ECON 111*S
Introductory Microeconomics
        Winter 2009
Detail from The School of Athens showing Plato and Aristotle
                                         by Raphael, 1509–151...
Blank
Julia Zhu
I am the instructor for your course ECON 111*S. Currently, I am a Ph.D. candidate in the
Department of Economics...
TABLE OF CONTENTS

GUIDE TO CORRESPONDENCE STUDY.............................................................................
PART VI
     THE GAINS FROM TRADE REVISITED .............................................................Part VI - 87
    ...
Correspondence Study


                           Q&A
                                COMPENDIUM
                        F...
Q & A COMPENDIUM TABLE OF CONTENTS


IMPORTANT ACADEMIC DATES FOR CORRESPONDENCE COURSES . . . Compendium - i

Continuing ...
IMPORTANT ACADEMIC DATES FOR CORRESPONDENCE COURSES
                Register early to avoid disappointment; all correspond...
Welcome to correspondence study!
The series of questions and answers below are grouped under headings to help you find the...
•        Allot a specific amount of time each day or each week to study in a quiet place away
         from distractions.
...
i Plagiarism (presenting another’s ideas or phrasings as one’s own without proper
        acknowledgement)
        Example...
•       of advising services and resources available on campus
•       Visit the Learning Commons in person at Stauffer Li...
•       The loan period for books is 3 weeks days (excluding mailing time for those ordering
        through the mail). Th...
What is the course guide package?

• The course guide package contains the lessons, assignments, a schedule for submitting...
Mailing Assignments

• attach an Assignment Cover Sheet to the front of your assignment and mail it to the address
  indic...
What happens if I submit an assignment late?

• Check the late assignment policy in your course guide.
• If you submit an ...
Examinations

   Most, but not all, correspondence courses have final exams. Consult your course guide
   for information ...
• employment is common to most correspondence students and, although we
     acknowledge its importance, it is not conside...
b) Distance students writing in “remote” areas where an established test site does not
      already exist (as determined ...
• Appealing to write the exam EARLIER than scheduled: such appeals are very rarely
  successful even with extenuating circ...
ESTABLISHED CENTRES FOR WRITING CORRESPONDENCE EXAMS

British Columbia          Central Ontario                      Nova ...
How do I add a course?

• if you are already registered in a course and want to add a course in the same term, add the
  c...
Associate Dean of Studies
              Faculty of Arts & Science
              F200 Mackintosh-Corry Hall
              6...
I want to request a review of my assignment and exam grades. What is the
procedure?

   Academic Regulation 13 in the Arts...
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Correspondence Study Q&A Compendium
                  E-MAIL AND WEB-CT ACCESS


Introduction

Every student at Queen's is...
•      Browser settings
       Browser settings that are incompatible with WebCT tools frequently cause WebCT users to
   ...
Economics 111*S
                               Introduction to Microeconomics

Introduction

There are two main branches i...
Inquiries Regarding Administrative Concerns

General inquiries about adding or dropping courses, obtaining transcripts, pa...
Readings

All the required readings for the course are contained in the textbook or these course notes:

       Christophe...
Assignments, Examinations and Grading

There are two optional assignments, the solutions for which will be posted to the w...
Please read “Examinations” in the Q & A Compendium (at the front of this course guide)
for IMPORTANT administrative detail...
Assignment Schedule

The assignments are optional and due on the following dates if you wish to have them graded
(assignme...
Inquiries Regarding Course Content

Instructor:      Julia Zhu
Office Location: Mackintosh-Corry A424
Office Hours:    Thu...
Method of Study

This course has two sources of information. First, the textbook provides a complete discussion
and presen...
Economics 111*S

                                     Optional Assignment #1


 Please ensure that each assignment you sub...
Problems

A1-9. Using supply and demand diagrams, separately analyse the effects of each of the
      following on the mar...
A1-11. The tables below show possible combinations of Personal Computers (PCs) and Main
Frame Computers (MFs) that can be ...
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Economics 111*S

                                    Optional Assignment #2

 Please ensure that each assignment you submi...
Problems

A2-9. Suppose the marginal and average variable cost curves for each of the 100 firms in a
      perfectly compe...
A2-11. For each of the short-run production functions (Total Product) curves depicted below,
       graph corresponding ma...
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PART I

                                          INTRODUCTION


What exactly is economics? The 2004 edition of the Oxford...
and predictions. Testing theories is as important as developing them, so we emphasize the interaction
between theorizing a...
_______________________________________

                            Chapter 1: Economic Issues and Concepts
             ...
Opportunity cost is probably the most important concept in economics. There are many everyday
examples. If you choose to w...
We can also use the PPB to think about Four Key Economic Problems that must be solved by any
economic system:
   •   What ...
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econ

