VHS AP Economics Syllabus Microeconomics and Macroeconomics Syllabus 33 week course
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1 VHS AP Economics Syllabus Microeconomics and Macroeconomics Syllabus 33 week course Textbook: Krugman, P., & Wells, R., (2006). Economics. NY: Worth Publishers Recommended Reading: Buccholz,, Todd, New Ideas from Dead Economists Friedman, Thomas, The World Is Flat Jevons, Marshall, Murder at the Margin Jevons, Marshall, Fatal Equilibrium Schlosser, Eric, Fast Food Nation The Wall Street Journal, Newsweek, Business Week, The Economist Overall Learning Objectives Develop economic thinking skills to gain an understanding of our role in the economy Identify scarcity, the need to make a choice and the opportunity cost of such choices. Identify and interpret graphs. Apply the graphs to real world scenarios. Describe the basics of economic concepts examining how business has an effect on how the economy operates. Recognize the far-reaching effects of those business decisions on the economy as a whole Master the fundamental knowledge and skills necessary to be successful on the Advanced Placement exams Week 1 VHS Introductory Materials Basic concepts a. Course syllabus b. Appropriate posting c. Establishing expectations d. Student orientation 1. Reading 2. Discussion: Private threads, question threads : Netiquette 4. Complete Homepage 5. Survey 6. Discussion: Reflection Week 2 Getting to Know You/Formation of Groups Basic concepts
2 a. AP Test requirements b. Building a netcourse community 1. Review AP exam info 2. AP exam pretest : Fact or Fiction s 5. Find a study partner Week 3 What is Economics (Chapters 1 and 2) Basic concepts a. Scarcity and choice b. Opportunity costs c. Marginal way of thinking d. Production possibilities curve e. Analysis of graphs f. Absolute and comparative advantage g. Circular flow of economics h. Economic systems i. Marginal analysis 1. Read Chapters 1 and 2 2. Assignment- Chapter review questions Ch 1: 2, 3, 5 Ch 2: 2, 7 3. Assignment: Problem set Comparative advantage v absolute advantage (with mini-lecture) on newspaper article Acorn Book: Micro I /Macro I Week 4 Supply and Demand (Chapter 3) Basic concepts a. Laws of demand and supply b. Determinants of demand and supply i. Differentiate between quantity supplied/demanded and supply/demand c. Market equilibrium i. Apply to real world events ii. Illustrate graphically d. Substitutes/complements e. Normal/inferior goods 1. Reading: Mini lecture 2. Chapter review questions: 1, 3, Assignment: Problem set - Graphing 4. Discussion: Supply and Demand 5. Discussion: Reflection Acorn Book: Micro IIA 1, 2, 3 Week 5 Markets in Action (Chapter 4 and 5) a. Consumer/producer surplus b. Efficiency of markets c. Price ceilings and floors d. Market control
3 1. Chapter review questions: Ch 4: 6, 8; Ch 5: 1, 3, 8 2. Assignment: Problem Set Acorn Book: Micro IIA 1, 3, 4, 5 Week 6 Measuring the Economy (Chapter 23) a. National accounting measures b. Gross Domestic Product i. GDP v real GDP ii. Consumer price index c. Real versus nominal d. Shortcomings of GDP e. Price indexes 1. Test: Chapters GDP calculation card 3. Chapter review questions: 3, 4, 6, Problem Set: Calculating GDP Acorn Book: Macro II A, B Week 7 Macroeconomic Instability (Chapter 22; Chapter 24) Basic concepts: a. Instability b. Inflation/Deflation c. International imbalances d. Unemployment rates 1. Chapter review questions: Chapter 22: 2, 7, 11; Chapter 24: 3, 8, 10 Acorn book: Macro II B, C Week 8 Income and Expenditure (Chapter 27 and appendix) a. Production capacity and economic growth b. Consumer wealth and its effect on the economy c. Income and expenditures model of GDP calculation i. Aggregate demand d. The multiplier process 1. Test: Chapters 22, 23 and Chapter review questions: 2, 5, 8, 11, Appendix 2 3. Problem Set 4. Discussion 5. Discussion: Reflection Acorn book: Macro II A, Macro III A
