Final Review Sheet, Practice exam, and practice exam answers. Another practice exam and answers

Answer key to homework #8

Exam is at 8:00 am, Wednesday, May 10, Dana 132.

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Professor Wolaver's Office: 170 Coleman Hall

Phone: 577-1699

Office hours: Monday: 4:30-5:30 Tuesday 4:05-5:05 and by appointment.

Or email me at:


Steve Heckman: Sam Chamovitz:

Susan Beshel:

Office hours: Mondays: 6:00-8:00, Coleman 219

What's the point?

Economic activity pervades everyday life; individuals as well as firms base day-to-day decisions on economic considerations and governments make policies based on economic analysis. Understanding these processes is important to understanding ourselves and the world around us. In a one semester course we cannot hope to cover the breadth of topics and methods of analysis used by economists today, but you should get a good introduction to the various approaches. Ultimately, you should take away an ability to apply these concepts to everyday news and problems, and I hope your appetite will be whetted for the subject and you will continue to explore economics.

Parts of economic theory can in some sense be described as a foreign language. You will learn the basic vocabulary of this language through the definitions of concepts and the use of graphs. Graphs are an integral part of economics; you will have to learn to "read" a graph in the same way you read the English language.

Course Structure

We will begin with a brief introduction into economic history. We will talk about early agrarian societies, the rise of feudalism as an economic state, and talk about the beginnings of the capitalist system that you are more familiar with today. This also give us a context for looking at the ideas of the early political economists.

Adam Smith is generally considered the father of modern neo-classical economics. We will discuss his main ideas, which will give you a preview of the models we will learn in a few weeks. Then, we will move to two major critics of Smith, Karl Marx and Thorstein Veblen. They had very different views of the capitalist system, which we will explore before we move on to the modern mainstream models.

Microeconomics is the study of individual consumer or firm behavior. Here we will learn about equilibrium, marginal decision making, and profit-maximization. We will also cover some applications of microeconomic models in labor economics, industrial organization (what happens in perfectly competitive markets versus monopolies or oligopolies), and public economics (the study of government interventions in the market).

Macroeconomics is the study of the aggregate economy; all of the actions individuals take added together form the macroeconomy. We will start with definitions of concepts that we use to measure the health of the economy: gross domestic production, unemployment and inflation. Then we will look at theories of how these three outcomes are related, and you will be introduced to the ideas of John Maynard Keynes, the last major thinker we will cover.

Economic activity is increasingly taking place on the world stage, instead of being confined within countries. We will look at a few topics and models in trade and finance, to close the semester.

A note on classroom experiments

We will, from time to time, in this course, have group activities where you will be asked to become an "agent" and act according to certain incentives or rules. These could be simple activities where I just ask you to fill out information on what you would do in certain situations, or they could be more complicated, where you will bargain with other classmates over prices, etc... Then, as a class, we will take the information that you generate, individually and collectively, and talk about what it means. These are a fun way for you to "step inside" the models, and get a better idea of how they work in action. It also gives us an opportunity to evaluate how good the models actually are.

Students in the past have enjoyed these activities, but expressed one concern in particular: that they didn't always know what they were "supposed" to do. Don't worry about this; sometimes I don't want you to know what the theory says you should do, I just want you to do what you think is best. You will not be graded on whether you do the "right" or "wrong" thing according to the theory, because theories are not necessarily correct. I'd like for us to use the experiments to talk about how accurate the theory is, and we won't be able to judge that properly if you aren't acting naturally.

Check here for homeworks as they are assigned. The links will remain posted throughout the semester for your reference.

Homework #1: Due Feb. 3

Answer key for homework #1.

Homework #2: Due Feb. 17

Answers to homework #2.

Homework #3 Due Feb. 22, No late assignments accepted.

Answers to Homework #3

Answer key for in-class writing exercise.

Answer key for first midterm.

Homeworks applicable to second midterm (noncompetitive markets to intro to macro)

Homework #4: Due March 7

Answer Key to Homework #4

Homework #5: Due March 28

Answer Key Homework #5

Homework #6

Answer Key homework number 6

Exam 2 Answer Key

Homework #7: Due April 18.

Answer Key for Homework #7

Homework #8: Due May 3, 5:00 in my office

Answer key, homework 8

Films will be shown at 4:00 and 7:00 in Vaughn Lit Auditorium

The film series is another integral part of this course. We will discuss how the films relate to the topics covered briefly before they are shown and after. Questions about the films will be included in homework assignments and on exams, so it is critical that you attend, take notes, and think about the issues raised in the films. The films should be a way to help you apply economic concepts to situations around us in the "real" world. We will spend time each Thursday discussing the film from the previous night.

Film Schedule

Films are shown on Wednesdays, at 4:00 and 7:00 in Vaughn Lit Auditorium.

Text: Economic Principles & Problems combined text from

A note on this text book:

This combined text does not include all chapters from both books; it contains only selected chapters from each. The index unfortunately does not reflect the new page numbering (the publisher was supposed to renumber the index, but did not.). The contents at the beginning of the text are a better source for what is and is not present.

You should look to the Riddell, Shackelford, Stamos chapters for applications of the material to current events and policies. The Rholf chapters will give you more examples of the theory and the graphs.

Follow the links to find our course, either through my name. Many of the readings will be on a common link ( you may have to click through a few more pages to get to the correct reading). I strongly suggest you print out all of the readings listed on the course schedule for the semester and treat these readings as another supplemental packet.

To Download the Adobe Acrobat Reader (needed for some of the Ereserves), click here

I may put additional readings on reserve in the library, as special topics come up.

The points will accumulate as follows:

  • 10% Reading Quizzes
  • 20% Homework
  • 15% Film Write-ups
  • 15% News Write-ups
  • 10% In-class writing assignments
  • 30% Exams
The grading scale is:
  • 93-100 A
  • 90-92 A-
  • 87-89 B+
  • 83-86 B
  • 80-82 B-
  • 77-79 C+
  • 73-76 C
  • 70-72 C-
  • 60-69 D
  • <60 F

The reading quizzes will be conducted on the web; I will post the links and announce them at the appropriate times. You must do them before you come to class the day they are due. Homework assignments will consist of problems, much like you will see on your exams.

The Film and News write-ups are assignments that you will have some discretion over. You will need to finish one (and only one) of each before each exam. The film write-ups will be due by the next Thursday in class. The news write-ups will be due by the Tuesday before each exam, although you are free to do them earlier.

The film write-up should be one to two pages, and should answer at least two of the viewing guide questions for that film. The news write-ups should also be no more than two pages. You need to find an article from a reputable newspaper or on-line news source (the New York Times, the Wall Street Journal, the Economist, or CNN for example). Your job in the write-up is to evaluate the story/information using the theories that you have learned in Economics 103. You are free to choose articles on any subject, as long as you can relate them to the course materials. Please attach a copy of the article to your analysis.

Late Assignments

Late assignments will be accepted for up to four school days (Monday through Friday) past the due date. Each day the assignment is late will result in a 25 percentage point reduction in your score.

If you have a concern with the grading of an assignment or exam, submit a brief (one or two page) written explanation of why you feel your assignment was incorrectly marked, and I will then review the grade.

(This schedule is subject to change as special needs arise)

If you have legitimate conflicts, see me as soon as possible.






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