  1. 1. ECON 111*S Introductory Microeconomics Winter 2009
  2. 2. Detail from The School of Athens showing Plato and Aristotle by Raphael, 1509–1510 Key Sessional Dates for WINTER 2009 Complete sessional dates at http://www.queensu.ca/calendars/artsci/pg2.html January 2009 5 Winter Term classes begin. 5 Last date for students not registered in any other course to register in Winter Term without a registration administration fee. 16 Students unable to register by this date must appeal in writing to the Associate Dean (Studies) and pay a registration administration fee. 16 Last date to add Winter Term courses. 16 Last date to drop Winter Term courses without financial penalty. February 2009 16-20 Mid-term reading week. 27 Last date to drop Winter Term courses. March 2009 16 Registration for Spring-Summer Session courses begins on QCARD. April 2009 3 Winter Term classes end. 4-8 Winter Term pre-exam study period. 9-25 Final examinations. 10 Good Friday – exams will not be held. 25 Winter Term ends. È
  3. 3. Blank
  4. 4. Julia Zhu I am the instructor for your course ECON 111*S. Currently, I am a Ph.D. candidate in the Department of Economics at Queen’s University. My e-mail address is: hzhu@econ.queensu.ca and my telephone number is 613-533-6660. My office is Mac-Corry A424. The office hours for this course are Thursdays 9:00 am - 12:00 p.m. The website for the course is: http://qed.econ.queensu.ca/walras/custom/100/firstyear/corresp/index111.html. Economics Discussion Forum or Chat Line- http://www.econ.queensu.ca/discus/ is another very important on-line resource for this course. Please make frequent visits to these web sites to keep yourself up-to-date about the course. The midterm exam and solutions to assignments and mid-term exam will be posted in the course website. Any changes in the office hours or important notices will be posted on the Chat Line. Please feel free to ask me as many questions regarding the course materials as you want. Always remember that there are no ‘stupid questions’ in my course. You can contact me by phone or come to my office during the office hours. If you cannot contact me during the office hours, you are always welcome to send me e-mails or post questions/comments on the Chat Line. I will respond to e-mails or questions/comments posted on the Chat Line as early as possible. I highly encourage everybody to take the advantage of the Chat Line. If you need to meet me or call me outside my scheduled office hours, please feel free to send me an e-mail to make an appointment. I look forward to teaching ECON 111*S by correspondence.
  5. 5. TABLE OF CONTENTS GUIDE TO CORRESPONDENCE STUDY........................................................................................... QLINK E-MAIL & WEB-CT.................................................................................................................. Introduction to Microeconomics..................................................................................... Introduction - i Introduction......................................................................................................... Introduction - i Readings............................................................................................................. Introduction - ii Course Outline .................................................................................................. Introduction - iii Assignments, Examinations and Grading ......................................................... Introduction - iv Assignment Schedule........................................................................................ Introduction - vi Inquiries ........................................................................................................... Introduction - vii Method of Study ............................................................................................. Introduction - viii Optional Assignment #1 ............................................................................................... Introduction - ix Optional Assignment #2 .............................................................................................. Introduction - xii PART I Introduction................................................................................................................... Part I - 3 CHAPTER 1: ECONOMIC ISSUES AND CONCEPTS ............................................ Part I - 3 CHAPTER 2: HOW ECONOMISTS WORK ............................................................. Part I - 7 CHAPTER 33: THE GAINS FROM INTERNATIONAL TRADE (PP 802-13)........ Part I - 9 PART II DEMANDAND SUPPLY APPLICATIONS ............................................................ Part II - 15 CHAPTER 3: DEMAND, SUPPLY, AND PRICE................................................... Part II - 15 CHAPTER 4: ELASTICITY ..................................................................................... Part II - 20 CHAPTER 5: MARKETS IN ACTION.................................................................... Part II - 29 PART III HOUSEHOLD DECISIONS ....................................................................................Part III - 34 CHAPTER 6: CONSUMER BEHAVIOUR ............................................................Part III - 34 SUPPLEMENTARY CHAPTER: OTHER HOUSEHOLD DECISIONS ..............Part III - 42 PART IV PRODUCER THEORY ............................................................................................Part IV - 51 CHAPTER 7: PRODUCERS IN THE SHORT RUN ..............................................Part IV - 51 CHAPTER 8: PRODUCERS IN THE LONG RUN ................................................Part IV - 59 PART V OUTPUT MARKETS................................................................................................Part V - 63 CHAPTER 9: COMPETITIVE MARKETS .............................................................Part V - 63 CHAPTER 10: MONOPOLIES, CARTELS AND PRICE DISCRIMINATION….Part V - 70 CHAPTER 11: IMPERFECT COMPETITION & STRATEGIC BEHAVIOUR…..Part V - 75 CHAPTER 12: ECONOMIC EFFICIENCY & PUBLIC POLICY ………………..Part V - 82
  6. 6. PART VI THE GAINS FROM TRADE REVISITED .............................................................Part VI - 87 CHAPTER 33: THE GAINS FROM INTERNATIONAL TRADE (PP 813-22)…Part VI - 87 CHAPTER 34: TRADE POLICY ...........................................................................Part VI - 90 PART VII CHAPTER 13: HOW FACTOR MARKETS WORK............................................ Part VII - 93 FORMS FORMS &. . . Library Loan Request Form End-of-Year Course Evaluation Assignment Cover Sheets Academic Change Form Biographic Change Form Transcript Request Form January 2009
  7. 7. Correspondence Study Q&A COMPENDIUM Fall-Winter 2008-09 MOVING? PLEASE REMEMBER: If you move, inform the University as soon as possible. • change your mailing address on QCARD • or complete the Biographic Change form in the Forms section of the course guide and send it to the Office of the University Registrar — address is on the form • the University’s records will then be updated so that we have your current address. a change of address will NOT update your exam location. If, as a result of moving, your EXAM • LOCATION must be changed, notify CDS by telephone at 613 533-2470, attention Candy Randall- Quesnel or fax 613 533-6805 or email randallc@queensu.ca
  8. 8. Q & A COMPENDIUM TABLE OF CONTENTS IMPORTANT ACADEMIC DATES FOR CORRESPONDENCE COURSES . . . Compendium - i Continuing & Distance Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compendium - ii Academic Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compendium - ii Computer Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compendium - v Student ID Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compendium - v Library Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compendium - v Course Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compendium - vi Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compendium - vii Examinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compendium - x Adding or Dropping a Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compendium - xiv Grades . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compendium - xvi
  9. 9. IMPORTANT ACADEMIC DATES FOR CORRESPONDENCE COURSES Register early to avoid disappointment; all correspondence courses have limited enrolments. EVENT DATES Fall Term Begins 8 September 2008 Fall - Winter Session Begins 8 September 2008 Winter Term Begins 5 January 2009 È Last date to register/add Fall and Fall - Winter courses 19 September 2008 After September 19 students must appeal in writing to the Associate Dean (Studies) and pay a registration administration fee. Last date to register/add Winter courses 16 January 2009 After January 16 students must appeal in writing to the Associate Dean (Studies) and pay a registration administration fee. È Deadline for Dropping a Course (Full Refund) Fall term courses 19 September 2008 Fall - Winter session courses 19 September 2008 Winter term courses 16 January 2009 Deadline for Dropping a Course (No Academic Penalty) Fall term courses 31 October 2008 Fall - Winter session courses 16 January 2009 Winter term courses 27 February 2009 È Deadline for requests to change Exam Centre location Fall term courses 31 October 2008 Fall - Winter session courses 16 January 2009 Winter term courses 27 February 2009 Register with Health Counselling & Disability Services for Special Exam Accommodation Fall, Fall-Winter, Winter courses as soon as possible after registration È Final Examinations* Fall term courses 3 - 18 December 2008 Fall - Winter session courses 9 - 25 April 2009 Winter term courses 9 - 25 April 2009 *The University reserves the right to adjust the published exam period dates, as required. Compendium - i
  10. 10. Welcome to correspondence study! The series of questions and answers below are grouped under headings to help you find the information you need quickly. Still have questions? Or suggestions? Please contact us! Throughout this document, Continuing & Distance Studies is referred to as CDS. Continuing & Distance Studies How do I contact CDS? Location The Division of Continuing & Distance Studies/Faculty of Arts & Science F-200 Mackintosh-Corry Hall (main level) 68 University Avenue Queen's University Kingston, ON K7L 2N6 Hours Monday to Friday 9:00 a.m. - 4:00 p.m. Telephone number 613 533-2470 FAX number 613 533-6805 • our fax machine receives 24-hours per day Web site http://www.queensu.ca/cds/ • Includes current correspondence offerings (with course outlines), admission, registration and fee information, important academic deadline dates, links to student resources, and more E-mail address cds@queensu.ca • Can’t find the information you need on the CDS web site? Please send us an email. Academic Success How can I maximize my chances of doing well in my correspondence course? • Ensure you have all the materials necessary to get started on your course: course guide, textbooks and any other items specified in your course guide. Compendium - ii
