.  What you want to do is have each member of the group work on all the problems. Then come together, argue your answers, and come up with what you think the best answer is for each question.

2.Please understand that the problem sets represent the MINIMUM number of  practice questions you should do. I expect you to do every single question in the textbook that does not have a dagger or double dagger (ie. the very hardest questions), and to work on them throughout the semester. Many of the problems are designed for discussion. Meet with your study group weekly to go over them.

3. You will quickly notice that the book contains the answers to all of the review questions, and that the answers to  the odd numbered problems are linked above. You will want me to supply the answers to the even numbered questions as well. I WILL NOT DO IT, so don't even ask.  I want you to work them out on your own. You may show your answers to your TA and they can tell you if you got  them right or not. 


4. Many of you are now aware of ChatGPT and other AI programs.  These programs will do your homework for you.  Keep in mind: i) often it gives the incorrect answer, ii) if I catch you I will consider it an act of academic dishonesty, and iii) it completely defeats the purpose of the homework, which is teach you how to think within the model.  There is no point on getting 10/10 on the problem sets if you don't learn anything and fail the exams.

A perennial problem with assignments stems from the fact that you hand them in on different days of the week. Those with tutorials on Mondays and Tuesdays feel they miss out on an extra lecture compared to those with tutorials on Wednesdays and Thursdays. In the past an attempt was made to hand assignments in during lecture, in TA mailboxes, and to my office. All methods failed, and so we are stuck with the current system. I will instruct my TA's to be aware of the problem and I will monitor the average grading of each TA. For those of you with early tutorials, you can take some comfort in the fact that you get an extra tutorial before a midterm.

Also note that every chapter has a set of review questions with the answers supplied in the book. You should do all of these on your own.  

TUTORIAL PARTICIPATION

The final 10% of you grade comes from your participation in tutorials. Your TA will tell you how this grade is determined.

GRADES

Students always ask: "will the grades be based on a curve?" I suppose they mean, "will there be a fixed number of A's, B's, etc." The answer to this second question is "yes and no." This is a large class. I know from experience that there will be a wide range of marks by the time we reach  the end of the course. Some students, remarkably, will get in the high 90's. Others, just as remarkably, will get below 20. The rest of the class will fall in between, and the mean will be between 58-62% 95% of the time..

Here is how I'm going to assign the grades. The average grade in the class will be between a C- to a C+ depending on the nature of the class.
I expect a first year university class to behave as follows:

1. Show up on time.
2. Be ready to start on time. Pen ready and not talking to your neighbor. When you see me turn the projector on, I expect there to be silence in the room and all eyes on me.
3. Don't fidget until the class is over. If I catch someone watching YouTube or working on Facebook, I will make a scene and l never stop asking that person questions! In fact, I strongly recommend that you NOT bring your laptop to class. If you bring a laptop to class, you'd better be prepared to answer a lot of questions throughout the lecture.
4. Pay attention until I say the class is over. Don't start closing books and putting a jacket on at 15 minutes past the hour.
5. Generally be attentive during lectures. I love it when students ask questions, so please feel free to do so.

If, this class behaves along these lines, then I'll make the mean a C+ (This has only happened 2-3 times in recent memory). If I have to ask you to be quiet, etc. on more than a couple of occasions, then the average grade will be  a C. If, however, you constantly talk, want to leave early, show up late, and generally act like Middle Schoolers, then the average will be a C- (this has only ever happened once, in 2006).  

Next, I determine which marks get an `A' grade. I then take the average A grade (suppose it is 80%), and divide by 2. This is where the F's start. So if you're going to pass this course, you need to understand at least half as much as the A students. (This is the Peter Kennedy Rule). Then I   just fill in the rest based on the Economics department grading guidelines.  If this is what you mean by "curving the grades" then the grades are curved. Clearly, your performance relative to others in the class matters, but there is an absolute standard as well.

For the high achievers in the class, you might want to know about The Fellowship of the Rooster and The Order of  Wizards.

