The final answer key is on the front page of the course website. I forgot to post quiz 10's answer key earlier, but that's now up as well. The final went very well, I think, with three perfect scores. The overall curve in the course is the same one I announced earlier:

A 89-100 # students = 6

A- 84-88 # = 3

B+ 79-83 # = 3

B 69-78 # = 3

B- 65-68 # = 3

The practice packet contained a couple of errors*, so I gave 2 bonus points on the final to the students that pointed those errors out to me. Next time I teach a course, I'll offer that incentive from the start.

If you'd like to pick up your final exam, send me an email and we can arrange it. Enjoy the rest of your summer!

Frank

*Here they are:

- On page 20, I should have asked about Px = 100 in part a (because it is written in the statement of the problem, above), instead of Px = 10, in which case x* = 3 would be correct.
- I should have had yB = 84, not 94 in the pure exchange problem.

A student asked for more information on a couple problems in the practice packet (1. question c on pg.21, 2. pg.23 regarding the three indifference curves, 3. pg. 27 part b and c). I'm forwarding my answers, below, just so everyone is on the same page.

1 To be just as well off as before, the consumer has to achieve the same utility as before U* = (X*Y*)^.5 = 15. We need to make sure that, when the consumer is given M, her choices Xc and Yc yield her a utility of 15. Using the approach shown on p20 part d, you can find Xc = (.5M)/25 and Yc = (.5M)/4 and plug these formulas into the equation 15 = (Xc)^.5(Yc)^.5 to solve for M:

15 = M/20

M = 3002 These are perfect complements preferences. Each indifference curve — associated with a particular utility level U — will be L shaped, with the corner at the point where the two terms in the min{} are equal to each other and also equal to U. Picking U = 1, we find X = .5, Y = 1 as the corner point.

1 = 2X —> X = .5

1 = Y —> Y = 1

Scaling up from here to U = 2 and U = 3, we can find the other curves. You can pick different utility levels when making this graph; the important things are labeling axes and marking the coordinates of the corner points.3 Similar to your previous question, we can graph this isoquant by finding the corner point associated with a quantity of q = 30. At this corner point, the two terms in the min{} will be equal to each other and to 30.

30 = 3L —> L = 10

30 = 2K —> K = 15

Best,

Frank

]]>There is no class tomorrow. The final is Friday morning at 8 in our classroom.

If you would like to meet tomorrow, please send me an email. (I will be around most of the day tomorrow, but don't have my schedule pinned down.)

As stated in class today, nothing like parts e-h of practice packet question 1 will appear on the final.

Best,

Frank

]]>Today's slides are up. We went over slides 1-9. Slide 10 has a practice problem we'll go over tomorrow.

(I mentioned this in class:) One useful tool is missing from the list in yesterday's slides. You should know how to solve the problem seen in quiz 7 (http://econ302.wikidot.com/day:jj27) and know why it's solved in that way (that is, why MC = MR, MR = P and P = AC).

Best,

Frank

]]>The slides are up.

The tools you'll need for the final are listed in the first few slides. There's one more problem for the final, which we'll cover tomorrow ("multimarket pricing") and another problem just for Wednesday's quiz (selling two goods).

Remember to go over the review packet and have questions ready for Wednesday, which (after 20 minutes for the quiz) will be a review session for the final.

Best,

Frank

]]>We didn't use slides today. Later today, I'll upload a scan of my notes on the questions we discussed.

The answer key for the quiz is also posted.

Have a good weekend,

Frank

]]>You can find the answers key for the practice packet on the right-side box of the front page. Today's slides are also up.

Tomorrow's quiz will be at the end of class.

Best,

Frank

]]>Today's slides and answers are up.

Best,

Frank

]]>The slides are posted, and I'd like to move my office hours today to 330-530. If that doesn't work, you can find me in the room next door to my office (420 Kern).

I've adjusted your raw midterm 2 scores, replacing them with

score = 50*(raw/50)^1/2

and I announced a tentative overall curve today, which I would like to modify to this one:

A 89-100 # students = 7

A- 84-88 # = 1

B+ 79-83 # = 4

B 69-78 # = 4

B-/C 59-68 # = 2

I reserve the right to adjust the curve further, but it's likely to look like this at the end of the course.