  11. 11. • Allot a specific amount of time each day or each week to study in a quiet place away from distractions. • Note the assignment due dates in your course guide. Read your course guide to determine what the instructor is asking you to do in order to prepare each assignment, e.g. textbook readings, supplementary library readings, or accessing multimedia presentations, etc. Then, working back from the due date, you will be able to plan a schedule that will enable you to complete the work and submit your assignment on time. • Try the Assignment Calculator at: http://www.queensu.ca/qlc/calculator.html for help in planning your assignment completion. • Some correspondence students have found that initially their grades are lower than anticipated. This is not unusual as it may take time to familiarize yourself with your instructor's expectations; it is important to be aware of this so as not to become discouraged. If you encounter difficulty with your courses, we encourage you to get in touch with your instructor or CDS. What sort of time commitment will my correspondence course require? • You can expect to spend at least 15 hours per week studying and preparing assignments for a 12-week half-credit or a 24-week full-credit correspondence course. • More time is required for a full-credit course in the compressed spring/summer session. What is academic integrity? The following is excerpted from Academic Regulation 1 Academic Integrity in the • Arts & Science Calendar For the most recent version of this academic regulation, please consult the internet at www.queensu.ca/artsci. The Queen’s University Senate Policy on Academic Integrity may be found on the internet at www.queensu.ca/secretariat/senate/policies/AcadInteg.html. a DEFINITION Academic integrity provides a foundation for the “freedom of inquiry and exchange of ideas” fundamental to the educational environment at Queen’s University (see www.queensu.ca/secretariat/senate/policies/princpri/index.html). As a member of the Centre for Academic Integrity (CAI), Queen’s subscribes to the definition of academic integrity “as a commitment, even in the face of adversity, to five fundamental values: honesty, trust, fairness, respect, and responsibility” ( see www.academicintegrity.org/ ) c DEPARTURES FROM ACADEMIC INTEGRITY Any departure from these values compromises the “free enquiry and the free expression of ideas, both of which are basic to the University’s central purpose” (www.queensu.ca/secretariat/senate/policies/princpri/index.html). The following list defines the domain of relevant acts without providing an exhaustive list: Compendium - iii
  12. 12. i Plagiarism (presenting another’s ideas or phrasings as one’s own without proper acknowledgement) Examples: copying and pasting from the internet, a printed source, or other resource without proper acknowledgement; copying from another student; using direct quotations or large sections of paraphrased material in an assignment without appropriate acknowledgement; submitting the same piece of work in more than one course without the permission of the instructor(s). ii Use of unauthorized materials Examples: possessing or using unauthorized study materials or aids during a test; copying from another’s test paper; using unauthorized calculator or other aids during a test; unauthorized removal of materials from the library, or deliberate concealment of library materials. iii Facilitation (enabling another’s breach of academic integrity) Examples: making information available to another student; knowingly allowing one’s essay or assignment to be copied by someone else; buying or selling of term papers or assignments and submitting them as one’s own for the purpose of plagiarism. iv Forgery (submitting counterfeit documents or statements) Example: creating a transcript or other official document. v Falsification (misrepresentation of one’s self, one’s work or one’s relation to the University) Examples: altering transcripts or other official documents relating to student records; impersonating someone in an examination or test; submitting a take-home examination written, in whole or in part, by someone else; fabricating or falsifying laboratory or research data. h FAILURE TO ABIDE BY ACADEMIC RULES Students must abide by all Faculty and University academic rules, including rules imposed by course instructors, or others (for example, teaching assistants, laboratory demonstrators, guest or substitute instructors) regarding the preparation, writing, and submission of assignments, or the writing of tests and examinations. Students must also abide by other University-wide academic regulations, such as those governing ethics reviews. For penalties that can be assessed and procedures to be followed if a student fails to abide by academic rules, see Regulations 1d and e (available online at http://www.queensu.ca/calendars/artsci/pg4.html). For a complete list of the Academic Regulations at Queen's University, please consult the Faculty of Arts and Science Calendar. You may view the Calendar online at: http://www.queensu.ca/calendars/artsci/ I would like help resolving a problem with my course, choosing my courses, planning my degree program, improving my study skills, etc. What can I do? • Call CDS at (613) 533-2470 to arrange an appointment with an academic advisor. • Visit http://www.queensu.ca/artsci/advising/index.html for a comprehensive list Compendium - iv
  13. 13. • of advising services and resources available on campus • Visit the Learning Commons in person at Stauffer Library or visit the web site http://www.queensu.ca/qlc/ for information about study skills workshops and other academic resources available to you. Computer Requirements Do I need to have a computer to take correspondence courses? • Internet service is required for all correspondence courses to access online materials on WebCT and for email communication with the University. • A current operating system and Mozilla Firefox (PCs) or Safari (Macs) are preferred broswers for WebCT • High speed Internet is recommended for streaming media • See the Email & WebCT page in your course guide for details on how to activate your NetID and begin using Queen’s internet resources. • If you do not have Internet service, please contact CDS for assistance. Student ID Card I’m a new student. How do I get a student card? What do I use it for? • In Spring - Summer, all new students will be mailed a validated off-campus student card, even if they are taking on-campus courses. Returning students will be mailed a validation sticker. • Students who take on-campus courses in the Fall-Winter need to trade in their off- campus card for a photo ID card at the Office of the University Registrar, 74 Union Street, Gordon Hall Room 125. • Students are required to show their student card when writing final exams and borrowing library materials in person. • For more information see: www.queensu.ca/registrar/studcard Library Access Will I have access to Queen’s Library if I am at a distance? • Any supplementary or additional readings which may be listed in your course guide are available from Stauffer Library's Circulation Desk. If you are not within travelling distance of the university, you may use the distance education library loan request form (http://library.queensu.ca/librequest/de_request.php or the paper form found in the FORMS section of your course guide) to request books from this list. If you are able to come to the campus, bring your student card with you so that you can charge books out of the Library. Stauffer Library is open during the week and is also usually open on the weekends: call ahead for exact hours (613) 533-2524 or visit the web site: http://library.queensu.ca/ Compendium - v
  14. 14. • The loan period for books is 3 weeks days (excluding mailing time for those ordering through the mail). The length of time allowed for mailing will vary with the distance the books are sent from the University. A fine of 40 cents per day per book will be charged for books not returned on time. • Stauffer Library will send the books to you by courier at no charge. You may return them by Canada Post. There is a $3.00 cost per requested photocopied article. There is no charge for borrowing books. • You are expected to securely wrap any materials which you return through the mail and pay the replacement cost and a processing fee for any book which you damage or lose. Am I able to borrow books from another university library? • As a student registered in an Ontario university, you automatically have borrowing privileges in all other Ontario university libraries (with the exception of OISE and the University of Toronto). All you need is a student card with a current validation sticker. If you did not receive a validation sticker, you may request one by writing to the Registrar's Office, Richardson Hall, Queen's University, Kingston, Ontario, K7L 3N6. Remember to include your name, address, and student number in your letter. • If you want to gain admittance to libraries affiliated with educational institutions outside of Ontario, Queen's can supply you with a letter of introduction. Address your requests to the Chief Librarian, Stauffer Library, Queen's University, Kingston, Ontario, K7L 5C4. Course Materials I’ve just signed up for a correspondence course. How do I begin? • The first step is to get your textbooks and course guide package from the Campus Bookstore. • Texts and course guide packages are generally available about two weeks before the beginning of term. • The course guide package is also available to registered students on WebCT <www.its.queensu.ca/webct> beginning the first day of term. • If you are in Kingston, you can pick up the texts and course guide in person from the Campus Bookstore (it is located in Clark Hall on Queen’s Main Campus). • Or order online from the Bookstore web site <www.bookstore.queensu.ca>, by fax (613) 533-6419, or phone at (613) 533-2955 or (800) 267-9478 and have the course materials shipped to you. Compendium - vi
  15. 15. What is the course guide package? • The course guide package contains the lessons, assignments, a schedule for submitting assignments and administrative information. Is there a charge for the course guide package? • Yes. The printed course guide package distributed through the Bookstore is sold for a minimal price that covers printing and handling costs. • However, registered students have access to the course guide on WebCT <www.its.queensu.ca/webct> beginning the first day of term. Students may download the course guide file (in .PDF format) to their own computers and print sections as required. • Adobe Acrobat Reader is required to view the file. If you do not already have this program on your computer, download it for free from <www.adobe.com> Once I have the textbooks and course guide package, can I begin to work on the course? • Yes. Look through the course guide to familiarize yourself with its contents. Be sure to read the introductory pages to see how to contact the instructor, to find the assignment due dates and lesson schedule and any special instructions the instructor has given. Assignments How do I submit my correspondence assignments? • Check your course guide: Most courses accept assignments on paper; these may be submitted in person, by fax or by mail to CDS. Some courses permit or require electronic submission by email or WebCT. Your course guide will tell you. When do I submit my assignments? • Ensure that your assignments arrive at CDS on or before the due date. We record the date assignments arrive at the office, not the postmarked date. Before Submitting Your Assignment make sure that your work is legible, double-spaced, and on 8 ½ x 11 inch paper C number the pages of your assignment C write your name, student number, and course on each page of your assignment C for assignments on paper, complete and attach an Assignment Cover Sheet (found in the C Forms section of the course guide) to the front of each assignment. keep a copy of your assignment. If your assignment is lost in transit, we will ask you to C resubmit it. Compendium - vii
  16. 16. Mailing Assignments • attach an Assignment Cover Sheet to the front of your assignment and mail it to the address indicated on the cover sheet. Submitting Assignments in Person • place your assignments in the drop box found in the Arts & Science Faculty Office (F-200, Mackintosh-Corry Hall). If the office is closed, there is an after hours drop-off slot next to the front door. • No envelope is required, but please remember to staple your Assignment Cover Sheet to your assignment before handing it in. Faxing Assignments • our FAX number is 613 533-6805 and the machine receives 24 hours a day. • remember to include an Assignment Cover Sheet and indicate the total number of pages being FAXed. • include the following information on every page of your FAX, eg. Jane Smith Student# 123-4567 Course Code Page 1 of 5 Tel# 613-555-2345 • leave w-i-d-e margins (one inch) on top, bottom and sides of each page of your FAX. • check your confirmation report to ensure all pages have transmitted. We check incoming faxes for legibility and number of pages transmitted—if there is a problem we will contact you. • please keep the original copy of your assignment; do not mail it to us in addition to FAXing it. • Sorry, we cannot return graded assignments by FAX. Submitting Assignments Electronically (E-mail and WebCT) • See your course guide for details. • Assignments may be submitted by email only in instances where the instructor or tutor- marker has indicated that e-mailing is acceptable. When will my assignment be marked and returned? • The amount of time required to return graded assignments varies from course to course. • We try to have your assignments graded and returned to you within two weeks of receipt, but it may take as long as four weeks for an assignment to be returned. You may, therefore, be required to submit an assignment before the previous one has been returned. What happens if I submit an assignment early? • If you submit an assignment early, it will not necessarily be graded early since, for the sake of fairness and consistency of marking, tutor-markers prefer to grade several assignments at a sitting. Compendium - viii
