Economics 300: Methods and Tools of Economic Analysis [Syllabus, Elms]

Professor Peter Cramton

Tuesdays and Thursdays, 11-11:50 am, Marie Mount Hall 1400, Spring 2013

The methodology of economics employs mathematical and logical tools to model and analyze markets, national economies, and other situations where people make choices. Understanding of many economic issues can be enhanced by careful application of the methodology, and this in turn requires an understanding of the various mathematical and logical techniques. This course reviews concepts and techniques usually covered in algebra, analytical geometry, and the first semester of calculus. It also introduces the components of subsequent calculus and linear algebra courses most relevant to economic analysis. The course emphasizes the reasons economists use mathematical concepts and techniques to model behavior and outcomes.

The course will meet three times a week, twice for lectures and once in discussion section conducted by a teaching assistant. Lectures will demonstrate the power of math to answer economic questions, stressing the reasons economists use math and explaining mathematical logic and techniques. Discussion sections will demonstrate solutions for problems, answer questions about material presented in the lectures or book, and focus on preparing students for exams.

Students should be prepared to devote at least 4 hours per week outside class meetings, primarily working on problem sets as well as reviewing materials and practicing. Students with weak math skills will need to spend additional time mastering techniques.

Course objectives

Each student should be able by the end of the semester to

Recognize and use the mathematical terminology and notation typically employed by economists
Explain how specific mathematical functions can be used to provide formal methods of describing the linkages between key economic variables
Employ the mathematical techniques covered in the course to solve economic problems and predict economic behavior
Explain how mathematical concepts enable economists to analyze complicated problems and generate testable hypotheses

Teaching Assistants

Bryan Hardy, 301 405 3266, Tydings 3105, Office hours MW 12-1 pm
section 2 Fri 9am Key 0116; section 4 Fri 10am Lef 1201; section 6 Fri 12pm Tydings 2108

Jongho Park, 301 405 3266, Morrill 1106A, Office hours Thu 3:30-4:30 pm, Fri 12:30-1:30 pm
section 1 Fri 9am Key 0126; section 3 Fri 10am Key 1117; section 5 Fri 11am Key 1117

Problems Sets

There are six problem sets. Answers will be posted after the due date at the following links: PS1, PS2, PS3, PS4, PS5, PS6. If it is after the due date and you still see “Suggested Answers are not yet available.” then press F5 to refresh the page.

Here are some relevant Mathematica Demonstrations of topics in this course.

Class Schedule and Materials [Updates in Red]

Note well: the schedule may change as a result of snow events and other factors. Please watch your email for notification of such changes, which will then be reflected below once you press F5 to refresh the page.

Date Topic [No class on these days.]

Jan 24 No class today; video instead: Wolfram TED talk *** See the video and read the syllabus ***

Jan 29 01 – Mathematical Framework of Economic Analysis, Khan Academy, Math Review, The Math Page

Jan 31 02 – An Introduction to Functions, [nb], Limits

Feb 5 02 – An Introduction to Functions (continued)

Feb 7 03 – Exponential Functions, [nb], The Mating Game

Feb 8 Problem set 1 due

Feb 12 03 – Logarithmic Functions, Visual Guide to Simple, Compound, and Continuous Interest Rates

Feb 14 04 – Section 1 only – Systems of Equations and Comparative Statics, [nb]

Feb 15 Problem set 2 due

Feb 19 05 – Basics of Differential Calculus, [nb]

Feb 21 05 – Basics of Differential Calculus (continued)