See you tomorrow,

Frank

]]>Today's slides are up. We did not go over slides 5 and 6, which are extra monopoly problems to practice for the final.

You should prepare for the final by looking through the final practice packet, linked to on the front page of the website. I think this is the [sic] sufficient preparation, but you could also review earlier quizzes and midterms (which are also linked to on the front page). Skip Part I of the packet for now, as we are just starting on market structure stuff now.

I will post answers for the packet on Friday. And I'll give you a rough estimate of the curve for the course when midterm 2 scores are posted.

Best,

Frank

]]>The answer key is up.

Have a good weekend,

Frank

]]>A student pointed out an error in the answer key: the work for 2a should indicate that MRSB = 5/4. I simplified the fraction 10/2*4 wrong. Sorry for the late notice.

Best,

Frank

]]>Today's slides are up.

Good luck tomorrow,

Frank

]]>Today's slides, scores and answer key are up. Sorry about the unusual delay.

See you tomorrow,

Frank

]]>Today's slides are up.

Tomorrow's quiz combines problems we have been working on this week in a (straightforward) way that we haven't gone over yet. So, the quiz will be at the end of class tomorrow.

Best,

Frank

]]>Today's slides are up. I've also updated the front page of the website with a long spiel about what we are doing this week and how it fits in with what we have done before.

Thursday, I would like to spend most of class on review for the midterm (which will take all of class Friday). Please bring any questions you would like to go over.

Best,

Frank

]]>The slides and answer key are posted to the website.

That short-run perfect substitutes cost minimization problem we looked at just before the quiz turned out to be a little more complicated than I had expected. If that sort of question shows up later, it will be as a bonus question on a test.

Have a good weekend,

Frank

]]>Today's slides are up.

Tomorrow's quiz will be at the end of class. We have one more slide we need to discuss before it, about cost minimization in the short run (when the firm cannot adjust/choose how much capital it uses). Here's the full list of things you should know:

slopes of the isoquant and of the isocost curves; IRS, DRS, CRS; assumptions on technology; find the optimal input bundle L^{∗} and K^{∗} and the cost function given w, r and the production function (representing any of the three types of technology); and find the short-run cost function given all that and a fixed K

Best,

Frank

]]>The slides and answers for today's quiz are up.

Unfortunately, the website is very slow today. If it crashes (as has happened before), the web-developers will give updates its recovery here: http://twitter.com/#!/wikidot

Best,

Frank

]]>The slides and answers for today's quiz are up.

Unfortunately, the website is very slow today. If it crashes (as has happened before), the web-developers will give updates its recovery here: http://twitter.com/#!/wikidot

Best,

Frank

]]>Today's slides are up, and the midterm-1 scores are on Angel. I think the class did well (5, 4, 3, and 8 students were in the 90s%, 80s%, 70s% and 60s% ranges, respectively) on the exam, which I'll hand back tomorrow.*

Best,

Frank

- I think the price-decomposition question was a problem for those ending up below 80%. The workbook —
in the back of each section — would be a good way of practicing that sort of problem.**which provides answers**

I forgot to mention in class today: I'm moving tomorrow's office hours to 3:30-5:30 in 401 Kern. As usual, if these do not work and you would like to meet, send me an email.

Best,

Frank

]]>The midterm's answer key is up.

Have a good weekend,

Frank

]]>I thought of a couple short and intuitive, but perhaps forgettable, formulas to provide for tomorrow's test (in response to a question in class). So I'll write the formulas associated with the zero-cost monopolist's pricing rule and the tax-incidence breakdown on the board tomorrow. I think they might be more confusing than helpful, though, what with the Greek notation. I'm open to further suggestions: are there any long formulas that cannot be figured out with a good understanding of core concepts?

We did not look at most of today's slides, but you may wish to do so for review. Keep in mind that most of the material on those slides goes beyond what will be tested. See slide 2 for clarification on this point.

Good luck tomorrow,

Frank

]]>I'll have your quizzes from today to hand back tomorrow. Scores are on Angel.

The Student Bookstore still has copies of the workbook, as of this morning, for $14; and the textbook is on reserve in the library. I recommend you get these minimal materials together and start studying for the exam before tomorrow's class.