  17. 17. What happens if I submit an assignment late? • Check the late assignment policy in your course guide. • If you submit an assignment late you can expect that the grading will be delayed, since the tutor-marker will have moved to the next section of the course and will mark your assignment as time permits. • If you have an illness or other extenuating circumstances which prevent you from submitting an assignment on time, contact your instructor to request an extension. If you have difficulty reaching your instructor, contact us at CDS. • Do not send the bulk of your assignments near the end of the course. This will create major delays in grading your assignments so that you may not have any feedback on your work before the final exam. It may result in a loss of marks or even rejection of your assignments. If you have questions regarding submitting late assignments, contact your instructor. How is my assignment returned? • If you are on campus regularly, please pick up your paper-based assignment from the Continuing & Distance Studies/Faculty of Arts & Science Office, F200 Mackintosh-Corry Hall. Assignments are filed alphabetically by last name in the assignment pick-up cabinet. • If you are not on campus regularly, check the appropriate box on the assignment cover sheet and fill in your mailing address. It will be mailed back to you. • If a preference as to assignment return is not indicated, the assignment will be held for pick up. • Assignments submitted electronically are generally returned electronically. What is an “A”, “B”, “C” grade, etc? • The following table shows the alphabetical grade and its numerical equivalent in the Faculty of Arts & Science at Queen's University. A 80 to l00 per cent B 65 to 79 per cent C 50 to 64 per cent F less than 50 per cent • The grade will be written on your assignment. However, the comments made by the instructor or tutor-marker are far more important than the grade, as they are designed to help you improve your work. Compendium - ix
  18. 18. Examinations Most, but not all, correspondence courses have final exams. Consult your course guide for information on examinations and the use of special aids (dictionary, open book, calculators) during the exam. Who is a KINGSTON student? (Exam Centre Location for Kingston ON Campus is #4251) • A KINGSTON student is one who is registered in a day or evening course as well as correspondence course(s) in the same term. Who is a DISTANCE student? • A DISTANCE student is one who is registered exclusively in correspondence course(s) in a given term and does not reside in Kingston or surrounding area. What is an Exam Centre? • An Exam Centre is a site where a student writes a proctored (supervised) exam. When you registered for your correspondence course on QCARD, you were prompted to enter an Exam Centre code. I don’t remember which Exam Centre code I entered on QCARD. How can I find out where I am writing my exam? • You can view your Exam Centre code for correspondence courses on QCARD after registration. • Requests to change exam centre locations must be directed to: Candy Randall-Quesnel, Correspondence Examination Coordinator, at Continuing & Distance Studies (email: randallc@queensu.ca, fax: 613 533-6805, telephone: 613 533- 6000, Ext. 77188). Here are some rules which govern where you will write your exam: • if you are a KINGSTON student (see definition above) you MUST write your exam(s) on the Kingston campus (Exam Centre Location for Kingston ON Campus is #4251) • only DISTANCE students (see definition above) are permitted to write at off-campus Exam Centres • all registrations will be checked to determine student eligibility to write at off-campus Exam Centres • ***it is the student’s responsibility to read all of the information/regulations pertaining to exams contained in both the course guide (see Guide to Correspondence Studies section) and the regulations in the current Arts and Science calendar. Furthermore, students are expected to write examinations at the date/time published and are not to book vacations, appointments, etc. during the exam session.*** Compendium - x
  19. 19. • employment is common to most correspondence students and, although we acknowledge its importance, it is not considered sufficient grounds to reschedule an exam. Please direct any questions to the Correspondence Examinations Coordinator by the published deadlines. I didn’t indicate an Exam Centre when I registered. What happens in this case? • The Correspondence Examination Coordinator will assign an Exam Centre code after looking at your course registration for the term to determine if you are Kingston or Distance student (see definitions above). • Distance students will be assigned an Exam Centre code based on their “mail” address on QCARD. This is why it is important to keep this address up to date at all times. • Please remember: students are responsible for keeping the ‘mail’ address on QCARD up to date at all times as this is the only address used by the University for the purposes of scheduling exams. How can I change my Exam Centre? Is there a fee involved? To request a change to your Exam Centre: • you must notify Candy Randall-Quesnel, the Correspondence Examination Coordinator • you must request the change prior to the published deadlines (below) or you will be subject to an administrative fee of $100.00 per exam affected! • remember that only DISTANCE students will be permitted to write at off-campus Exam Centres Deadlines for changing Exam Centres for Fall 2008 and Fall - Winter 2008-09 Examination Sessions Fall Term 31 October 2008 Fall - Winter Session 16 January 2009 Winter Term 27 February 2009 How will I know the date, time, and location of my exam? If you are a KINGSTON student, you will write your exam on the Kingston campus. You will be required to access the exams schedule at www.queensu.ca/registrar/exams/ for both on-campus and correspondence exam details. The exam timetable is posted about eight weeks before the exam period begins (3 - 4 weeks for Spring, Spring/Summer and Summer exams). Kingston students will also be linked to the Queen’s exam schedule through the Web-CT course site using their Queen’s NetID. * If you are a DISTANCE student, you will be notified via Queen’s email when exam centre details become available on your Web-CT course site. Exam information will be posted on Web-CT as quickly as the proctors from the external Exam Centres can provide the final details. a) Students who do not have access to the Internet must notify the Examinations Coordinator immediately following registration. Compendium - xi
  20. 20. b) Distance students writing in “remote” areas where an established test site does not already exist (as determined by the Examinations Coordinator) will not need to access Web-CT for this purpose because they are directly involved in setting up the actual exam with the proctor. c) Incarcerated students will be notified of the date/time/location of their exam in writing approximately three weeks before the exam session begins. d) Distance students who have a deferred exam from a previous term must notify the Examinations Coordinator by the “deadline for changing exam centres” (see above) pertaining to the exam session in which they expect to write. N.B. See your course guide for information on activating your Queen’s NetID and accessing WebCT or visit: http://www.queensu.ca/its/netid.html Are exams at the Kingston campus and at off-campus Exam Centres scheduled at the same time? • The date and time of an exam is normally the same for both on-campus and off-campus centres, but the AM and PM start times may vary for exams written at off-campus exam centres. • Occasionally, it may be necessary for the Correspondence Examinations Coordinator to change the date/time of an exam to resolve conflicts with other exams or proctor access at the off-campus exam centres. Notification will be sent to your Queen’s email account in these cases. Are correspondence course exams held in the evenings or on weekends? • NO! Weekend or evening exams are rarely scheduled at off-campus exam centres. You may expect that all exams written at off-campus sites will be held during the normal work day, either in the morning or early afternoon. I can’t write my exam as scheduled. How can I change the date and time of my exam? Is there a fee involved? • Dates and times for examinations are set by the University and students are expected to comply! DO NOT schedule vacations, appointments, etc., during the exam period. Consult your course guide or the Sessional Dates section of the current-year Arts and Science calendar for the exam period. Note: The University reserves the right to adjust the published exam period dates, as required. • Any student who requests and is permitted a change in the date/time of an exam will be subject to an administrative fee of $100.00 per exam affected, regardless of the timing of the request, providing the request is first approved by the Correspondence Examination Coordinator, the course instructor, and/or the Associate Dean of Studies Compendium - xii
  21. 21. • Appealing to write the exam EARLIER than scheduled: such appeals are very rarely successful even with extenuating circumstances. Students must first notify the Correspondence Examination Coordinator, Candy Randall-Quesnel, and appeal in writing to both the course instructor and the Associate Dean of Studies. The Associate Dean of Studies may be contacted through the Faculty of Arts & Science, F200 Mackintosh-Corry Hall, Queen’s University, Kingston, Ontario K7L 3N6 or by calling (613) 533-2470. • Appealing to write the exam LATER than scheduled: students must appeal in writing to both the course instructor and the Correspondence Examination Coordinator, Candy Randall- Quesnel. I’m scheduled to work at the same time as I’m scheduled to write my exam. Can I reschedule my exam for this reason? • NO. Employment is common to most correspondence students and is not considered a valid reason to postpone or reschedule an exam. Do I need to show identification at my exam? • Yes, photo id is required for exams. Students are required to bring their Queen’s Photo ID to all exams. • Students writing exams without a Queen’s Photo ID card (or a Queen’s off-campus card with supporting photo ID for distance students) must contact the Correspondence Exams Coordinator ahead of time for further instructions. • Students may obtain a replacement student card (photo ID or off-campus card) for $20 at the Office of the University Registrar, 74 Union Street, Gordon Hall, Rm 125; telephone (613) 533-2040 (fall-winter office hours 8:30 am - 4:30 pm). • The Queen’s photo ID (or off-campus card) does not need to be validated with a sticker for the purposes of writing an exam. Are there correspondence exam accommodations for disabled students? • Students requiring accommodations for exams in correspondence courses due to special needs must contact the Correspondence Exams Co-ordinator and Health, Counselling and Disability Services by the published deadlines to be assessed so that arrangements can be finalized well in advance of the exam period. Who do I contact if I change my address? • Change your address on QCARD. • However -– a change of address will NOT update your exam location. • If, as a result of moving, your EXAM LOCATION must be changed, notify CDS by telephone at 613 533-2470, attention Candy Randall-Quesnel, or fax 613 533-6805 or email randallc@queensu.ca • Students are responsible for keeping the ‘mail’ address on QCARD up to date at all times as this is the only address used by the University for the purposes of scheduling exams. Compendium - xiii
