Course Objectives

Our goal is to see how learning to think like an economist can illuminate the world of public policy. We’ll start with the key building blocks of economics – the four big ideas of cost-benefit analysis, opportunity cost, marginal analysis, and interdependence — and see how these tools can guide you to making better decisions. We will then explore supply and demand and use this to better understand international trade, externalities and environmental problems, the labor market, inequality and poverty, how businesses set prices, how to make strategic decisions, and how to respond to imperfect information, risk and uncertainty. Throughout, we’ll see how the same ideas that illuminate the world of markets are essential to understanding just about every domain of public policy, and along the way, we’ll see that they can help you make better decisions in your everyday life. Welcome to the wonderful world of economics!

Why Study Economics?

Economics provides a powerful lens for understanding the world around us. Many people see economics as synonymous with business and markets. But that’s too narrow of a view. With some practice, you’ll come to see economic forces in action whether you’re on a trading floor, at a wedding, watching a baseball game, or observing your friends interact. Alfred Marshall once described economics as the study of people "in the ordinary business of life.” That sounds about right to me.

Economists have a powerful influence on our world. Economists set prices on everything from ebooks to houses; they figure out how to save the environment, protect intellectual property, and whether to engage in international trade; they evaluate poverty, design social programs, set business strategies, and inform military strategy. They advise Presidents, state legislators, and local mayors, and they help run major corporations, small businesses, schools and hospitals, non-profits and governments. John Maynard Keynes once claimed that the “ideas of economists… both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else.”

Economic analysis can help you make better decisions. Every day, you are an economic actor, making decisions about whether to pursue an education, which partnerships (both romantic and strategic) to pursue, what to buy, what occupation to join, and whether to eat a healthy salad or a delicious burrito. Clear economic reasoning can be an essential input into every facet of your daily life.

Class Meetings

Lectures

Instructor: Professor Justin Wolfers

Contact: jwolfers@umich.edu  

Lecture meeting times: Mondays and Wednesdays, 8:30 - 9:50 am.

Lecture meeting location: 1110 Weill

Course materials and class website: https://umich.instructure.com/courses/304667

Discussion sections

Class sections will be held on Fridays from 10:00 - 11:20 am in Weill 1110. The goal of section is to extend material from the week’s lectures, review recent lecture material, and help you prepare and provide feedback on exams. Your section is as much a part of the class as lectures are, and the material covered in section is examinable. Your GSIs are also available to provide advice and feedback.

Graduate student instructors:

• Emily Fletcher (efletch@umich.edu) and
• Jonathan Rodriguez (jonjrodz@umich.edu)

Office hours

The GSIs are available to provide you advice, feedback and help, and will run office hours four days a week in Weil 3208. They should be your first point of contact for most course-related questions:

• Emily Fletcher: Monday & Wednesday,  11:30 am - 1:00 pm
• Jonathan Rodriquez: Tuesday & Thursday, 11:30 am - 1:00 pm

Professor Wolfers' office hours will be on Mondays from 10:00 am - 11:00 am.

Course Materials

Over recent years Betsey Stevenson and I have developed an entirely new textbook for learning introductory economics. You will be the first cohort to ever study from the complete version. The charge for this: $0. Yes, you read that right: Free. Nada. Nothing. And because I like you so much, I’m willing to offer you a further 50% discount. 

Rather than charge you hundreds of dollars for the book, I’m asking for just two things:

1. That you come to class prepared, having done the reading ahead of time. 

2. That you provide me with feedback on any errors / typos / mistakes as you read them. I will be sending around a few surveys and trying to elicit feedback on how I can do a better job. Please help me improve this book so that I can better help future generations of economics students.

The textbook will only be available electronically (apologies, no hard copies -- an unavoidable constraint that comes with free textbooks), but you can download it for use while offline.

Assignments and Grading

Grading

Your grade for this course will be determined by the points you earn during class as follows. There are a maximum of 1000 points available, broken down as follows:

Midterm #1:                                  150 points

Midterm #2:                                  150 points

Cumulative final:                         400 points

Economics in Action essays:    150 points [3 best scores count]

Graded homework:                       150 points [10 best scores count]

Exams

• Midterm exam #1 will be held in class on October 9. This 80 minute exam will focus on your understanding of the first third of the course, mostly pertaining to supply and demand analysis and its applications. An exam review session will be held on the weekend preceding the exam.
• Midterm exam #2 will be held in class on November 6. This 80 minute exam will focus on your understanding of the second third of the course, which involves applying economic analysis to public policy problems. An exam review session will be held on the weekend preceding the exam.
• Final exam: Is a university-scheduled final exam, held on December 13, from 1:30 – 3:30 pm. This 110 minute final exam will be cumulative, so will test not only the new material you learn in the final third of the class (on how businesses make decisions), but also the material in all previous lectures. The exam review session will be held on Wednesday, December 11 (time and location TBD).

Economics in Action essays

Your task is simple: Take an observation from your everyday life or from the news, and explain it through the lens of a concept that you learned in class. Each “essay” is a mere 500 words. Be creative. Be interesting. Be brief. You will have four opportunities to submit essays, and your best three count for your grade. Each essay should cover topics taught after the due date of the previous Economics in Action essay. To submit, you upload your essays into Canvas, as either a Word, PDF, or text file, by 11:00 pm on the due date:

• Essay #1: September 29
• Essay #2: October 27
• Essay #3: November 17
• Essay #4: December 8

Problem sets

Roughly every week there will be an online problem set to review your understanding of recent lectures. These will typically be due at 11:00 pm on a Tuesday or Thursday. There will be eleven problem sets in total, and the best ten will count toward your final grade. The due dates for these problem sets are all posted on Canvas. You can use your notes and lecture slides when completing these, but the problem sets must be completed independently.

Class Policies

I follow the norms of the Ford School, and so ask you to read about policies concerning academic integrity, accommodations for students with disabilities, student mental health and wellbeing, inclusivity, communications, attendance and assignments and use of technology, here: http://fordschool.umich.edu/academics/expectations

Class Attendance and Participation

Students are expected to attend and participate in class. While the class will have a lecture format, I expect you to bring questions, comments, and answers to class. The class will be much more enjoyable for me, you, and everyone else if we all don’t have to listen to me talk for 80 minutes straight. I will also call on people randomly, at times.

As you formulate a question or comment, please spend a moment thinking about whether it will provide insight for much of the rest of the class (great question!) or just for you (better for office hours).

Class Preparation

Lectures are a complement to the reading, and class sessions will proceed under the assumption that you have done the assigned reading. If you fail to read, you will likely struggle with the material. And if you fail to really keep up with the early material on supply and demand, the course will become basically impossible to complete. All readings will be available online.

Studies show that the best way to retain information is to take notes, using pencil and paper. Yes, this is stone age technology, but it also aids retention enormously. And so I will bring a handout to each class with a set of slides for you to annotate as we go. The slides themselves are not meant to be a comprehensive summary of the material – that is what the lecture is for, and so you should be ready to take notes.

Come to class ready to engage the material, and look your classmates (and me!) in the eye.

Eligible Students

Because this is a core Ford School class, it is only available to Ford School MPP, MPA and doctoral students, and no auditors are permitted.