Plan for tomorrow. We'll go over the price-change decomposition I mentioned (I'll try to limit it to 25 minutes), which is worth 15 out of the midterm's 50 points, but is a fairly straightforward application of what we've already covered in solving the consumer's problem with Cobb-Douglas preferences. After that, we can go over anything. If there are no questions or requests, I have some related topics we can discuss which may improve your understanding of the required material for the test. For more details, see the slides for tomorrow, which are already posted.

Best,

Frank

]]>Today's slides are up. As stated on the final slide, the quiz will not have questions about

Assumptions on preferences

Calculating the consumer's choice for perfect-complements or -substitutes preferences

Such questions may show up in this midterm or later tests, though.

Best,

Frank

]]>I just got an email confirming that the textbook is already on reserve at the library. Let me know if you have trouble getting access to it. Sorry for the back-to-back emails.

Frank

]]>Scores for quiz 3 are on Angel. The library should have three copies of the textbook on reserve by Wednesday (they told me).

Today's four slides are up. You need to understand the role played by our technical assumptions on preferences — completeness, transitivity, strict monotonicity, continuity and strict convexity.

Some general comments: Most of the stuff you should know for Wednesday's quiz was written or worked out on the board Friday and today. You can see the material presented from another perspective in the textbook (chapter 4), the workbook (sections 5-7), my very brief online writeup, or the links at the bottom of the writeup (in this case, to a site for a Stiglitz-Walsh chapter). You are expected to find and use these resources as needed in your studies outside of class. I hope they are easy to find from the website's front page.

Best,

Frank

]]>Scores for quiz 2 can be found on Angel. And the slides and answers for today's quiz are on today's calendar page, http://econ302.wikidot.com/day:jj08 .

Have a good weekend,

Frank

]]>Today's slides are up. Some of today's material will be on the quiz tomorrow. (See slide 8 or the front page of the website for a list of new material for quiz 3.)

Best,

Frank

]]>Subject: answer and slides from yesterday are up

To: All course individuals

Hi,

The answer key to quiz 2 is up along with yesterday's slides.

Best,

Frank

]]>Subject: q1 answers and scores, friday's and today's slides are posted; and here's some optional reading

To: All course individuals

Hi all,

You can find your score for quiz 1 on Angel. The answer key can be found below the slides on Friday's calendar page, http://econ302.wikidot.com/day:jj01 . Slides are up for today's class as well.

Optional reading: As I mentioned in class, I think Krugman and Wells' chapter on market interventions — including price controls, quantity controls and taxes — provides an excellent discussion of what we have been looking at in recent classes: http://docs.google.com/viewer?url=http%3A%2F%2Fwww.whfreeman.com%2Fcollege%2Fpdfs%2Fkrugman_canadian%2FCH04.pdf Outlawing trade in some market is like setting a quantity ceiling of zero; the Harvard economist Al Roth's blog posts news about ‘markets’ that were or are shut down in this way: http://marketdesigner.blogspot.com/search/label/repugnance .

See you in class,

Frank

]]>Subject: workbooks ordered (in by tomorrow or Tues), slides up

To: All course individuals

Hi,

I called the Student Bookstore downtown and they've ordered some copies of the workbook. So don't worry about finding a copy, as they'll be here soon. Also, the slides are up on the website.

Best,

Frank

]]>Subject: slides up

To: All course individuals

Hi,

The slides are up and can be found by clicking the calendar day here: http://econ302.wikidot.com. Sorry for starting late today; I mistakenly thought the class started at 11:15.

See you tomorrow,

Frank

]]>Subject: syllabus and website

To: All course individuals

Hi,

I've attached the syllabus and you can also find it at the course website: http://econ302.wikidot.com/syllabus If you know anyone taking this class who is not yet registered on Angel (or didn't get this email), please ask them to contact me so I can add them. See you Wednesday,

Frank Erickson

]]>Your grades on the final and in the course are posted to ANGEL and eLion. The answer key for the final is on the front page of the website.

The average on the final was about 80%. You can see the distribution of grades in the course below.

A A- B+ B B- C+ C D

90-100 85-90 80-85 70-80 65-70 60-65 50-60 0-50

9 4 7 2 1 2 3 0

You can pick up your finals tomorrow between 1 and 2 at my office, or contact me to pick them up later. Have a good summer,

Frank

]]>The answers to quiz 10 are now posted. Sorry for the delay.

