Economics 110 Sections 2 and 3:
Introduction to Economic Theory

Professor Christiaan Hogendorn

Spring 2019

Course Information

Office Hours and Contact Info

M W 2:50–4:00 and T Th 1:05–2:20.

If my door is open, I may be available, please knock. I also encourage appointments: talk to me before or after class or e-mail.

Reach me by e-mail at chogendorn and by phone at 860–685–2108.

Course Assistants and Clinics

Monday 7–9pm, Tuesday 7–10pm

Brian Oh, Sam Smith, Helen Wang, Grant Westphal, Philip Wong

Description and Prerequisites

An introduction to the principles of micro- and macroeconomic theory, this course is intended for prospective majors and students wishing to prepare themselves for a broad range of upper-level elective courses in economics. Mathematical tools essential for further study in economics are introduced throughout the course.

The prerequisite is one semester of college calculus also known as AP Calculus AB. This prerequisite can be fulfilled by receiving a score of 4 or 5 in AP Calculus AB, by completing MATH 120 or MATH 121 at Wesleyan, or by appropriate placement test scores. For Spring 2019 ONLY, MATH 120 or 121 can be taken concurrently with ECON 110

Learning Objectives

Understanding and using key economic models expressed in words, as graphs, and as mathematical functions.

Textbooks and Materials

Textbook: John B. Taylor and Akila Weerapana, “Principles of Economics,” Version 8.0, Boston, MA: FlatWorld, 2018. Abbreviated TW below.

Problem Sets and Other Readings: available as weblinks or pdf files from the Course Outline below.

Classroom Participation and Expectations

Please ask a lot of questions. Your questions are likely to generate benefits to others since more likely than not, your peers have the same questions that you do. The culture of economics is to ask questions during talks, not after, and you should begin that practice here. Distracting other students by using a phone or computer for things other than taking notes or by discouraging questions is not acceptable.

Problem Sets

There will be 10 problem sets. Problem sets are due on paper either in class or in the locked box in the economics alcove. They are due by the time I unlock the locked box on Wednesday morning. You may work with other students on problem sets, and you may turn in one set with multiple names on it.

The questions on the exams will be similar to the problem sets. You may also find the problems in the book are helpful review.


There will be two in-class midterms exams and a final exam as scheduled by the registrar. These exams will be done in blue books.


I use the Hogie scale for grading: 0, 1, 2 (the “hurdle” level), 3, 4 (minor problems), or 5. To find your letter grade equivalent, divide by the number of questions or categories to get your average score on the 0–5 scale. Then convert according to: 4.5=A, 4.0=A-, 3.7=B+, 3.3=B, 3.0=B-, 2.7=C+. 2.3=C, 2.0=C-, 1.7=D+, 1.3=D, 1.0=D-. As a general grading philosophy, C grades are for memorizing, B grades are for reproducing, and A grades are for generalizing.

Grades come mainly from the exams: the two midterms (30% of your grade each) and the final exam (40% of your grade). If your grade on the final exam is higher than the lower of your two midterm grades, then your lower midterm will be dropped and your final will count for 70% of your grade. Because of this, you may not reschedule the midterms. To make the grading fair to all, it is also important to avoid rescheduling the final exam, so this will be possible only in serious emergencies.

The grade for class participation is a plus or minus 1 point adjustment to the average of the your exam grades, re-averaged and weighted at 10%.

Problem sets will receive a ✓−, ✓, or ✓+. After dropping the lowest problem set, the grade on problem sets is a plus or minus 1 point adjustment to the average of the your exam grades, re-averaged and weighted at 10%. Late problem sets will be downgraded by one category, e.g. check plus down to check.

Course Calendar

Items marked with ! are not yet available.
○ Items with an open circle are just for background, not required.

