AP MICROECONOMICS. Bade, Robin and Michael Parkin. Foundations of Economics, AP Edition. Boston: Pearson, 2007

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1 COURSE DESCRIPTION AP MICROECONOMICS Microeconomics is a one semester AP course which studies the economic behavior and decision making of individual units of the economy such as households, firms, and industries. We analyze how the choices made affect output and revenue. We will focus on how the Laws of Demand and Supply are applied in real life consumer and firm decisions. We will have special emphasis on how the firm makes its output, price, and shutdown decisions using concepts such as marginal cost and marginal revenue. This course also covers the four market structures. We will discover how each structure competes and makes its production and price decisions. As this is an AP course, students will be expected to do a great deal of reading and practice on their own. TEXT McConnell, Campbell R and Stanley L. Brue. Economics, 15 th edition. Boston: McGraw-Hill, 2002 SUPPLEMENTAL MATERIALS Morton, John S. Advanced Placement Economics: Microeconomics, Student Activities, New York: National Council on Economic Education, 2002 Released AP Exams Bade, Robin and Michael Parkin. Foundations of Economics, AP Edition. Boston: Pearson, 2007 Current newspapers, news magazines and web articles. GRADUATION REQUIREMENT Economics is a required course for graduation! Be sure to stay on track this semester so that you can walk across the stage in June! COURSE OUTLINE First Six Weeks Basics of Economics and Demand & Supply Students will practice and demonstrate mastery of the following topics: 1

2 The three economics questions of a society. Particular emphasis on scarcity. (Ch. 1) Economic decision making Rational choice, self interest, opportunity cost, and thinking at the margin (Ch. 1) The difference between Macroeconomics and Microeconomics (Ch. 1) How the factors of production are determined and used. Emphasis on the Circular Flow Model (Ch 2) Further analysis of Economic Cost, emphasizing Production Possibilities and constructing the PPF graph (Ch 2) Comparative and Absolute Advantage. Emphasis on how this affects international trade Law of Demand. Emphasis on how this law affects consumer decision making and how factors shift demand. (Ch. 6) Law of Supply. Emphasis on how this law affects the firm s decision making and how factors shift supply. (Ch. 3) Market Equilibrium. Emphasis on why it is important and how it is reached. (Ch. 3) Reading, analyzing, and graphing Demand and Supply scenarios. (Ch. 3) Second Six Weeks Product Markets and Factor Markets Students will practice and demonstrate mastery of the following topics: Elasticity of Demand and Supply. Emphasis on the mathematic formula and why consumers and firms have either elastic or inelastic demand or supply for certain products. (Ch. 20) Allocation of resources. Consumer/Producer Surplus. How it s determined and why it s important. Reading, analyzing, and graphing surplus. (Ch. 21) Consumer Choice. Emphasis on marginal utility and marginal cost. What is MU and MC and how they help consumers make their consumption decisions. (Ch. 21) Production: Difference between explicit and implicit costs. (Ch. 22) 2

3 AP MICROECONOMICS Production: Difference between accountant profit and economic profit. And why it is important to measure both. (Ch. 22) Production: What can be done in the Short Run versus what can be done in the Long Run. (Ch. 22) Production: Increasing and Diminishing Marginal Returns and why these concepts are so important in the firm s decision making. Reading, analyzing, and graphing Marginal return. (Ch. 22) Production: Economies of scale and Cost Curves. (Ch. 22) Perfect Competition: What it is. Why it is a price taker. Particular emphasis on using Marginal Revenue and Marginal Cost to make output decisions and the Shutdown decision. (Ch. 23) Monopoly: What it is. Why it is a price setter. Particular emphasis on the various ways in which a monopoly arises and the Monopoly firm s output and price decisions. (Ch. 24) Monopolistic Competition: What it is. How the Monopolistic Competition firm competes. How the monopolistic competition firm makes its output and price decisions. Why product development and marketing are so important to the Monopolistic Competition firm. *Graph (Ch. 25) Oligopoly: What it is and how it arises (barriers to entry). Why the oligopoly firms are interdependent. Game Theory and how this concept determines the oligopoly firm s research, advertising and output decisions. * Graph (Ch. 25) Labor Markets: The difference between and importance of labor, financial, stock, and bond markets. *Graph (Ch. 27) Derived Demand: How it is determined. How the employer makes hiring decisions using Value of Marginal Product. *Graph (Ch. 27) Wages and Employment: How the employee s supply of labor changes based on wages. Factors that shift the labor supply. How the labor market returns to market equilibrium. *Graph (Ch. 28) 3

