1 University of Missouri ECON 1014 Theory of the Firm Spring 2015 Professor Sandra Klein 229 Professional Building 573-882-2777 [email protected](*best way to contact me) Office Hours: Monday: 9:00-11:00 Wednesday: 2:00-3:00 See Blackboard for a listing of Econ Help Desk hours There is no means by which anyone can evade his personal responsibility. Whoever neglects to examine to the best of his abilities all the problems involved voluntarily surrenders his birthright to a self-appointed elite of supermen. In such vital matters blind reliance upon “experts” and uncritical acceptance of popular catchwords and prejudices is tantamount to the abandonment of self-determination and to yielding to other people’s domination. As conditions are today, nothing can be more important to every intelligent man than economics. His very own fate and that of his progeny [are] at stake. Very few are capable of contributing any consequential idea to the body of economic thought. But all reasonable men are called upon to familiarize themselves with the teachings of economics. This is, in our age, the primary civic duty. Whether we like it or not, it is a fact that economics cannot remain an esoteric branch of knowledge accessible only to small groups of scholars and specialists. Economics deals with society’s fundamental problems; it concerns everyone and belongs to all. It is the main and proper study of every citizen. Ludwig von Mises Human Action: A Treatise on Economics (1949) (emphasis added) The course: This course introduces microeconomic principles and applications. We assume no prior knowledge of economics and have no advanced mathematical or statistical prerequisites. Microeconomics, also called price theory, studies the social organization known as the market. Microeconomic analysis allows us to trace how the decisions of individuals—consumers, workers, managers, entrepreneurs, financiers, and so on—interact to produce a social or market order. As such, microeconomics is the cornerstone of all of economics. However, we systematically exclude the study of economic aggregates—total output, inflation, employment—which is the domain of macroeconomics. We begin with scarcity, the fundamental constraint on human decision making, and we consider its implications for the theory of choice. From there we develop the theory of
2 supply and demand, a key building block of economic analysis. The remainder of the course consists mostly of extensions to, and applications of the theory of supply and demand. Grades: Grades will be computed on the basis of your online quizzes, two midterm exams, and a comprehensive final exam. Online Quizzes 20% 1st Midterm 25% 2nd Midterm 25% Comprehensive Final 30% Plus/minus grading will be used with the usual ten point scale (e.g., 97-100, A+; 93-96, A; 90-92, A-). Note that the ONLY way to earn points toward your grade is by answering questions correctly on the quizzes (including any pop quiz in class) and the exams.