4 Week 9 Aggregate demand and supply (Chapter 28) a. Components of aggregate demand b. Determinants of aggregate demand c. Wealth and income effect d. Government policies (introduction) e. Determinants of aggregate supply f. Short run versus long run aggregate supply g. AD-AS model h. Macroeconomic policies i. Demand and supply shocks 1. Chapter review questions: 3, 4, 10, 13, 15 Acorn book: Macro III A, B, C Week 10
5 Fiscal Policy (Chapter 29 and appendix) a. Marginal propensity to consume and save b. Spending multiplier c. Impact of government spending i. Demand-side effects ii. Supply-side effects d. Impact of taxes on aggregate demand and supply e. Automatic stabilizers 1. Test: Chapters 27, Chapter review questions: 3, 4, 5, 9, Problem set 4. Discussion 5. Discussion: Reflection Acorn book: Macro V A, B Week 11 Inflation, Disinflation, and Deflation (Chapter 32) a. Types of inflation b. Money and inflation c. Classical model of money and prices d. Output gap and unemployment e. Okun s law f. Relation between unemployment and inflation (Short run and long run Phillips Curve) g. Role of expectations 1. Chapter review questions: 4, 7, 8 2. Problem set: Helped/hurt by inflation Acorn book: Macro V A, B Week 12 Money and Banking (Chapter 30) a. Define money and its functions b. Measures of money supply c. Banks and creation of money i. Money multiplier ii. Money demand iii. Money market d. Federal reserve system i. Structure ii. Tools of federal reserve iii. Real versus nominal interest rates 1. Test: Chapters 29 and Mini-lecture: Loanable funds market 3. Chapter review questions: 1, 4, 6, Problem Set: Money multiplier
6 5. Discussion 6. Discussion: Reflection Acorn book: Macro IV A, B Week 13 Savings, Investment Spending and the Financial System (Chapter 26) a. Savings-Investment b. Loanable funds market c. Financial assets i. Asset price expectations and effect on AS-AD 1. Chapter review questions: 6, 11, 14 Acorn book: Macro IV A, B Week 14 Monetary Policy (Chapter 31 and appendix) a. Goals of monetary policy b. Difference between monetary and fiscal policy c. Money market graphical representation i. Determinants of demand for money d. Real versus nominal interest rates e. Monetary policy and GDP f. Capital versus financial investment g. Types of monetary policy 1. Chapter review questions: 2, 7, 13 Acorn book: Macro IV A, B Week 15 Macroeconomics: Events and Ideas (Chapter 33) a. Economic theories i. Classical ii. Keynesian iii. Monetarist iv. Supply-side v. Rational expectations b. Political business cycles c. Discretionary policy 1. Test: Chapters 26, 30, Chapter review questions: 2, 4, 7, 8 3. Problem Set: What Should President Do? 4. Discussion
7 5. Discussion: Reflection Acorn book Macro V A Week 16 Economic Growth (Chapter 25) a. Sources of growth i. Productivity ii. Factors of production b. Demonstrating graphically c. Role of government 1. Chapter review questions: 4, 5, 7, 14 Acorn book Macro VI A, B, C, D Week 17 International Trade (Chapter 34) a. Calculating gains from trade using comparative advantage b. Barriers to trade i. Tariffs ii. Quotas c. Balance of payments, capital and current accounts d. Floating exchange rates and effect on supply/demand 1. Chapter review questions: 1, 3, 5, 8 Acorn book: Macro VII A, B, C Week 18 International Trade (Chapter 8) a. Comparative advantage revisited b. Effects of imports on capital inflows/outflows c. Effects of exports on capital inflows/outflows d. Effect of international trade on wages e. Protectionism i. Tariff barriers ii. Non-tariff barriers iii. Effect on political arena 1. Chapter review questions: 3, 7, Problem set :
8 Acorn book: Macro VII C, D Week 19 Elasticity (Chapter 6) (Begins micro portion of course) a. Defining and measuring b. Price elasticity of demand c. Determinants of elasticity d. Cross-price elasticity of demand e. Income elasticity of demand f. Price elasticity of supply 1. Test: Chapters 25, 33, 34, and 8 2. Chapter review questions: 1, 5, 7, Problem Set: Understanding Elasticity 4. Discussion 5. Discussion: Reflection Acorn book Micro II A3, A4 Week 20 The Rational Consumer (Chapter 10) a. Utility and consumption b. Diminishing marginal utility c. Budget constraints d. Marginal utility i. Utility maximization ii. Equalizing marginal utility per dollar iii. Optimal consumption e. Substitution/Income effect f. Individual and market demand curves 1. Chapter review questions: 2, 5, 12, 15 : Acorn book Micro II - B Week 21 Consumer Preferences and Consumer Choice (Chapter 11) a. Indifference curves b. Marginal rate of substitution c. Preference and choices d. Using the indifference curve e. Income and substitution 1. Chapter review questions: 2, 4, 7, 9, 13 Acorn book: Micro II - B