4 Third Six Weeks Market Failure & Role of Government and Review Students will practice and demonstrate mastery of the following topics: The Regulation Process: What it is, why it s necessary and the difference between the various types of regulation. (Public Interest, Capture, Marginal Cost Price, Rate of Return) (Ch. 32) Antitrust Law: What it is, early history, and what it prevents. (Tying arrangements, Predatory pricing) (Ch. 32) Mergers: Using the Herfindahl-Hirshchman Index and Four Firm Ratio to determine the concentration of a market. Determining what concentration will be allowed to merge. Why prevention of some mergers is important to the markets. (Ch. 32) MATERIALS NEEDED FOR CLASS One three ring binder with loose leaf paper OR one spiral notebook with pocket folder Hi-Lighter Pencils GRADE DETERMINATION The grade breakdown for Advanced Placement Social Studies is 70% for major Grades and 30% for Daily Grades. Major Grades include tests. Daily Grades include daily assignments such as graphs, worksheets and quizzes. GRADE REPORTING Progress reports are distributed every three weeks. Report cards are distributed every six weeks. Check my website for distribution dates. Please be sure to always review grade cards with your student. 4

5 AP MICROECONOMICS TEST INFORMATION There will be three tests per six weeks. Class tests are on scantron sheets so every student will need a #2 pencil on testing days. Testing days for Social Studies are Mondays and Thursdays. Check my class website calendar for our testing schedule. RE-TEST PROCEDURE There is no re-testing in AP Microeconomics QUIZZES We will have both random quizzes and assigned quizzes. In order to simulate the AP environment, quizzes will be timed. ASSIGNMENTS Students will be assigned regular reading assignments. You are expected to read the material before coming to class each day. Students will also worth together and with the teacher to solve practice problems for each concept. Students are then required to complete concept exercises on their own. SIMULATIONS Our class will often engage in economic simulations in order to provide visualization and concrete examples of various Microeconomic concepts. All students are expected to participate in these simulations. Simulations include the Circular Flow Model, Production Possibilities demonstration and graphing, Demand and Supply Market Equilibrium, Increasing and Diminishing Marginal Returns Factory Exercise, and, Perfect Competition market pricing. STUDENT ABSENCE & ISS PROCEDURES If you are absent it is your responsibility to check the assignment calendar / website and pick up 5

6 notes or assignments. Make-up work must be turned in within two days of your return to class. If you miss a test/quiz it is your responsibility to arrange a time for a make-up. Tests/quizzes must be made-up within one week of your return to class. If you are assigned to ISS it is your responsibility to turn in your assignment sheet to me and collect it before leaving. Assignments must be turned in to the ISS teacher or to me IMMEDIATELY upon your return to class. Failure to do so will result in a late grade. LATEWORK GUIDELINES Students should strive to complete and turn in all assignments on time. All daily assignments are due at the end of the period. No Exceptions! Daily Grades: 1 st Day Late = 70% 2 nd Day Late = 50% Major Grades: 15% off per day late for the first two days. After two days the late penalty will increase to 50% off. Bonus Work: Bonus work is not offered in Social Studies. There will be no individual chance of extra credit to students looking to raise their grade to passing! Complete your assignments throughout the semester and this will not be a problem. 6

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