  22. 22. ESTABLISHED CENTRES FOR WRITING CORRESPONDENCE EXAMS British Columbia Central Ontario Nova Scotia 0015 Comox 3020 Barrie 6202 Amherst 0071 Kelowna 3051 Collingwood 6250 Halifax 0143 Trail 3176 Hamilton 6336 Sydney 0158 Vancouver 3351 Orillia 6343 Truro 0159 Victoria 3352 Oshawa 3376 Parry Sound N.T. Alberta 3377 Peterborough 6778 Yellowknife 0215 Calgary 3400 Richmond Hill (only available 0229 Edmonton during Spring/Summer term) Yukon 0238 Ft. McMurray 3451 St. Catharines 6965 Whitehorse 3476 Toronto Saskatchewan 3477 Brampton Newfoundland 3478 Mississauga 0529 Regina 7060 Cornerbrook 0536 Saskatoon 7151 Gander Eastern Ontario 7457 St. John’s Manitoba 4027 Belleville 4028 Brockville 0744 Thompson International 4051 Cloyne 0764 Winnipeg 8102 Edinburgh, Scotland 4052 Cornwall 8125 Fort Myers, Florida USA 4176 Hawkesbury Northern Ontario 8158 Glasgow, Scotland 4251 Kingston 1028 Bracebridge 8176 Bermuda 4350 Ottawa 1101 Elliot Lake 8179 Hong Kong 4376 Pembroke 1251 Kapuskasing 8183 International Study Centre 4451 Smiths Falls 1252 Kenora Herstmonceux Castle, England 1253 Kirkland Lake 8281 London, England Quebec 1305 Marathon 8329 New York, NY, USA 5113 Montreal - Concordia 1327 North Bay 8465 Seoul, Korea 1452 Sault Ste. Marie 8485 Trinidad New Brunswick 1454 Sudbury 1476 Thunder Bay 6036 Fredericton Penitentiaries 1477 Timmins 6085 Moncton 9028 Bath Institution 6136 Saint John 9051 Collins Bay Western Ontario 9127 Frontenac Institution 2160 Guelph 9151 Gravenhurst 2276 London 9226 Joyceville 2351 Owen Sound 9251 Kingston 2500 Sarnia 9302 Millhaven 2552 Windsor 9551 Warkworth 2553 Waterloo Adding or Dropping a Course The rules that govern adds and drops are established by Queen's, not CDS. Therefore, if you wish to add a course or drop a course, you must follow the University policies. A complete list of these regulations can be found in the Faculty of Arts and Science calendar. A summary of the rules follows. Compendium - xiv
  23. 23. How do I add a course? • if you are already registered in a course and want to add a course in the same term, add the course online on QCARD • alternatively, fill out the Academic Change Form at the back of the course guide and fax or mail it to CDS • remember to contact the Campus Bookstore to receive the textbooks • students residing overseas must take into account the longer transit time for course materials • please add any courses and request course materials well before the deadline dates. How do I drop a course? • you may drop a course online on QCARD. • alternatively, complete and fax or mail the Academic Change Form at the back of the course guide or simply write us a letter before the last date to drop without failure. Remember to include your student number and mailing address. • Be sure to familiarize yourself with the drop deadline dates. They are listed in the course guide and in the Arts & Science course calendar: http://www.queensu.ca/calendars/artsci/index.htm • Failure to submit assignments does not constitute withdrawal from the course, and doing so without officially dropping the course will result in your instructor assigning you a failing grade. Will I get a fee refund? • Fee refunds are calculated from the date the course is dropped from your academic record. • When the full-refund period ends an initial 25 per cent is deducted from the total fee charged; thereafter a daily percentage is deducted from the total fee charged until no refund is left. • The last date to drop a course and still receive a full refund is earlier in the term than the last date to drop a course without receiving a failing grade. • Students who need assistance in calculating their fee refund after officially dropping a course should contact the Office of the University Registrar at 613 533-6894 • You may also visit http://www.queensu.ca/registrar/fees/refund.html It is past the drop deadline date, but I can’t finish the course. What can I do? • If, after the academic deadline to drop has passed, you encounter extenuating circumstances that prevent you from continuing with the course, you may appeal to the Associate Dean of Studies for permission to drop the course late. • Such an appeal must be made in writing and be accompanied by a $25 non-refundable cheque payable to Queen's University. The appeal should include your name, student number, mailing address, and email address. State the reasons you are requesting permission to withdraw from the course. Supporting documentation (e.g. a medical certificate in the case of illness) should also be provided. Direct your appeal to: Compendium - xv
  24. 24. Associate Dean of Studies Faculty of Arts & Science F200 Mackintosh-Corry Hall 68 University Avenue Queen's University Kingston, Ontario K7L 3N6 • Further information is available online at: http://www.queensu.ca/artsci/ • Click on “Appeals”. • In some cases, rather than appealing to drop the course, the student may request: C an incomplete (IN) grade C an exam deferral (ED) C aegrotat standing (AG) an estimated final grade based on course work • see Regulation 18 in the Arts & Science Calendar: http://www.queensu.ca/calendars/artsci/pg537.html or contact CDS at 613 533-2470 for further details. Grades When will I get my final grade? • Marks reports (final grades) are made available on QCARD by the Office of the University Registrar approximately three weeks after the end of the examination period. • If you have any questions concerning the receipt of your final grades, call the Registrar’s Office at 613 533-6000, Ext. 74080. How do I order an official transcript? • Students requiring an official transcript may order it online at: http://www.queensu.ca/registrar/transcript/inform.html • Alternatively, you may complete the Transcript Request Form found in the Forms section at the back of the course guide; mail it to the address on the form. • Or telephone 613 533-2219 for information on how to order an official transcript. I am a visiting student and need my grade in order to graduate. How can I get it? • If you are graduating from another university and require a final grade in order to complete the requirements for your degree, you may contact Continuing & Distance Studies/Faculty of Arts & Science at 613 533-2470 for assistance. • Please be prepared to provide the name and position of the person at your home university who is to receive your grade. We will make every effort to notify your home university by the required date. • As confirmation of your final grade, you must order an official transcript from the Transcript Clerk at the Office of the University Registrar (see above) to be sent to the appropriate individual at your home university. Compendium - xvi
  25. 25. I want to request a review of my assignment and exam grades. What is the procedure? Academic Regulation 13 in the Arts & Science Calendar TERM WORK a Students have the right to a review of any grade assigned in a course subject to the marking scheme set out by the course instructor(s). The student should request an informal review with the instructor concerned, and instructors are strongly encouraged to consent. This request should be made within 21 calendar days of the grade being received. Usually the instructor will provide a reconsidered grade within 21 calendar days of the receipt of the request and any further information being submitted by the student. If the request for an informal review is denied, the student may ask for the assistance of the Office of the Associate Dean (Studies) in order to facilitate an informal review. If a more formal appeal of term work is proposed, the student should refer to Academic Regulations 29 and 30, in Appeal of Academic Decisions <http://www.queensu.ca/calendars/artsci/pg32.html> Moreover, in any formal appeal of term work, the student must accept the responsibility for ensuring that the term work at issue is in fact the original term work submitted for evaluation. FINAL EXAMINATIONS AND FINAL GRADES Students have the right to a review of their final examination papers. For this purpose, final examination paper means the final examination question paper in a course and the graded answer paper written by the student which, by Senate policy, must be retained for a period of 12 months. i As a first step, the student should request an informal review with the instructor concerned, and instructors are strongly encouraged to consent. This request must be made within 21 calendar days of receipt of the final mark. The instructor will normally provide a reconsidered grade within a further 21 calendar days of receipt of the request and any further information being submitted by the student. However, access to the final examination paper may not be granted before the final marks are released. ii If the request for an informal review is denied or if the student is not satisfied with the instructor’s decision following a formal review of the examination or final grade, the student may appeal the decision, in writing, to the Associate Dean (Studies) (see Regulation 30, in Appeal of Academic Decisions <http://www.queensu.ca/calendars/artsci/pg32.html>) . The appeal must be submitted to the Arts and Science Faculty Office within 21 calendar days of receiving the instructor’s decision. The appeal must include copies of all relevant documents, and be accompanied by the Faculty appeal fee. (See chapter on Fees for Faculty appeal charge.) É Compendium - xvii
  26. 26. Blank
  27. 27. Correspondence Study Q&A Compendium E-MAIL AND WEB-CT ACCESS Introduction Every student at Queen's is entitled to an E-mail / Internet account. Students are required to obtain and use the University's e-mail system to communicate with the University and to receive information from the University. • GetID (http://www.its.queensu.ca/itsc/useIT/qcard_getid/getid.html) is the process students go through to establish their e-mail / internet account. • NetID (http://www.its.queensu.ca/netid/) is the common sign-on you will use for services and applications operated by ITServices on the Queen's network, including e-mail. IMPORTANT: If you do not have Internet access, please contact Continuing & Distance Studies as soon as possible after registration. NetID ITServices has a common sign-on model for services and applications on the Queen’s network. The common sign-on will use a Queen's Network Userid and Password (NetID). What is NetID? • You may know it as your Userid or log on. NetID will be the Userid you need to sign on to the applications and services that are operated by ITServices such as e-mail, WebCT, dial-in access and new web services. • Many people will recognize their NetID as the unique part of their Queen's e-mail address (the part in front of @queensu.ca for example). • When asked for your NetID, type the first part of your Queen's e-mail address. Example: Your e-mail address is: helpme@queensu.ca, then helpme is your NetID. WebCT (Web Course Tools) is the online course management system located at: www.its.queensu.ca/webct/ Requirements: • Internet access • Minimum Computer requirements Current Operating System (Windows or Mac) Mozilla Firefox Browser preferred or Safari (for Mac) High speed internet recommended for streaming media
