Home/Start: Unit 1

Jim’s Guide – Overview

Alfred Marshall

Economics is the study of people going about the ordinary business of life.

–Alfred Marshall, 1848-1924

 Welcome to Econ 201, the Principles of Microeconomics.

For almost all of you this is your first college course in economics.  Some of you may have had an economics course in high school, but many have not.  Either way, welcome to the study of micro-economics.  I realize that for most of you this is a “required” course, but I think you’ll find it very interesting and very helpful.

In this first Unit, I want to cover three topics.  First, I want to introduce you to the discipline called “Economics”.  Second, I want to describe how this course is structured (it’s a bit different from most online courses you’ve taken!), including why I have chosen to structure the course this way.   Finally, I want to give you some tips and suggestions on how to study for this course and how to get the most out of it.

Economics: What, Why, and Who

One prominent economist once defined economics as “what economists do”.  Of course, that’s a bit of a circular definition, so I offer the definition at the top of this page from Alfred Marshall, a prominent economist from 100 years ago, observed that economics is about the “ordinary business of life”.  So what is the “ordinary business life”?  It’s what you, and I, and everybody else  do constantly everyday.  What do we do?  We make choices. We gain rewards and benefits.  We suffer costs and consequences.  We make plans.  These are the phenomena economists study:  choices, costs, benefits, plans, and consequences of decisions.   And, these are the phenomena that we will study in this course.

Why should you be interested in studying economics?  Well, there’s the immediate payoff:  the fact that it’s (probably) a required course for your degree, you’ve already paid some tuition (or you wouldn’t be seeing this), and it’s pretty hard to pass the course without studying.  But there are strong additional reasons for studying economics.  One possible reason is that you may wish to become an economist yourself (a profession I heartily recommend).  Most of you won’t become economists, though (which is good for my salary- I don’t need more competitors!).

Understanding economics can be very beneficial for you, even if you never go on to another economics course in your life.  How?  Simple.  Since economics is about choices and plans, understanding economics will help you make better choices and decisions in your life.  So, it’s your choice: learn economics and make better choices in your life, or don’t learn economics and make poor choices.  And, by the way, if you ever hope to own or manage a business or organization, then you definitely need to understand economics.

Obviously, the people who research, write, and “do” economics are economists.  (you might observe, economists have been accused of having a “firm grasp of the obvious”).  But who are economists?  What do they believe?  As you read the textbook, you’ll learn more about the kinds of work economists do.  You may also become acquainted with some of the more famous economists, such Alfred Marshall, or Adam Smith, or Milton Friedman.  But the textbook as a flaw.  It leads the reader to believe that economics is a very settled body of knowledge.  It leads readers to believe that economists are generally all of the same mind on most questions and issues.  And most seriously, the textbook leads the reader to believe that there is only one particular point-of-view in economics.  To be fair, this is not just a criticism of this textbook, it’s a common problem in economics principles textbooks.

The textbook does a pretty good job of explaining what is called “neo-classical economics”. The neo-classical perspective is the most common and dominant view of most issues in the economics profession, but it is not the only one.  One of my objectives as professor is help offer some additional perspectives that may differ from the neo-classical viewpoint.  I’ll be doing that in the readings called Jim’s Guide that are part of each Unit in this course. These other perspectives are often called social, radical, institutional, or environmental economics.  In general, I’ll usually refer to all the alternative viewpoints as “heterodox economics” (neo-classical is the orthodox economics).

In reality, economics is a very dynamic body of knowledge with many diverse points-of-view.  Economics also has a very long history of very active debates about serious, very important issues.  For example, economists have been actively debating and researching topics like the population explosion, how to protect the environment, international trade and jobs, globalization, and the impact of wars for well over 200 years.  Most of these debates aren’t settled.  There’s a lot we don’t know yet.  But, there is a lot that economists DO know and have figured out.  Of course much of what economists do know about how to improve living conditions for people gets ignored by politicians and lay people. Nonetheless, there’s a lot to be gained by studying economics – namely, how we can all become better off even though we may have limited resources.

Probably the most important lesson of all economic perspectives is what economists call “unintended consequences”.  Unintended consequences are what happens when your plans don’t work out right.  You take an action with the objective of accomplishing one thing, yet the way it works out in reality is that the opposite often happens.

How This Course is Structured – What To Do

Two Websites

To complete this course you will use two websites. First, is the one you are reading now, micro.econproph.net.  All study materials that don’t require a grade will be here.  The second site is your school’s learning management system (Desire2Learn at LCC). You will complete all graded assignments such as quizzes, answer forms for worksheets, graded forums, etc. there.

The course is divided into 14 “units” and those 14 units are grouped into 4 “Parts”.  If you roll your mouse over the menu bar above (don’t click or you’ll leave this page) or the navigation tree at your right, you’ll see a menu structure where Part has 3-4 Units below it.  Each unit has its own main page, the “Jim’s Guide to Unit …”. Each Unit page also has some subpages entitled Reading Guide, Closer Look, Practice, Worksheet, and Graded Assignments. Here’s a screen shot illustrating the structure:

screen shot of menus at micro.econproph.net

Most of the activities or readings in this course are required. Please do them in sequence – it’s easier for you.

