Lower Manhattan Arts Academy (LoMA)

350 Grand Street

New York, NY 10002

Microeconomics Theory


E-mail:                                                                                                                                            Phone: 347-623-3715

This class is a one semester introduction into Microeconomic Theory. You will learn the basic concepts of microeconomic theory and analyze public policy applications. We will learn the relevant concepts on trade, supply, demand, costs of the firm, and monopoly to name a few.

Note of caution: Economic analysis has to be learned, and is often not intuitive. It does require the use of graphs (constructing and interpreting them). We will stay away from a heavy mathematical analysis, but we will have to work with ratios and occasionally equations. It is important to explain how you think when performing economic analysis. You must as a result expect to explain your thinking either during discussions in class or in writing.

What is expected:          

1. Be prepared! Assigned readings must be done prior to class.

2. Contribute to class discussions. Be respectful to your peers. Class discussions are a very important aspect of this class. Open your minds and listen to your peers.

3. Absences must be excused!

Homework will be assigned on a weekly basis and posted at and on the homework section of this website. One full grade is deducted for each day homework is late. Work (explanations) must be shown (given) on all homework, or tests where appropriate. See the homework rubric for details. Quizzes/tests not taken, will count as a zero unless a reasonable documented (medical absence) is provided.

Grading policy is as follows: Homework 35%, 

                                       Class Participation 35%

                                       Tests/Assessments/Special Assignment/Extra Credit 30%. 

Grades can be checked on

List of Topics

Marking Period 1:

1. Ten Principles of Economics

            1. People Face Tradeoffs

            2. The Cost of Something Is What You Give Up to Get It

            3. Rational People Think at the Margin

            4. People Respond to Incentives

            5. Trade Can  Make Everyone Better Off

            6. Markets Are Usually a Good Way to Organize Economic Activity

            7. Government Can Sometimes Improve Market Outcomes

   8. A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services

2. Thinking Like an Economist

            1. The Scientific Method: Observation, Theory, and More Observations

            2. The Role of Assumptions

            3. Economic Models

            4. Model 1: The Circular Flow Diagram;  Model 2: The Production Possibility Frontier

            5. Microeconomics and Macroeconomics

 3. Interdependence and the Gains from Trade

            1. Production Possibility

            2. Specialization and Trade

            3. Absolute Advantage

            4. Comparative Advantage

            5. Opportunity Cost and Comparative Advantage

            6. Comparative Advantage and Trade


Marking Period 2:

 4. The Market Forces of Supply and Demand

            1. Competitive Market

            2. Competition: Perfect and Otherwise

            3. The Demand Curve: The Relationship between Price and Quantity Demanded

            4. Market Demand versus Individual Demand

            5. Two Ways to Reduce the Quantity of Smoking Demanded

            6. The Supply Curve: The Relationship between Price and Quantity Supplied

            7. Market Supply versus Individual Supply

            8. Shifts in the Supply Curve

            9. Equilibrium

            10. Three Steps to Analyzing Changes in Equilibrium

5. Elasticity and its Application

          1. The Price Elasticity of Demand and Its Determinants

          2. Computing the Price Elasticity of Demand

          3. The Midpoint Method

          4. The Variety of Demand Curves

5. Total Revenue and the Price Elasticity of Demand

6. Elasticity and Total Revenue Along a Linear Demand Curve

7. The Price Elasticity of Supply and Its Determinants

8. Computing the Price Elasticity of Supply

9. The Variety of Supply Curves

10. Applications of Supply, Demand, and Elasticity


Marking Period 3:

6. Supply, Demand, and Government Policies

            1. How Price Ceilings Affect Market Outcomes

            2. How Price Floors Affect Market Outcomes

            3. Evaluating Price Controls

            4. Taxes

            5. How Taxes on Buyers Affect Market Outcomes

            6. How Taxes on Sellers Affect Market Outcomes

            7. Elasticity and Tax Incidence

7. Consumers, Producers, and the Efficiency of Markets

            1. Consumer Surplus: Using the Demand Curve to Measure Consumer Surplus

            2. Producers Surplus: Using the Supply Curve to Measure Producer Surplus

            3. Market Efficiency

 8. Application: The Cost of Taxation

            1. How a Tax Affect Market Participants

            2. Deadweight Loss and the Gains from Trade

            3. The Determinants of the Deadweight Loss  

9. Application: International Trade

            1. The Determinants of Trade

            2. The Winners and Losers of Trade

            3. The Arguments for Restricting Trade

Additional Readings will be assigned as we progress in the semester.