I. Introduction

Jan. 24 Th Introduction and Inequality
Section 2 (T/Th) Only.
TW Chapter 14 Section 3
Jan. 28 M
Jan. 29 T
1. A Brief History of Economics
● TW Chapter 1, Sections 1, 3, 4
● TW Chapter 2 including appendix
● TW Chapter 5, Sections 1, 3

II. Supply and Demand

Jan. 30 W
Jan. 31 Th
2. Markets for Goods and Services
● TW Chapter 3
BP Statistical Review of World Energy
Feb. 4 M
Feb. 5 T
3. Elasticity
● TW Chapter 4 Sections 2–5
Problem Set 1 due. Answers.
Feb. 6 W
Feb. 7 T
4. Efficiency, Intervention, Taxes
● TW Chapter 5 Section 5
● TW Chapter 4 Section 1
● TW Chapter 7
“Sin” taxes—eg, on tobacco—are less efficient than they look. The Economist (2018, August 09).
Feb. 11 M
Feb. 12 T
5. International Trade
● TW Chapter 29 Sections 1,6–9, Skim 2–5
Christine McDaniel and Danielle Parks (2019), “Growing Backlog, Inconsistent Rulings Cast Doubt over Tariff Exclusion Request Process.” Mercatus Center, 11 Feb. 2019.
Problem Set 2 due. Answers.
Feb. 13 W
Feb. 14 Th
6. Externalities and the Environment
● TW Chapter 15

III. Firms and Labor

Feb. 18 M
Feb. 19 T
7. Costs and Profit Maximization
● TW Chapter 6
● TW Chapter 8 Sections 1–2
Problem Set 3 due. Answers.
Feb. 20 W
Feb. 21 Th
8. Perfect Competition
● TW Chapter 8 Sections 3–6
● TW Chapter 9
Feb. 25 M
Feb. 26 T
Covers classes 1–6, Problem Sets 1–3.
Exam Section 2. Answers Section 2.
Exam Section 3. Answers Section 3.
Feb. 27 W
Feb. 28 Th
9. The Imperfectly Competitive Firm
● TW Chapter 10
● Skim TW Chapter 11
March 4 M
March 5 T
10. The Labor Market
● TW Chapter 13 Sections 1–5
Problem Set 4 due. Answers.
March 6 W
March 25 M
11. Interventions in Labor Markets
● TW Chapter 13 Section 6
● TW Chapter 14 Sections 1–2
Tax Rates

IV. Capital

March 26 T
March 27 W
12. Discounting and Returns on Capital
● TW Chapter 16 Sections 1, 4, 8
● TW Chapter 17 Section 5
Washington Square movie clip (in class).
Problem Set 5 due. Answers.
March 28 Th
April 1 M
13. Supply and Demand of Capital
● TW Chapter 16 Section 2
Capital supply from Stiglitz and Walsh, Economics.
April 2 T
April 3 W
14. Money, Inflation, Price Indices
● TW Chapter 22 Section 1
● TW Chapter 18 Section 3.3
Box Office Mojo movie data
BLS Consumer Price Index Data
CPI Data back to 1800 (Minneapolis Fed)
Problem Set 6 due. Answers.
April 4 Th
April 8 M
15. Stocks, Bonds, and Banks
● TW Chapter 16 Sections 3, 5, 6, 7
Old Bond
Bond Market Data
Interview with Gary Gorton, Yale University finance economist on the growth and collapse of shadow banking, The Region,
December 2010.
Bank Run Clip from It’s a Wonderful Life

V. Neoclassical Macroeconomics

April 9 T
April 10 W
16. Introduction to Macroeconomic Models
● TW Chapter 18 Sections 1, 4
● TW Chapter 21 Section 1
IMF Data
Dianne Coyle (2017) “Rethinking GDP,” Finance & Development, March.
Armenter, R. (2015). A bit of a miracle no more: the decline of the labor share. Business Review, (Q3), 1–9.
Problem Set 7 due. Answers.
April 11 Th
April 15 M
17. Savings, Investment, Government
● TW Chapter 18 Section 2
● TW Chapter 19 Section 4 (assume X=0)
April 16 T
April 17 W
Covers classes 7–15, Problem Sets 4–7.
Exam Section 2. Answers Section 2.
Exam Section 3. Answers Section 3.
April 18 Th
April 22 M
18. Open Economy and Growth
● TW Chapter 19 Section 4 (now X is nonzero)
● TW Chapter 21 Sections 2–5
Crafts, N. (2017). “Whither Economic Growth.” Finance & Development, 54(1), 3–6.
BLS Productivity Data
○ International Monetary Fund, World Economic Outlook.
April 23 T
April 24 W
19. Central Banks
● TW Chapter 22 Sections 2–4
Data from FRED St. Louis Fed
Problem Set 8 due. Answers.