Good luck on your exam(s) tomorrow,

Frank

]]>The scores for the quiz are up. The answers are not, but I'll get them up some time this weekend (I forgot to scan them, and then left them on campus while my scanner is at home, and so on).

Have a good weekend,

Frank

]]>The slides are up. Sorry about the projector failing today.

Tomorrow's quiz is short — about 10 minutes.The rest of class will be a review session for the final.

I propose doing the quiz at the end of class. However, if you would like to take the quiz at the beginning (perhaps because you aren't interested in a review session), you can do that while the rest of us review non-game theory material for 10 minutes.

Frank

]]>The slides and answer key for today's quiz are up. The scores will be up within a day.

Tomorrow, we will talk some more about games: mixed strategies in normal-form games and backward induction in strategic-form games. That should take about half of class. Afterwards, we could (i) talk about bonus problems like monopoly pricing in two markets and two-part tariffs or (ii) go over another Stackelberg example.

Frank

]]>The slides are up.

About the final — You should start looking at the practice problems for the final now (it's linked to on the front page of the website). You can bring up any questions about it on Friday during the review session or during office hours. I will have an answer key for the practice problems posted soon, but without most of the algebra/arithmetic/geometry work.

Wednesday — Quiz 9 will be at the beginning of class tomorrow. I mentioned the content you should study in class today: solve for the Cournot equilibrium, solve for the Stackelberg equilibrium, get the profits and Lerner Index for each case. Answering all these questions for the examples in section 19 of the Workbook would be good preparation.

Thursday — We will finish up game theory and — if there is time left — either look at (i) entry games, which are a straightforward application of game theory; or (ii) pricing, which applies monopoly and welfare analysis. These topics are potential (likely) bonus material for the final.

Friday — Quiz 10 will be short (maybe 10 min), about game theory, and followed by a review sesion for the rest of class.

Frank

]]>The slides are up.

Frank

]]>The week 6 overview is posted to the website. If you scroll down, you can also find links to a pdf of practice problems for the final. See you tomorrow,

Frank

]]>The slides and answer key for today's quiz are posted. Scores should be up within a day.

The final for this course will be in our classroom from 2:30-4:20 on Monday, June 28. See http://www.registrar.psu.edu/exams/exam_schedule/fe_search_schedule.cfm if you want to find times for your other finals.

I'll update the website and send another email before Monday. The update will include…

— the week 6 overview (topics: oligopoly, some game theory), and

— a selection of practice problems for the final.

Have a good weekend,

Frank

]]>The slides are up.

Tomorrow's quiz will be at the end of class and consist of two problems:

#1. per-unit tax

#2. monopoly

We have seen both problems in class already, but we'll cover another practice problem like #2 tomorrow.

Frank

]]>Slides and answers from today are posted. Scores will be up within a day.

Frank

]]>Today's slides are up, with the typo you guys identified fixed.

Tomorrow's quiz will be at the *end* of class. It combines the problems we saw yesterday and today, but is considerably simpler. The problem consists of a (i) short algebra problem to derive Supply, (ii) graphing Supply and Demand, (iii) computing P* and Q*, and (iv) computing the area of a triangle on the graph (the Consumer Surplus). We'll go over two examples of the exact same sort of problem beforehand.

Frank

]]>The slides are up. Tomorrow, we'll talk about the monopoly problem (with positive costs) and measuring welfare.

Frank

]]>The midterm 2 scores were posted to ANGEL yesterday.

This week we will look at firm behavior in different "market structures" (i.e., with different numbers of firms); and measure outcomes with "welfare," revisiting some market interventions studied earlier (price floors and ceilings, taxes).

The website has been updated: the main page has the week 5 overview, and some new topics have been filled in (core topics of monopoly, oligopoly and game theory; and the extra topics of pricing and monopolistic competition).

Frank

]]>The answers are up (http://econ302.wikidot.com/day:j11); and the grades will be posted on ANGEL some time this weekend.

I'm sorting through the material for the rest of the course, and will post an update before Monday. The rough order is firm behavior (in perfect competition and monopoly), welfare, market power, firm behavior (in oligopoly), pricing and strategy. For next week, the readings are Perloff 8, 9 and 11.1-6; and we will look at problems in sections 14-16 of the Workbook.