9 Week 22 Making Decisions (Chapter 9) a. Opportunity costs and decisions b. Explicit versus implicit costs c. Accounting profit versus economic profit d. Decision making 1. Test: Chapters 6, 10 and Chapter review questions: 1, 4, 8, 11, 14 Acorn book: Micro I-A, II-D-1 Week 23 Inputs and Costs of Production (Chapter 12) a. Production function i. MR=MC b. Accounting versus economic profits/normal profit c. Inputs and costs (define and graph) i. Marginal product and diminishing returns ii. Short and long run costs iii. Economies of scale iv. Cost-minimizing combinations 1. Chapter review questions: 2, 4, 5, 8 Acorn book: Micro II C Week 24 Pure Competition (Chapter 13) a. Characteristics of market i. Demand = Marginal Revenue = Price ii. Normal and economic profit iii. Price takers b. Profit maximization i. Shut down point ii. Changing costs iii. MR=MC rule c. Industry versus individual firm i. Supply curve ii. Changes in costs iii. Long run equilibrium 1. Test: Chapters 9 and Chapter review questions: 1, 3, 5, 8
10 3. Problem Set 4. Discussion 5. Discussion: Reflection Acorn book: Micro II D2 Week 25 Monopoly (Chapter 14) a. Characteristics of market i. Inefficiency of monopoly ii. Market power iii. Price setting behavior iv. Types of monopoly b. Profit maximization i. Pricing models c. Price discrimination d. Effect of elasticity e. Comparison to perfect competition 1. Chapter review questions: 3, 9, 11, 14 Acorn book: Micro II D3 Week 26 Oligopoly and Monopolistic Competition (Chapter 15 and 16) a. Oligopoly i. Characteristics of market i. Interdependence ii. Kinked demand curve ii. Collusion and competition iii. Game theory and strategic behavior b. Monopolistic competition i. Product differentiation ii. Short versus long run iii. Monopolistic competition versus perfect competition iv. Excess capacity and inefficiency 1. Chapter review questions: Chapter 15: 7, 10, Chapter 16: 2, 5, 7 Acorn book: Micro II D4, D5 Week 27 Factor Markets and Distribution of Income (Chapter 20) a. Factors of production b. Marginal productivity and factor demand c. Labor markets and hiring of labor (MRCL=MRPL) d. Derived factor demand e. Market distribution of income
11 1. Test: 13, 14, 15, and Chapter review questions: 3, 4, 6, 10, 15 Acorn book: Micro III A, B, C, D Week 28 Taxes (Chapter 7) a. Microeconomic effect of taxes i. Excise tax b. Tax incidence i. Elastic demand ii. Elastic supply c. Deadweight loss d. Deficit versus debt i. Economic effects e. Laffer curve f. Principles of taxation g. Tax structure and distribution of income 1. Chapter review questions: 4, 7, 9 Acorn book: Micro IV D Week 29 Externalities (Chapter 17) a. Definition b. Marginal social cost c. Marginal social benefit d. Inefficiencies of externalities e. Private versus social costs/benefits f. Remedies of externalities i. Public control of market ii. Maintenance of competition/antitrust 1. Test: Chapters 20 and 7 2. Chapter review questions: 2, 6, 7, 9 Acorn book: Micro IV A Week 30 Public Goods and Common Resources (Chapter 18) a. Characteristics
12 i. Nonexclusion ii. Nonrivalry b. Free rider effect c. Common resources d. Public versus private goods/provision 1. Chapter review questions: 4, 5, 7, Problem set: Public versus private goods Acorn book: Micro IV B, C Week Reviewing for the AP Exam a. Analysis of released exams b. Practice essay writing Activities 1. Test: Chapters 17, and Discussion: Whip activity 3. Assignment: Practice AP Exam question breakdown and explanation 4. Assignment: Elasticity application 5. Assignment: What should the president do? 6. Discussion: Critique and suggestions
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