  28. 28. • Browser settings Browser settings that are incompatible with WebCT tools frequently cause WebCT users to experience problems with hyperlinks (nothing happens when you click on them), Chat, or the Discussion Board (you can't read messages) as well as other WebCT features. Please check your browser settings to make sure they are compatible with the settings described below. StyleSheets Some browsers allow stylesheets to be disabled. Do not disable stylesheets. Cookies Browsers must be set to accept cookies. Javascript Both Java and Javascript should be enabled. (Javascript is called quot;Scriptingquot; by Microsoft.) Cache Cache should be set to quot;always reload a pagequot;. Pop-Up Blockers Browsers must be configured to allow pop-up windows for WebCT at Queen's. Browser Tune-up Either on the WebCT login page or http://www2.blackboard.com/tuneup Problems (E-mail or WebCT) Either submit your problem to ITS (http://www.its.queensu.ca/itsc/helpform.html) or phone 613-533-6666. If you have added a course on QCARD and it doesn’t show up on your “my webCT” page after 24 hours e-mail outlines@queensu.ca or phone 613-533-6000, ext. 74109
  29. 29. Economics 111*S Introduction to Microeconomics Introduction There are two main branches in Economics: Microeconomics and Macroeconomics. Economics courses are commonly divided into two sections to deal with quot;Microquot; and quot;Macroquot; separately. Microeconomics (the subject of this course) by its name suggests that it is primarily concerned with the smaller economic agents - the consumer, the producer, the buyer, the seller, inputs, outputs, individual markets or a small set of closely connected markets, etc. Macroeconomics, on the other hand, is primarily concerned with the larger economic agents - governments, taxes, national income, inflation, monetary and fiscal policy. Whether you take Micro or Macro as your first course in economics will not hinder your understanding of the material. However, it is generally accepted that if one has a strong understanding of the micro concepts, one will have a stronger appreciation and awareness of macroeconomics; because macroeconomics is in a sense, the quot;summationquot; of microeconomics. The textbook for this course is Microeconomics, 12th Canadian Edition, by Ragan and Lipsey. This textbook has proven itself for many years and in many countries to be one of the best first year economics texts. It contains all of the material presented in a modern form with superb diagrams to aid the learning process. The Study Guide that accompanies the text is recommended, but not required. A course such as this at the university would have three lecture hours per week usually with an assignment to follow. On average you should spend about 10 - 12 hours per week on the course. Any questions about the grading of assignments or the mid-term should be directed to the instructor. The instructor will grade the final exam and will be available to answer questions about the course material. If you have any difficulties, do not hesitate to call for help. Inquiries Regarding Course Content Instructor: Julia Zhu Office Location: Mackintosh-Corry A424 Office Hours: Thursday s 9:00 am - 12:00 pm Inquiries concerning the course content should be addressed to me, the instructor. If you have difficulties with any of the assigned work, you can send questions by email (hzhu@econ.queensu.ca) or you can phone me (613 533-6660). I also urge you to post questions about assignments and the content of the course on the course bulletin board and chat line and I will answer them there. There is a link to it from our course web page at: http://qed.econ.queensu.ca/walras/custom/100/firstyear/ i
  30. 30. Inquiries Regarding Administrative Concerns General inquiries about adding or dropping courses, obtaining transcripts, paying fees, receiving fee refunds, changing your address, etc. should be directed to the Division of Continuing & Distance Studies/Faculty of Arts & Science Office, F-200 Mackintosh-Corry Hall, 68 University Avenue, Queen's University, Kingston, ON K7L 2N6. Please send any inquiries separately from your assignments. The Continuing & Distance Studies Office is open 9:00 a.m. to 4:00 p.m., Monday to Friday. The phone number is (613) 533-2470, the office FAX number is (613) 533-6805, the e-mail address is: cds@queensu.ca ii
  31. 31. Readings All the required readings for the course are contained in the textbook or these course notes: Christopher T.S. Ragan, and Richard G. Lipsey, Macroeconomics, 12th Canadian Edition. Published by Pearson Addison-Wesley, 2008. Course Outline PART I INTRODUCTION Chapter 1 Economic Issues and Concepts Chapter 2 How Economists Work Chapter 33 The Gains from International Trade (pgs 802-813) PART II SUPPLY AND DEMAND APPLICATIONS Chapter 3 Demand, Supply, and Price Chapter 4 Elasticity Chapter 5 Markets in Action Optional Assignment #1, Due: February 2, 2009 PART III HOUSEHOLD DECISIONS Chapter 6 Consumer Behaviour Supp Chapter Other Household Decisions “Take home” Mid-Term Exam, Due: February 23, 2009 PART IV PRODUCER THEORY Chapter 7 Producers in the Short Run Chapter 8 Producers in the Long Run (Omit the Appendix) PART V OUTPUT MARKETS Chapter 9 Competitive Markets Chapter 10 Monopoly Chapter 11 Imperfect Competition and Strategic Behaviour Chapter 12 Economic Efficiency and Public Policy Optional Assignment #2, Due: March 18, 2009 PART VI THE GAINS FROM TRADE REVISITED Chapter 33 The Gains from International Trade (pgs 813-822) Chapter 34 Trade Policy PART VII INPUT MARKETS Chapter 13 How Factor Markets Work iii
  32. 32. Assignments, Examinations and Grading There are two optional assignments, the solutions for which will be posted to the website according to the schedule below. You are required to complete a take home mid-term and a final examination to receive credit for the course. The distribution of marks is as follows: Take Home Mid-Term 30% Final Examination 70% You must pass the final exam in order to pass the course. The midterm will be posted on the course web site <http://qed.econ.queensu.ca/walras/custom/100/firstyear/> the week of February 2. You are required to obtain a copy of the mid-term from this site. If you do not have access to the Internet, it is your responsibility to contact Continuing & Distance Studies promptly (telephone 613 533-6000, Ext. 77770) to request that a copy of the mid-term be mailed or faxed to you. The mid-term is due back by February 23, 2009 Please note: NO MID-TERMS WILL BE ACCEPTED AFTER THE DUE DATE. This is designed to give you feedback on your mid- term performance before the drop date of February 27. You may email or call the instructor for your mid-term grade if you do not pick up or receive your graded mid-term by mail with adequate time to make a decision. Note that you must pass the final examination to pass the course. The same grading scheme is used for extramural and intramural students, as follows: 80% and above Grade A 65% - 79% Grade B 50% - 64% Grade C Below 50% Grade F 50% is the passing grade. The formal, supervised final exam will consist of three parts: multiple choice, true/false/uncertain, and long answer questions. To get practice in doing multiple-choice questions, be sure to see the ones in the Study Guide or on past exams. You are permitted to bring a non-programmable calculator to the final exam. Final Examination Period: 9 - 25 April, 2009 Students requiring accommodations for exams in correspondence courses due to special needs must contact Candy Randall-Quesnel and Health, Counselling and Disability Services immediately following registration to be interviewed/assessed so that arrangements can be finalized well in advance of the exam period. iv
  33. 33. Please read “Examinations” in the Q & A Compendium (at the front of this course guide) for IMPORTANT administrative details about final exams. ALL students residing in Kingston and vicinity MUST write their exams on the Kingston campus. They are required to access the exams schedule at www.queensu.ca/registrar/exams/ to find out the date, time, and location of their exam. Kingston students will also be linked to this site through their Web-CT course site. A Queen’s NetID is required to access Web-CT. Students who are eligible to write exams off-campus will be notified of exam arrangements on their Web-CT course site. A Queen’s NetID is required to access Web-CT. Please consult this course guide for information on how to activate your Queen’s NetID and access Web CT or visit http://www.queensu.ca/currentStudents/onlineResources/http://www.its.queensu.ca/itsc/useIT/qc ard_getid/getid.htmlhttp://www.its.queensu.ca/students/ NB a) Students who do not have access to the Internet must notify the Examinations Coordinator immediately following registration. b) Distance students writing in “remote” areas where an established test site does not already exist (as determined by the Examinations Coordinator) will not need to access Web-CT for this purpose because they are directly involved in setting up the actual exam with the proctor. c) Incarcerated students will be notified of the date/time/location of their exam in writing approximately three weeks before the exam session begins. ALL students are expected to write exams when they are scheduled. Exams will be held on a weekday commencing at 9 a.m. or 2 p.m. (AM and PM start times may vary at off-campus exam centre locations.) Questions? Direct any questions about final exam scheduling or location to the Correspondence Examinations Coordinator, Candy Randall-Quesnel, by e-mail randallc@queensu.ca, fax 613 533-6805, or by telephone 613 533-6000, Ext 77188. Have you activated your NetID? You need a NetID to sign on to Queen’s e-mail and WebCT. Ensure you receive important information, including exam schedule and location, by activating your NetID and checking your email and WebCT course site regularly. Visit http://www.its.queensu.ca/students/ v
  34. 34. Assignment Schedule The assignments are optional and due on the following dates if you wish to have them graded (assignments received after the deadline will not be marked). Note that the mid-term is required. NOTE: Please ensure that you attach an Assignment Cover Sheet (found in your FORMS section at the back of these course notes) with each assignment you submit. To safeguard against loss, keep a copy of each piece of work you submit. Assignment #1 (optional) February 2 REQUIRED Midterm “take home” exam February 23 Assignment #2 (optional)* March 18 Final Examination Period April 9 - 25 *Since this assignment comes late in the term, you may not get it back before the exam. However, if you make the effort to get it in on time, we’ll make every effort to grade it and make it available to you before the exam. Assignment solutions will be posted to the website on the day after they are due. The mid- term exam will also be posted there and the answers to the mid-term will be posted a day or so after the due date. Visit the website by following the appropriate link from: <http://qed.econ.queensu.ca/walras/custom/100/firstyear/corresp/index111.html> Hard copies of the solutions will be returned to those who submit the mid-term exam and/or assignments. Correspondence students also have access to a Chat line. A link to the Chat line can be found on the course web page. At this site you will be able to pose questions to the instructor, or just “chat” with others in the course about the material. vi
  35. 35. Inquiries Regarding Course Content Instructor: Julia Zhu Office Location: Mackintosh-Corry A424 Office Hours: Thursdays 9:00 am - 12:00 pm Inquiries concerning the course content should be addressed to me, the instructor. If you have difficulties with any of the assigned work, you can send questions by email (hzhu@econ.queensu.ca) or you can phone me (613 533-6660). I also urge you to post questions about assignments and the content of the course on the course bulletin board and chat line and I will answer them there. There is a link to it from our course web page at: http://qed.econ.queensu.ca/walras/custom/100/firstyear/ Inquiries Regarding Administrative Concerns General inquiries about adding or dropping courses, obtaining transcripts, paying fees, receiving fee refunds, changing your address, etc. should be directed to the Division of Continuing & Distance Studies/Faculty of Arts & Science Office, F-200 Mackintosh-Corry Hall, 68 University Avenue, Queen's University, Kingston, ON K7L 2N6. Please send any inquiries separately from your assignments. The Continuing & Distance Studies Office is open 9:00 a.m. to 4:00 p.m., Monday to Friday. The phone number is (613) 533-2470, the office FAX number is (613) 533-6805, the e-mail address is: cds@post.queensu.ca vii
