Introductory Microeconomics, Michaelmas Term 2020
Note
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Tutor
Tutorials
At least to start, we will meet in my room, Staircase 1.1. If you wish to switch
groups in any particular week, that's fine as long as you find someone who will
swap places with you. I don't want more than three in a tutorial.
| Monday 2:00 - Shah, Reid, Song |
| Tuesday 9:30 - Pesez, Roe, Sadik-Vali |
Maths classes
No specific maths instruction will be offered in College. For those without A-level maths
or the equivalent, the Department puts on a good series of classes which you can attend.
If you sign up and start that course, you are expected to see it through. It is not offered
on a drop-in or try-it-and-see basis.
You should review the material in the Department's
"Maths Workbook,
up to constrained optimisation. (Partial differentiation could be new to some of you.)
This link was working as of 6 October, 2020.
Schedule overview
| Week | Topic | ||
| 1 | Exchange, supply & demand, the firm | ||
| 2 | An application: rent control | ||
| 3 | Individual decision making | ||
| 4 | More individual choice | ||
| 5 | Firms: perfect competition | ||
| 6 | Firms: monopoly | ||
| 7 | Market failure |
Teaching
Lectures
The Economics Department puts on a series of lectures, delivery of which will not follow
the usual format in this unusual time. Consult the "Canvas" pages for the course for more
information on accessing lectures:
link.
Examinations
The Department sets and marks the Preliminary Examination in economics, which you will sit
in June of next year (format tba), and which you must pass before continuing on to your second year.
(There are re-sits in September for any who fail the June exam.) The University thus
does lecturing and examining.
Tutorials, classes, and collections
The College provides teaching in the form of tutorials and classes, and monitors your progress
by means of "collection" exams set and marked by your tutors. A collection normally happens
at the beginning of the term after you have studied a subject, e.g. in 0th Week next January
for this course. Your college tutors will cover most of the same material as the Departmental
lectures, but not necessarily in the same way, at the same pace, or in the same sequence.
Tutors have autonomy about how and what they teach.
With only a small number of sessions together, we cannot possibly cover everything in tutorials.
The point cannot be emphasised too much that your studies at Oxford will be mostly
self-directed and independent. You will teach yourselves and each other, rather than
us teaching you.
Part of our job is to help prepare you for the prelims exam. But our real goal is to help
you become good economists. We do not teach with one eye fixed on the exams.
Do not expect feedback of the form "you could earn two more marks here if ...".
In fact, do not expect marks at all, as I won't give them for tutorial and class work.
(Collections are different.) I want your focus to be on asking questions, articulating answers,
and learning economics, not on earning marks. You will receive a lot of feedback in
tutorial and class discussions, so use them wisely, and actively.
Tutorials will be an opportunity for in-depth discussions of work that you have prepared:
sometimes essays, sometimes shorter questions and problems. You should be doing most of the
talking in a tutorial. A colleague of mine once told me "After a few years our students will
remember almost nothing that we say, but they will remember what they say."
Tutorials should maximise how much you say.
Essays
You will be asked to write essays in some weeks. These should not exceed 1600 words in length,
should have a bibliography listing any sources used, and should be submitted by 12:00 on
the day before your tutorial (both by e-mail and in paper format to my mailbox,
via the porters).
Do not copy text from your sources without attribution: that is plagiarism. Copying many
two-sentence passages from several different sources is plagiarism. Copying three sentences,
in which you change just one or two words in plagiarism. This sort of thing is picked
up by the software we use to check.
The essays are about both substance and style - style in the sense of crafting a persuasive
argument, not in the sense of ornament. A good essay will display lucid economic reasoning,
will make use of tools like diagrams, and will bring relevant evidence to bear. Feel free
to start your research with websites and journalistic sources, but to do good job try to
consult a few sources authored by professional researchers and published in academic journals
(or working papers) or policy reports.
Problem sets
Most weeks you will also be set some economics problems to solve. Unlike the essays,
problem sets do not need to be submitted in advance; bring your written solutions to your tutorial.
Please attach a cover sheet on which you can indicate any problems you have had difficulty with.
Textbooks
There is no single text that the lectures follow or which the Department recommends.
A new and unconventional text that I like a lot is The Economy, by "The CORE Team"
(Oxford: OUP, 2017). You should find hard copies in book shops and the library; the entire
text is also freely available online here.
References to this text will be made in lectures, I expect, but the Department does not
follow the unusual structure of this book (which is part of what makes the book interesting
and worthwhile, I think), making it a little awkward to work with.
There are a number of other texts that cover the right material at about the right level, each with
its own style, its own strengths and weaknesses. I recommend that you have a look at
several and pick a favourite, along perhaps with a backup for a different viewpoint.
Four texts that I think are good, and which are also recommended by the Department, are the
following.
MKR: Morgan, W, M. Katz, and H. Rosen. Microeconomics (McGraw-Hill, 2nd European ed.).
F: Frank, R. Microeconomics and Behaviour (McGraw-Hill, 8th int'l ed.).
V: Varian, H.Intermediate Microeconomics (Norton, 7th int'l ed.).
P: Perloff, J. Microeconomics with Calculus (Pearson, 2nd int'l ed.).
The edition details refer to the versions on my shelf; other editions are fine but may differ
in pagination, chapter numbers, etc. These books are all well-known, widely-used texts. The last two
are somewhat distinctive, V for its abstract style, P for its use of calculus
in the body of the text (rather than appendices or footnotes). F and P have
a lot of interesting examples and applications, something I particularly appreciate.