There is a plenty of material left, so it's likely that the final will be only *mildly* cumulative — not containing many of the difficult algebra problems we have looked at in the last two weeks. I plan to give you the specifics well before the final. Have a good weekend,

Frank

]]>The material covered so far is listed here (along with some we haven't gotten to yet) http://econ302.wikidot.com/study-guide

In case you missed the review session, I mentioned a couple more things that are definitely not on the test (but may be in bonus questions): cost-minimization for Cobb-Douglas, deriving Demand for perfect complements or perfect substitutes. Also, one thing that will be on it: graphs of budgets. See you tomorrow,

Frank

]]>Today's slides and the answer key for the quiz are up. The quizzes should be graded within 24 hours.

Next week, we will pick up where we left off — why costs matter and what to do with these $/unit graphs. And later, we'll see the details of how costs affect the decisions of competitive firms or a monopolist.

The midterm is cumulative, but some questions will definitely NOT appear: deriving and graphing ICCs and PCCs (from last Wednesday's quiz), solving for general equilibrium in two markets (last Friday's quiz).

Midterm points breakdown (not finalized, minor changes may be made)

14 pts — 7 multiple choice

18 pts — 6 short answer; some numerical, some graphical, some conceptual

5,6,7 pts —- 3 long; graphical or numerical

3 bonus pts —- 3 short answer

The long questions could be almost anything: any problems seen on earlier quizzes or the midterm (except the two mentioned above) and also cost-minimization and deriving the cost function.

Tomorrow, I'll recap some basic concepts and go over some numerical/graphical examples, in whatever order people request. It's unlikely that there will be time for everything, so requests/interruptions are encouraged/welcome.

Frank

]]>The slides are up.

Your graded quizzes and the first midterm may help you prepare for Friday's midterm. If you haven't already, you can pick them up in class tomorrow or Thursday or at office hours.

Frank

]]>I've posted the slides.

Sorry about the slight mix-up I made today. I have changed the MPL and MPK on the slides so that they are correct — I had missed a coefficient of 1/2 on both of these. However, this change does not affect our calculation of the MRTS.

As mentioned in class, Wednesday's quiz will be almost entirely about the pure exchange (a.k.a. Edgeworth box) economy — graphing, calculating equilibrium and the efficiency concepts.

Frank

]]>The week 4 overview is up on the website, and some more topics pages as well (production, perfect competition, applying the competitive model). There's also a long listing of topics, problems, terms, etc here: http://econ302.wikidot.com/study-guide

Frank

]]>The slides and answers for today's quiz are up. The grades will be up soon. I'll send another email when the Week 4 overview is up.

Next week, we'll study the individual firm's cost-minimization problem, which is very similar to the consumer's problem. We'll derive a cost function — how much it costs to produce q units — and use it to re-examine the Supply curve.

The midterm next Friday will (probably) have four long numerical/graphical questions and several shorter questions. I'll give more details later. Have a good weekend,

Frank

]]>Today's slides are up.

Tomorrow's quiz will be at the beginning of class tomorrow and will contain at least problems involving algebra: decomposing the price response into income and substitution effects, and solving for the "general" equilibrium in two markets simultaneously.

My office hours have been switched to 3-5 TuTh. See you tomorrow,

Frank

]]>The slides and answers are up on the website. Let me know if you have any questions about the quiz.

Tomorrow we'll move on to General Equilibrium: solving two markets at once, and pure exchange.

Friday's quiz will include today's material (finding the income and substitution effects) and General Equilibrium with two markets.

Frank

]]>Today's (three) slides are up, and the answer key for the midterm can be found at the page for last Friday.

Tomorrow's quiz will be include material up through today's: old stuff about types of goods and elasticities; newer stuff about deriving Demand as a function of prices and income for any of the three types of preferences; and for Cobb-Douglas preferences only, graphing PCCs, ICCs, Engel curves, and Demand curves.

After the quiz: decomposing the consumer's price response, and general equilibrium with two markets.

Some things I forgot to announce in class (and I'll say again tomorrow): my office hours are moving to 3-5 TuTh (from 2-4) and you ought to pick up the workbook at the Student Bookstore if you don't have access to a copy.

Frank

]]>The grades are posted on ANGEL. The average was 89.5%. Next week we will finish applications of Consumer Choice and move on to General Equilibrium, Production and maybe Perfect Competition. Have a good weekend,

Frank

]]>