  36. 36. Method of Study This course has two sources of information. First, the textbook provides a complete discussion and presentation of all the material including examples and figures. Second, the Course Notes provide a re-explanation of the material so that you can get a more informal lesson. The Course Notes cannot stand on their own; they must be used in conjunction with the textbook. The beginning of the notes can be a bit verbose; they try to say the same thing in a variety of ways so you have a greater opportunity to relate. Later in the notes, however, a greater understanding of the material is assumed and the notes tend to be more direct and to the point; yet they still try to emphasize the important points, walk you through examples, cut through the less important information and provide a less formal presentation of the material. 1. Consult the course notes and go through these and the textbook simultaneously. In the notes you will find the objectives of the lesson and a breakdown of the chapters to be studied. 2. When you start to study make complete notes of your own. These will serve to be your study notes when you are doing assignments and preparing for the final exam. You will find that there are a number of concepts that neither the text nor the notes will help you on. Don't be discouraged if you have to read the same chapter numerous times - it is imperative you have a good grasp of the knowledge. If this happens re-read your study notes every day for a week until you are comfortable with the material; your study notes are tailored to you. They present things to you in the perfect manner so you can remember them. Use your study notes as much as possible for this reason. An integral part of studying economics is using graphs. Many relationships among variables are presented graphically in the course. Reviewing graphing techniques can only be beneficial. There is a review of graphing techniques in the Appendix to Chapter 2 in your text. 3. When you have completed what you have set out to do in the lesson go to the study guide and do some related problems. Also, on the website, there are some additional Practice Problems taken from previous years’ Assignments and exams. You should treat these as you would a written assignment, then turn to the solutions on the following page. If you are still having difficulty at this point call the instructor. Oh yes, I would like to pass on an interesting observation: The students who actually call the instructor (or tutor, if one is assigned) with questions are the same students that also tend to have the highest grades. Keep this in mind!!! 4. During the term there are two optional assignments. Although you will not be graded on them, please take the time to do them carefully. Try to do them first without using the textbook; this will also test your knowledge. Then, when you have completed as much as you can consult the text. The assignments are made up of two parts - True, False and Uncertain - and Long Answer or Problem questions. The assignments are designed to be challenging so don't get discouraged; they also reflect the final examination. Use your knowledge gained from the lessons and apply it to the problems. Economics is a quot;hands-onquot; course, so treat it as one. viii
  37. 37. Economics 111*S Optional Assignment #1 Please ensure that each assignment you submit is accompanied by an Assignment Cover Sheet found in the FORMS, FORMS & . . .quot; section at the back of these course notes. Keep a copy of each assignment you submit Due Date: February 2 Late assignments will not be marked. Note: This assignment covers material from Chapters 1, 2, 33 (first part) and 3-5 in the text. True, False, or Uncertain Explain why each of the following statements is True, False, or Uncertain according to the economic theory you have learned. A diagram and/or a few lines of explanation should be sufficient. Unsupported answers will receive no marks. It is the explanation that is important. A1-1. The cost of taking a correspondence course is the amount spent on tuition, books, mailing, and any travel to the exam site. A1-2. Moving from one point to another on a production possibility curve can decrease the opportunity cost of both goods. A1-3. International trade allows a country to consume at a point outside its production possibility curve. A1-4. Suppose tickets to a concert are sold on a first come first serve basis. After resale (scalping) outside the arena the night of the concert, the price of a ticket has risen and everyone who makes a transaction is better off. A1-5. Producing a quantity grater than equilibrium would increase consumer surplus, therefore, it must be efficient to do so. A1-6. Property taxes on commercial real estate fall only the owners of the property. [Hint: Be sure to consider both the short-run and the long-run.] A1-7. Consumers bear more of a tax levied on buyers the less elastic is the demand curve. [Hint: Assume that elasticity is neither completely elastic nor completely inelastic.] A1-8. An increase in Kingston bus ride prices results in increased revenue for the Kingston bus company. (continued on next page) ix
  38. 38. Problems A1-9. Using supply and demand diagrams, separately analyse the effects of each of the following on the market for rental housing in the student housing area around Queen’s University. (a) Attendance at Queen's increases by 25%. (b) The Ontario government doubles student aid. (c) The Kingston City Council removes the height restriction on buildings near Queen’s while the summer unemployment rate for students increases dramatically. (d) The Ontario government orders all rents in the area reduced by 20%. A1-10. Suppose the daily supply and demand curves for cigarettes in Kingston are given by: Q S = & 38 + 20P Q D = 24 & bP where Q S and Q D are the quantities in thousands of packages and P is the price per package. (a) Neatly graph the supply and demand curves being sure to identify the P and Q intercepts for the demand curve and the P intercept for the supply curve. Calculate the equilibrium price and quantity. (b) Calculate the price elasticities of both supply and demand at the equilibrium point. (c) Now suppose that the government decides to increase the tax per package and that the resulting supply curve is given by: Q S = -100 + 20P Graph this new function in your diagram. What is the increase in the tax per package? Calculate the new equilibrium price and quantity. Has the amount spent on cigarettes increased or decreased? Explain how you could have predicted this result from the information you found in part (b). (d) How much of the tax increase is passed on to consumers? How much is paid by producers? (continued on next page) x
  39. 39. A1-11. The tables below show possible combinations of Personal Computers (PCs) and Main Frame Computers (MFs) that can be produced with one unit of resources in Canada and in Mexico. Production Possibilities for Canada Production Possibilities for Mexico PCs MFs PCs MFs A 500 0 G 250 0 B 400 60 H 200 50 C 300 120 I 150 100 D 200 180 J 100 150 E 100 240 K 50 200 F 0 300 L 0 250 (a) Draw the (per unit of resources) production possibilities frontiers for Canada and Mexico (on separate graphs). What is the opportunity cost of MFs (i.e. the number of PCs per MF) in the two countries? Explain. (b) Suppose that, in absence of trade, Canada would have chosen to produce at point C and Mexico at point I. What are the total amounts of MFs and PCs produced by the two countries? What would be the relative price of MFs in the two countries? (c) Which country has an absolute advantage in production of MFs? In PC’s? Which country has a comparative advantage in MFs? In PC’s? Explain. (d) If specialization occurs and trade takes place between the two, which country will produce MFs and trade some of them for PCs? Can you give a range for the “trade”? price of an MF in terms of the number of PCs? (e) Explain why both countries are better off (or at least no worse off) under the pattern of trade you describe above. (end of assignment ) xi
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  41. 41. Economics 111*S Optional Assignment #2 Please ensure that each assignment you submit is accompanied by an Assignment Cover Sheet found in the FORMS, FORMS & . . .quot; section at the back of these course notes. Keep a copy of each assignment you submit Due Date: March 18 Late assignments will not be marked. Note: This assignment covers material from Chapters 7-12 of the text. True, False, or Uncertain Explain why each of the following statements is True, False, or Uncertain according to the economic theory you have learned. A diagram and/or a few lines of explanation should be sufficient. Unsupported answers will receive no marks. It is the explanation that is important. A2-1. If the marginal product of labour is declining over a certain range of labour input, then the marginal cost curve must be rising over the range of output produced by this labour. A2-2. Since economic profits are zero in the long-run for a perfectly competitive industry, there is no incentive to produce and we would expect output to decline to zero in the long-run. A2-3. Profit maximization requires that a perfectly competitive firm hire labour until the marginal product of labour equals the wage rate. A2-4. A monopolist always prices on the elastic portion of the demand curve. A2-5. In the short-run a monopolist can earn positive economic profits, but in the long-run a monopolist can only earn zero economic profit. A2-6. An increase in the wages paid to workers in an industry characterized by monopolistic competition results in a smaller selection of products produced by the industry. A2-7. Cartels fail to restrict output and earn monopoly-like profits because it is in each firm’s interest to cheat on any cartel agreement. A2-8. Monopoly output levels are inefficient. (continued on next page) xii
  42. 42. Problems A2-9. Suppose the marginal and average variable cost curves for each of the 100 firms in a perfectly competitive industry are given by: MC = 2 + q AVC = 2 + 0.5 q Furthermore, assume that fixed costs for each firm are equal to $50. (a) Graph the MC and AVC curves. Write out the equation for average total costs (ATC). At what level of output does ATC reach its minimum? Illustrate the ATC curve in your diagram. (b) Write out the equation of an individual firm's supply curve [Hint: a supply curve has the form quot;q equals some function of pquot;]. Calculate the short-run market supply curve. (c) Suppose demand is given by: Q D = 1300 – 50 p Calculate the market price and quantity. Given this price, what is the quantity supplied and profit level of each firm? (d) If the firms are already at the efficient size of plant what would happen over time to the market price and quantity, the output per firm, the level of profit per firm, and the number of firms in the industry? Calculate the long run equilibrium values of these variables. A2-10. Suppose the demand, marginal revenue, and marginal cost curves facing a monopoly are given by: Demand: P = 1400 - Q Marginal Revenue: MR = 1400 - 2Q Marginal Cost: MC = AC = 200 (a) Calculate the profit maximizing quantity, price and profit level for the monopoly. Illustrate in a diagram. (b) Calculate, illustrate and explain the deadweight loss from this monopoly. (c) Suppose this is rally a cartel composed of 2 firms, each of which produces one half of the monopoly output. Suppose each firm is deciding whether to produce this amount or the duopoly amount equal to 400. Derive a table showing each firm’s profit as a function of its output and the other firm’s output (see Figure 11-3 in the textbook). Explain the Nash equilibrium to this “game”. (d) Is society better off under collusion or the Nash equilibrium? (continued on next page) xiii
  43. 43. A2-11. For each of the short-run production functions (Total Product) curves depicted below, graph corresponding marginal and average product curves. q q (a) (b) TP TP L L q q (c) (d) TP TP 2 L 5 5 L (end of assignment ) xiv