Week by week schedule
Week 1: Exchange, supply & demand, and the firmEssay topic:
Instead of an essay, this week you will prepare a short presentation about a classic article
on why firms exist. The two I have in mind are listed below; contact me if you want to
read something else. Please coordinate with other members of your tutorial group to ensure
that in each group more than one article can be presented and discussed.
You should be ready to speak for 10 minutes or so and should prepare written notes.
One random individual of the three will not present; that person will submit
her/his notes to me.
Coase, Ronald, "The Nature of the Firm," Economica, vol. 4, no. 16 (Nov. 1937), pp. 386-405.
Simon, Herbert, "Organizations and Markets," Journal of Economic Perspectives,
vol. 5, no. 2 (Spring 1991), pp. 25-44.
Problems for this week here.
Readings: read one (preferably more) of the following for this week.
CORE Units 6, 8*
MKR: Ch. 1
F: Chs. 1, 2
V: Ch. 1
P: Chs. 1, 2
* The CORE text, in Unit 8, makes use of some concepts like marginal cost and isoprofit
curves that are introduced in its earlier chapters, whose sequence we aren't following.
You don't need to understand these concepts for this week, so don't worry if it's
difficult and you think you haven't got it. We will come back to these topics in future.
Essay topic:
Is rent control a good policy to ensure a supply of affordable housing for people of limited means, and to defend historic communities against gentrification?
Here are some readings that you may find a good starting point:
Tierney, John, "The Rentocracy: At the Intersection of Supply and Demand," New York Times
Magazine, 4 May, 1997. Online
here.
Arnott, Richard, "Time for Revisionism on Rent Control?" Journal of Economic Perspectives,
vol. 9 no. 1 (Winter 1995), pp. 99-120.
A recent article from my hometown, partly about issues of gentrification:
here.
There is a Freakonomics podcast on rent control here.
Possibly interesting, but I haven't read, by an early figure in New Institutional Economics:
Cheung, Steven, "Rent Control and Housing Reconstruction: The Postwar Experience of Prewar Premises in Hong Kong,"
Journal of Law & Economics, vol. 22, no. 9 (April, 1979), pp. 27-53.
Cheung, Steven, "Roofs or Stars: the Stated Intents and Actual Effects of a Rents Ordinance,"
Economic Inquiry, vol. 13 (March, 1975), pp. 1-21.
No problems or additional readings this week.
Week 3: Individual decision making
Essay topic:
No essay this week.
Problems for this week here.
Readings:
CORE Unit 3*
MKR: Chs. 2-3
F: Chs. 3-4
V: Chs. 2-6
P: Ch. 3
* There is a focus here (in CORE) on labour supply, which our problems don't
address this week. We'll come back to labour supply later; in the meantime the
technical analysis of choice presented in The Economy is what we want, the
same as applicable to other consumption decisions.
Essay topic:
Why do Americans work so much more than Europeans?
The title is taken from a paper by (Nobel Prize winner) Ed Prescott, which could be
one place to start your reading (you should be able to find plenty on this topic). This topic is
now covered in the CORE textbook and lecture. I am expecting you to go beyond that.
As an alternative you could write on "Why do men work so much more than women?" There
are three margins on which men work more: greater labour force participation; more full-time
relative to part-time work; and more hours per week in FT employment. A possible starting
point, which focusses on a different question but has a lot of relevant material, is
Blau and Kahn, "The Gender Wage Gap: Extent, Trends, and Explanations,"
Journal of Economic Literature, vol. 55, no. 3 (2017).
Problems for this week here.
Readings:
CORE Units 3-4
MKR: Chs. 4-5
F: Ch. 5
V: Chs. 8-10
P: Chs. 4-5
As we are slightly ahead of the lectures, you might want to check out last year's
lecture slides; this year I expect much of this will be repeated verbatim. The slides can
be found on the archived WebLearn site for intro micro, which your Oxford single sign-on
credentials will get you into. The relevant lectures are called "Week2 - Set 2 - Constraints...",
"Week2 - Set 3 - Choice with Constraints...", and "Week3 - Set 1 - Labour Choice".
Possibly this
link will take you directly there.
Essay topic:
No essay this week
Problems for this week here.
Readings:
CORE Units 6, 8
MKR: Chs. 8-10
F: Ch. 9-11
V: Chs. 18-21
P: Chs. 6-8
On the labour discipline model of the CORE text, you may also find useful information
in MKR ch. 17 or P ch. 19.
Essay topic:
No essay this week.
Problems for this week here.
Readings:
CORE Units 6, 7
MKR: Ch. 13
F: Ch. 12
V: Ch. 24/5
P: Ch. 11
* One question on the problem set asks about monopsony. This topic is treated in MKR
ch. 14, F ch.14, V ch. 26, P ch. 15. You will find lecture notes on
monopsony from 2019 here (if the link works).
Essay topic:
How could a carbon tax solve the problem of global warming? (And why don't we have one?)
In January of 2019 the Wall Street Journal published a letter signed by many prominent
economists advocating a carbon tax. This generated a fair bit of coverage in the media,
which would be an accessible way into the discussion.
No problems this week.
Readings:
CORE Unit 12
MKR: Ch. 18
F: Ch. *
V: Ch. 33, 35
P: Ch. 17
* "Externalities, Property Rights, and the Coase Theorem" chapter number varies by
edition.