V. Macroeconomic Fluctuations

April 25 Th
April 29 M
20. Business Cycles and Unemployment
● TW Chapter 17
● TW Chapter 20
NBER Business Cycles
BLS Unemployment Data
Maddison Historical Statistics data on GDP from the past.
April 30 T
May 1 W
21. Aggregate Demand and Aggregate Supply
● TW Chapter 24 (ignore Figure 24.2 and upper-right panel of Figure 24.5)
Problem Set 9 due. Answers.
May 2 Th
May 6 M
22. Fiscal and Monetary Policy
● TW Chapter 26
● TW Chapter 27
Federal Reserve Money Supply Data
Niel Willardson, “Actions to Restore Financial Stability,” The Region, Federal Reserve Bank of Minneapolis, December 2008.
May 7 T
May 8 W
23. Conclusion
Problem Set 10 due. Answers.
Office Hours for Finals
Friday May 10, 12:30–3:00
Monday May 13, 12:30–3:00
Tuesday May 14, 12:30–4:00
Wednesday May 15, 12:30–2:00
Thursday May 16, 2:45–4:30
Friday May 17, 12:30–2:00
Section 2 Friday May 17: 2:00–5:00
Section 3 Wednesday May 15: 2:00–5:00

Course Statements

Accommodation Statement
Wesleyan University is committed to ensuring that all qualified students with disabilities are afforded an equal opportunity to participate in, and benefit from, its programs and services. To receive accommodations, a student must have a disability as defined by the ADA. Since accommodations may require early planning and generally are not provided retroactively, please contact Accessibility Services as soon as possible.

If you have a disability, or think that you might have a disability, please contact Accessibility Services in order to arrange an appointment to discuss your needs and the process for requesting accommodations. Accessibility Services is located in North College, rooms 021/022, or can be reached by email ( or phone (860–685–5581).

Religious Observances
Religious observances require that faculty make every effort to deal reasonably and fairly with all students who, because of religious obligations, have conflicts with scheduled exams, assignments or required assignments/attendance. If this applies to you, please speak with me directly as soon as possible at the beginning of the term.

Discrimination and Harassment
Wesleyan University is committed to maintaining a positive learning, working, and living environment. Wesleyan will not tolerate acts of discrimination or harassment based upon Protected Classes or related retaliation against or by any employee or student. For purposes of this Wesleyan policy, “Protected Classes” refers to race, color, national origin, sex, pregnancy, age, disability, creed, religion, sexual orientation, gender identity, gender expression, veteran status, political affiliation or political philosophy. Individuals who believe they have been discriminated against should contact the Office for Equity and Inclusion at 860–685–4771. The responsibility of the University Members has more information.

Honor Code
All students of Wesleyan University are responsible for knowing and adhering to the Honor Code of this institution. Violations of this policy may include: cheating, plagiarism, aid of academic dishonesty, fabrication, lying, bribery, and threatening behavior. All incidents of academic misconduct shall be reported to the Honor Code Council – Office of Student Affairs. Students who are found to be in violation of the academic integrity policy will be subject to both academic sanctions from the faculty member and non-academic sanctions (including but not limited to university probation, suspension, or expulsion). The Honor Code Office has more information.

Time Commitment
While the exact time commitment for the class will vary individually and over the course of the semester, I recommend that you budget approximately three out-of-class hours for every class hour to complete the reading, assignments, homework, and project. I have designed the class so that it should be feasible to satisfactorily complete the requirements with approximately twelve hours per week of time commitment. If you are spending more time than this on a regular basis I would encourage you to check in with me.