COMMUNICATION

You are welcome to come by my office during office hours, but often students find sending emails better. This is fine with me.  You may find that I send out blanket responses to the class, however, if I think the question might be valuable to everyone. I will also send emails out to the class announcing various things during the semester. So ... you should check your sfu email account regularly. When you email me, please use your sfu account, otherwise my filter might not let it through.

There may be times when you want to contact me anonymously.  Perhaps you're critical of some aspect of the course and think I'll be offended (I won't).  Whatever the reason, please feel free to create an anonymous gmail account and send your concern to me that way.  Don't be offended if I reply though!  At the end of the day I want you to understand the model.

CHEATING

I'm an easy going guy, but if you cheat in my class ... I will hunt you down and not rest until you are expelled or punished appropriately. 

It always amazes me that a first year student thinks they can cheat in my class and get away with it. You are, most likely, an amateur cheater. I have taught this class since 1982, and I have either sat on or been the Chair of SFU's Senate Committee on Disciplinary Appeals for a dozen years (our "supreme court for hearing cheating cases).  After years of experience, I am a professional at catching cheaters, I think I've seen every cheating trick, and  I have several of my own to catch people cheating.  So, my message to you ... you amateur cheater ... is don't even think about it.

Still, I know that every semester 2-3 people will ignore my warning. When I do catch you though, don't say I didn't warn you.

I should also point out that, according to  SFU, violation of copyright and unauthorized sharing of copyright material is considered academic misconduct.  It is unauthorized for  you to share the textbook file or link, or to upload the book to any public site. If you do so and are caught, it will be treated as equivalent to cheating on an exam.

If you are unfamiliar with SFU's policy on academic conduct, please read this.


HOW CAN I DO WELL IN THIS COURSE?

Someone recently wrote the following on Rate My Professor:

"For a 100 level Econ course his tests were way to hard, as understanding concepts and applications mean nothing if you can't look at a random situation and give the exact answer he wants! "

I often hear students say "I know the material, I just can't apply it."  What they do not understand is that the ability to apply an idea is the measure of how well you understand it.  If you learned and memorized in class that 1 apple + 1 apple = 2 apples, but you then went to the grocery store you were completely stumped when confronted by 1 orange + 1 orange = ???, then despite your memorizing you didn't understand addition.

The same holds for this course. You can memorize an elasticity formula, but if you can't use it when I change the example from apples to oranges, you don't understand the concept.

SO, what strategies are you going to use to learn how to actually USE the ideas in this class?


1. Do the homework ... plus.  Your book is full of questions. Do them all ... on your own. Check your answers with others. Talk to your study partners. Practice, practice, practice. And start in the first week, don't wait until exam time.

2. Take smart notes.   I challenge you to bring just a single sheet of additional paper to class. With this, just take the bare minimum of notes. No color pens! At the end of class, your sheet should be just chicken scratch. Just get the critical points. THEN, THAT DAY, write out a nice set of notes from the class, using your memory, outline, and small notes. Elaborate, explain, and use more than one color on the graphs. By the end of the semester you'll have wonderful notes that will help in future classes. You'll also have no need to study for the exam. It takes a little bit of work each day, but in the end the payoffs are enormous. The way most students take notes is a waste of time.  I have found that students who use laptops in class have the worst notes. This course is very graph intensive, and you simply cannot graph fast enough with a computer. Please leave your laptop at home.  It is fine to use an ipad or tablet, but make sure you still expand them into your own words after class. 

3. Understand ... don't memorize.  Most of you are just out of high school. You've done a lot of coloring, emoting,  and memorizing. Now it's time to start understanding. Understanding means you have to think about a concept. It is a skill that takes practice. You'll know you understand an idea when you can apply it to a context that is different from the one used to learn it. In class I'll tell a lot of stories and use examples from popular culture and the media. If, after you've heard a story you just think "that was interesting, I wonder why he told it?" then you are not catching on!  Ponder the story and try to figure out why I said it, and how it relates to the lecture material.
Again, put everything in your own words. Try to work through whatever example is given in the opposite direction. Ie. if I raise a price, you lower it and work out the consequences.