  • Start by reading the “Jim’s Guide” for the unit.  It’s the page on this website that’s labelled “Unit x..”.  You are reading the “Jim’s Guide” for unit 1 right now.
  • Read the assigned portions of the textbook. What you need to read is listed on the page titled “Reading Guide“.  I’ve also added comments about what’s most important, what can be skimmed, and what can be skipped.
  • Check out the Closer Look page for each unit.  It will have stories, videos, and tutorials that help explain some key concept or model in the unit.
  • Do the Practice quiz.
  • Read and complete the Worksheet, if there is one (not all units have worksheets).  The problem description, the data needed, directions, and the questions you need to answer are listed here on the Worksheet page of this site for each unit.  But, to submit your answers and get credit for the assignment you need to go to your school’s learning management system (D2L at LCC) and enter your answers. Worksheets can be submitted multiple times without penalty. If you get stuck and need help, be sure to check whether there’s a tutorial in the Closer Look page that might help. If you’re still stuck, then post a question in the HELP forums for this course.
  • Finally, be sure you complete all the Graded Assignments.  Typically this is the graded quiz that you complete on your school’s learning management system. But sometimes there will also be a required forum posting or other assignment.

That completes a unit.  Then just lather-rinse-repeat until you’ve completed all 14 units. At that point you are ready for the final exam. If you discipline yourself to follow the recommended schedule you will do fine. Don’t be intimidated by what you’ve heard about “economics” or the “math” involved.  If you just work my system, I can virtually guarantee you success.  I have excellent success rates for students.

I’ve carefully designed and refined this course design over more than 10 years.  I’ve designed this course so that you won’t experience this course as the poor souls in this cartoon do (I hope).

COmic: Hell as an Eternal Economics Seminar

When To Do It

Economics teaches us that time is a very scarce resource.  I’m interested in you learning the most economics possible, but I want to make good use of your time. Therefore I’ve tried to have a minimum number of “hard” deadlines.

Economics is about choices, costs & benefits, and planning.  I have structured this course so that not only will you learn economics, but you have to practice the principles of economics.  I am providing you with a lot of flexibility regarding timing and scheduling of work so you can fit it into your schedule. I try to only schedule hard deadlines when I absolutely must.  For example, there’s a hard deadline to complete Unit 1 including its quizzes and forums.  That deadline exists because I need to know by that date whether you fully understand what to do and intend to complete the course, or whether I should drop you as a no-show. I have administrative reports I have to file with the school that tie to that deadline.

Despite the few hard deadlines, I recommend that you discipline yourself to follow the recommended schedule (see link in your school’s learning management system –  Desire2Learn at LCC). Students who follow the schedule have much higher success rates.  Students who procrastinate or think they can cram a lot into a little calendar time usually find it becomes much harder, takes longer, and they often don’t succeed.  I want you to succeed.

A very important part of the flexibility of this course is that there are few deadlines.  In fact, there are only four “hard” deadlines. Everything else in the Recommended Schedule is a “target” – you should try to hit target dates, but you won’t be “punished” if you don’t.

  • Unit 1 Quiz and Forum must be completed by the end of the first week or you may be dropped.  This is how I know you’re here, you understand what’s required of you, and that you’re started.
  • The second midterm has a hard deadline.
  • All quizzes for the first 11 units must be completed by a hard deadline shown in the schedule.  Typically in a 16 week semester this will be approx 13-14 weeks into the semester.
  • The final exam and everything must be completed by the end of the course.  For the specific date, you should look at the syllabus for this semester.

To help you plan your time you will find  a recommended schedule in your learning management system at your school. You also want to consult the syllabus closely. Keep in mind the recommended syllabus assumes every single day (7 days per week) is a possible work day. Your plans might be different. You might have a long-awaited vacation scheduled for some particular week.  Or your boss at work might want you to work double-shifts one week and not work another.  Or your Aunt Tillie, who you were very close to, dies suddenly and you feel you can’t concentrate for days.  You need to make decisions about the best use of your time and adjust your own schedule. In other words, I don’t know what you have to give up each week to study economics.  The cost might be great one week and lower another.  In economics, we call this the “opportunity cost” (Unit 2).

Everybody’s opportunity cost is different, so I feel I can’t optimize by deciding your schedule for you.  I do not have a fixed deadline for completing each assignment.  Do them in order and pace yourself throughout the semester according to what best fits your schedule. What I do know, is that it is important to have a schedule and a routine.  DO NOT PROCRASTINATE!  (gee, have I said that before?) Students who try to leave all the work to the end of the semester inevitably find the work to be much harder.

Tips and Suggestions on How to Study

  • Plan your work schedule.  Check the Extras link on Suggested Work Pace for more help in planning a realistic schedule.  Don’t let it all pile up on you.
  • Check out the tips that previous students have left.
  • In the textbook, focus on the “core” narrative.
  • Also, when reading the textbook, look at the Reading Guide for the unit first.  Not all of every chapter is required.  Parts of some chapters go into too much detail may only unnecessarily confuse you.  The Reading Guide will tell you what’s really “core” and essential to the course.  It is probably a good idea to print out the Reading Guide pages and have them with you when you read the textbook.
  • When you encounter a graphical model, before you jump to the center of attention (the line or curve or intersection in the middle), look at the axes.  Make sure you understand what two variables are being graphed first.  Then make sure you understand what each point in the graph-space means – in other words, imagine what economic choice or activity is represented by different points in the graph.  Then focus on the curves and intersections.  They’ll make more sense then.
  • Don’t be afraid to read and re-read multiple times. Economics is not easy for most students.  It involves a way of thinking about problems and questions.  Often it is a way of thinking and learning that students have not encountered very often in the earlier schooling.  For example, it’s not a set of facts or definitions to memorize (like history or biology), and it’s not a particular procedure or skill to be repeat practiced (like arithmetic or writing).
  • Try to imagine real people making real choices and decisions.
  • Keep your economics ideas in the back of your mind even when you’re not studying econ.  You should be able to see the economic principles in action in everyday life.  You might go to the store for soda or see an advertisement.  Odds are there are some economic principles illustrated in what you see people do everyday…

…after all, economics is the study of
the ordinary business of life.

— Alfred Marshall