My info.

• Name: Xue(sherry) Qiao• Office: 83 Heady Hall• OH: MW 11-12• E-mail: sherryqi@iastate.edu• Course

web:http://www.econ.iastate.edu/classes/econ301/qiao/

• TA: Yoon, sjyoon@iastate.edu

Syllabus

• Textbook: Jeffrey M. Perloff, Microeconomics, 3rd edition. (Not required, but recommended)

• Grading: 1st mid-term: 25% 2nd mid-term: 25% Final: 35% Homework&in-class exercise 10% Bonus 5%Note: Exams will be cumulative, but more weighs will be put

on the later part.

Important Dates

• Tentative exam dates:

1st mid-term: Friday, June 4

2nd mid-term: Friday, June 25

Final: Friday, May 9

Notes: I will put sample exams on-line.

There will be multiple-choice questions and problem-solving questions in the exam.

Preparing for exams

• Best way to prepare for exams is to do the following three things:

1. Attending the class: better understanding and in-class exercise.

2. Do the homework by yourself: help to find where you are wrong and correct it.

3. Do the sample exams.Notes: The questions on exam will be withdrawn

from the above three sources.

Chapter 1: Introduction

• What is economics?

• Positive VS Normative statement

• Mathematic review

What is economics?

• Definition.

Economics is the study of the allocation of scarce resources.

• Branches of economics.

• Behaviors that we study.

• Some examples.

Positive VS Normative

• Defn’s

• Differences.

• Examples.

• Why do we consider these in this course?

• Some practice.

Positive statement

• Def: A testable hypothesis about cause and effect.• Deals with the question of what is• Do not involve value judgment or opinions.• Example:

1,000 jobs were lost because of free trade.

Consumers saved 1 million because of free trade.

Normative statement

• Def: A conclusion as to whether something is good or bad.

• Deals with the question of what ought to be.• Cannot be tested because a value judgment cannot

be refuted by evidence. (subjective).• Example:

We should protect our industries.

We should support free trade.

Practice

• A cut in wages will reduce the number of people who are willing to work.

• High interest rate prohibit many young people from buying their first home.

• The government ought to behave in such a way as to ensure that resources are used efficiently.

• Hong Kong government should increase its budget allocation to reduce the number of illegal immigrants from mainland of China.

More challenging practice

• Smoking is harmful to human.

• You need to stop smoking because smoking is bad for you.

• You need a college education.

• One-third of the college-age population wants to go to colleges at current prices.

Next topic

Supply and demand