4. Come to class.  The ideas in 103 are sequential. If you miss lecture 4, you'll have a hard time understanding the rest of the course. The course follows the book, but the lecture is full of material not in the book  (and vise versa).  Over the past decade attendance in 103 has gone from 90% to about 50%.  At the same time, the number of Ds and Fs have increased from 20% to 40%.  You figure that out.

5. Read the book ahead of time.  You'll want me to do the work for you, but if you read the relevant chapter before the lecture, and then read it again after, you'll learn a lot more in this course.

I won't lie to you. Economics 103 and 105 are probably the hardest 100 level courses on campus. They take ideas from mathematics, history, and other social sciences, and mix them all up in a model you've never seen before. They're rigorous in that they require you to think INSIDE a box. Over the past several  years, SFU has lowered its entrance requirements considerably. We now allow students from high school and college who would never have had a chance at getting in before.  Furthermore, even among the better high school  graduates, numeracy, verbal, and analytical skills have been falling over time.  However, the standards of excellence in Economics have not changed. The result has been an explosion in the number of students who fail both 103 and 105. In some semesters, the fail rate has been as high as 40%!  Many of us who teach these courses are convinced that a contributing factor is work ethic. If you were a B- student in high school, you must realize that a significant increase in effort is required for you to pass.  The good news is you can do it! Also, Economics 103 and 105 are the two most rewarding 100 level courses on campus. I hope this is a great course for you. Good luck in the course!

 
GENERAL OUTLINE

Week  (of)                                  Topic                                                         Readings                                  Problems Sets Due

1      Jan 5                  Intro                                                                 Chaps. 1&2 
 
2      Jan 12                Maximization and Substitution.                        Chaps.  3 & 4                                   
 
3      Jan 19                Demand                                                           Chaps. 4                                PS #1  Chap 2:  6, 8, 10                                               

4      Jan 26                Elasticity                                                          Chap. 5 & 6                            PS #2   Chap 3:  4, 10, 14     Chap. 4: 20, 26.                                                               
5     Feb 2                  Exchange                                                         Chap. 7                                   PS #3  Chap 4: 28, 38, 40, 42.                                                 
                                                                                                                  
6    Feb 9                   Cost and DMPs                                                Chap.  8 & 9                           PS #4   Chap. 5: 2, 6, 12, 22 28.    

      Feb 16                                                                                     READING BREAK

7    Feb 23                Supply and Price Taking                                    Chap. 10                                PS #5:  Chap 6:  2, 10, 16, 22, 26.   Chap, 7: 14, 20.                                 

8     Mar 2                  Applications                                                      Chap. 11                                 PS#6:  Chap, 7: 36,  40.  Chap. 8:  6, 8 10                        

9   Mar 9                    Interest Rates                                                   Chap. 11                                 PS#7:   Chap 9:  2, 4, 20  24.  

10   Mar 16                Interest & Labor Markets                                  MIDTERM,                                   No Problem Set Due    

11   Mar 23                 Labor Markets                                                   Chap. 12                                PS #8    Chap. 10: 14, 16, 24, 34 40.
                                                                     
12   Mar 30                Price Searching Markets                                    Chaps. 13                              PS #9    Chap 11:  2, 6, 8 22, 30.  

13   Mar 6                  Game Theory, Candide                                      Chap. 14, Candide                 PS #10   Chap 12:  8, 14, 18, 22, 26; Chap 13: 14, 42.

                                                                                                                                                             1. Find five applications of any ideas in the book Candide                                                                                                                                                              2. Are economists, who believe in the first principle, Panglossian?                                  


MIDTERM EXAM  Monday March 17, 2025 (tentative)

Problem Sets are handed in at your Tutorial, Except the last one, which will be emailed to your TA.