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  45. 45. PART I INTRODUCTION What exactly is economics? The 2004 edition of the Oxford Canadian Dictionary provides the following definition for economics: economics: a the social science of the production and distribution of wealth in theory and practice. b the application of this discipline to a particular subject or sphere. 2 a the condition of a country etc. as regards material prosperity. b the financial consideration attaching to a particular activity, commodity, etc. More broadly, however, economics is the study of how people chose among available alternatives based on the resources they have at their disposal or, alternatively, the study of how people use their limited resources to satisfy their unlimited wants. “It keeps cropping up all over the place. There is an economics of money and trade, of production and consumption, of distribution and development. There is also an economics of welfare, manners, language, industry, music, and art. There is an economics of war and an economics of power. There is even an economics of love. Economics seems to apply to every nook and cranny of human experience. It is an aspect of all conscious action. Whenever alternatives exist, life takes on an economic aspect. It has always been so. But how can it be? It can be because economics is more than just the most developed of the sciences of control. It is a way of looking at things, an ordering principle, a complete part of everything. It is a system of thought, a life game, an element of pure knowledge.” <Robert A. Mundell, a Canadian economist (and Nobel Prize winner) Perhaps the best definition of economics is also the simplest. Economics is the study of how a society fulfills it material needs and wants. Chapter 1 begins with a discussion of how markets are crucial as devices for organizing complex economies. It then addresses the fundamental concepts of scarcity, choice, and opportunity cost, illustrating these ideas with consumption and production possibilities boundaries. The central themes of scarcity, choice, and opportunity cost are relevant to all economies, regardless of how they are organized, and can be applied to many aspects of human interaction. We then examine the flow of income and expenditure, the importance of marginal decisions, and the concepts of specialization, the division of labour, and globalization. Finally, we examine different types of economic systems, including traditional, command, and free-market systems. We emphasize that all actual economies are mixtures, containing elements of all three pure systems. Chapter 2 provides an introduction to the methodological issues of economics. Economic theories are subject to empirical testing and evolve as a result of what the empirical evidence shows. In this way, the social sciences are not all that different from the “hard” sciences, at least in their basic approaches. The chapter begins by making the distinction between positive and normative statements. We then work carefully through the various elements of economic models, including definitions, assumptions, 1
  46. 46. and predictions. Testing theories is as important as developing them, so we emphasize the interaction between theorizing and empirical observation. We then present various types of economic data, and this gets us into a detailed discussion of index numbers, time-series and cross-section data, and graphs. We weave international themes throughout the course, talking about trade and exchange rates when useful and mentioning the importance of globalization in the functioning of modern economies. While international trade is one of the most interesting and most important applications of applied microeconomic theory, a detailed and systematic treatment of international economics is beyond the scope of this course. Chapter 33 offers a first glimpse of these themes by explaining the gains that arise from trade and specialization, emphasizing the role of comparative advantage. However, this material can also be read as offering insight into the development and functioning of markets more generally and the key concept of the division of labour. It is for this reason that we cover this material so early in the course. 2
  47. 47. _______________________________________ Chapter 1: Economic Issues and Concepts _______________________________________ This chapter uses consumption and production possibilities boundaries to illustrate the concepts of scarcity, choice, and opportunity cost. We put off our discussion of the role and important of markets until after we discuss the basic economic problem of scarcity and its implications. Learning Objectives • Describe the importance of scarcity, choice, and opportunity cost, and how all three concepts are illustrated by consumption and production possibilities boundaries. • Illustrate the circular flow of income and expenditure. • View the market economy as a self-organizing entity in which order emerges from a large number of decentralized decisions and comprehend that all actual economies are mixed economies, having elements of free markets, tradition, and government intervention. Scarcity, Choice and Opportunity Cost The economic problem stems from 2 basic facts and the implications of these facts Basic Facts 1. Society has virtually limitless needs and wants in terms of goods and services. -distinction between needs and wants is not always clear, or all that important 2. Limited resources with which to satisfy these material needs and wants. -including natural resources (land, forests, mineral deposits, etc.), human resources (skills and labour force), and physical capital (tools, machinery), time, etc. ⇓ Scarcity -the members of a society cannot have everything they need or want ⇓ Choices -since a society cannot have everything it wants, choices are inevitable ⇓ Opportunity Cost -when a choice is made you have given up on some other alternative -the opportunity cost of the choice made is the next best alternative that is foregone 3
  48. 48. Opportunity cost is probably the most important concept in economics. There are many everyday examples. If you choose to watch the 2 hour premiere of “Prison Break” on TV you are giving up the next best alternative use of the time (watching the baseball game or studying perhaps). If you choose to rent a certain apartment you are giving up the next best alternative apartment. If you choose to travel during the summer you are giving up the next best alternative use of the time (perfecting your tennis forehand or working at a job). Many, if not most times we make decisions at the margin. We are deciding whether to purchase one more or one less of a good. This is illustrated in the beer and pizza decision in Fig 1-1. It shows the consumption possibility boundary (CPB) for a student. It illustrates: • Scarcity – combinations outside the CPB are unattainable • Choice – there are many available combinations, only one can be chosen • Opportunity Cost – if the student wishes more beer then he must give up 2 slices of pizza These ideas are valid for an economy as a whole as well. Production Possibilities Boundary (PPB) The PPB is a graph that shows the various combinations of output that the economy can possibly produce given the available factors of production and the available production technology. See Fig 1-2 for a diagram of a typical PPB for an economy that is assumed to produce only two goods. The PPB shows several economic concepts: • Scarcity—an economy cannot choose a production alternative outside the curve. • Efficiency—if the economy produces at a point on the curve, it is producing as much as it possibly can, its resources are used efficiently. If an economy is operating within the PPB, either resources are unemployed or resources are inefficiently allocated. • Opportunity costs—when the economy moves from one production alternative to another, it has to give up some units of one of the goods to gain more units of the other good. Opportunity cost increases as an economy concentrates more and more on one activity. This is shown by the slope of the PPB itself at the current production point. • Economic Growth—when an economy grows over time, the production possibilities curve shifts outwards, indicating that an economy can now produce more of one or both goods (see Fig 1-3). Fig 1-2 shows a typical PPB for an economy, one that is non-linear, concave to the origin. As mentioned above, this implies that the opportunity cost of producing a good rises as more of it is produced. This is because some resources are better suited at producing one of the goods than the other. If we produce very little of a good, it is the resources that are best suited that are used first. In order to produce more, we have to use less and less well suited resources leading to higher opportunity costs. 4
  49. 49. We can also use the PPB to think about Four Key Economic Problems that must be solved by any economic system: • What gets produced and how? • What is consumed and by whom? • Why are resources sometimes left idle? • Is productive capacity growing and how does this come about? The first two are within the realm of microeconomics which focuses on individual decision makers and individual markets. The second two are within the realm of macroeconomics which looks at the economy as a whole and is concerned with aggregates and broad averages. The Complexity of the Modern Economy The Canadian economy is a modern mixed but primarily market based economy. It is incredibly complex producing and consuming millions of different goods and services with an untold number of individual transactions taking place every day. How does it work? The answer is: through the institution of markets. Markets are an efficient way to organize economic activity. As we will see, market prices reflect relative scarcity and provide important signals to potential traders about the perceived value of resources. These prices provide useful information about how resources should be used in order to provide society with maximum satisfaction. A market economy is characterized by firms and households who interact in the marketplace, where prices and self-interest guide their decisions. Because real life involves literally billions of decisions daily, usually it is best to let the affected individuals evaluate the relative costs and benefits from these choices. In most instances, when individuals pursue their self-interest, they also promote what is best for society as a whole. People enter various professions in order to earn a living and to provide for their families. At the same time, the more things they provide that others value highly, the more successful they will become. In this case, the individual’s success reflects the value that others place on his or her services. Main Characteristics of Market Economies: Self-Interest: Each agent acts in his or her own best interest; an agent will not agree to something that makes her worse off. For example, an employee asking his employer for a raise is trying to maximize his income. The employer, however, will only grant the raise if it is in her best interest to do so. Incentives: Incentives influence agents' behaviour and choices; people respond in predictable ways to changes in the costs and benefits of their actions. Prices are a direct, monetary cost. But costs can also be of a psychological or subjective nature. Examples include having to wait, being embarrassed or restricted, or any other feelings that we do not enjoy. Common sense dictates that when the cost of doing something increases, it becomes less attractive and some people will begin to avoid that activity. Market Prices and Quantities: The quantity of a good produced and the price a good is sold at is determined by the market, rather than a central planner as in a command economy. Institutions: Institutions play an important role in market economies by facilitating transactions between various agents. The banking system has introduced money, cheques, credit cards, and debit 5

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