Econ 100A

Intermediate Microeconomics

Instructor: Dan Liu

TAs: Denis Sosinskiy
Roozbeh Faghihi Moghadam

2020 Winter

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Econ 100
 Outline

• Important Information about the Course

• Grades and schedule
• Homework and Pearson MyLab
• Review of the syllabus
• Intro and Calculus Review

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 Prerequisites
• To enroll in this class you need to have taken Econ 1A &
1B; and Mathematics 16A-16B or 21A-21B and earned a
grade of a C- or better in each course. No exceptions.
– Pre-requisite are enforced.

• Calculus will be used in this class without being

explained again. It is essential that you be comfortable
with mathematical functions and basic algebra to
complete this course satisfactorily.

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Econ 100
 Waitlist
• I do not manage waitlist and PTA. Go to
http://economics.ucdavis.edu/undergrad-
program/advising/frequently-asked-questions "waitlists"
if you have waitlist questions.

• Econ department policy is strict: we do not give PTAs. If

you have filed for graduation, they can contact
ecnadvisor@ucdavis.edu to ask for an exception and
details.

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Econ 100
 Teaching Assistants
• Roozbeh Faghihi Moghadam
-Section: M 6:10 - 7:00 PM, Physics 140
T 7:10 - 8:00 PM, Giedt 1006
-OH: Monday 4:00-6:00pm at SSH 116

• Denis Sosinskiy
-Section: T 8:10 - 9:00 PM, Wellman 25
T 5:10 - 6:00 PM, Wellman Hall 1
-OH: Thursday 10-11am 2-3pm at SSH 116

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Econ 100
 Code of Academic Conduct
• It is required that you read and know the Code of
Academic Conduct at UC Davis. Please read it carefully.

• This is available here http://sja.ucdavis.edu/files/cac.pdf .

• Any episode of misconduct, plagiarism, unauthorized

use of the course material, lying, intimidation and
disruption in class will be reported and sanctioned in the
most severe way, including an F in the course.

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Econ 100
 What is Misconduct?
• Copying or attempting to copy from another student, allowing another
student to copy, or collaborating with another student on an
• exam.
• • Displaying or using any unauthorized material such as notes, cheat-
sheets, or electronic devices
• • Looking at another student’s exam
• • Not following an instructor’s directions regarding an exam.
• • Talking, texting or communicating during an exam
• • Altering assignments or exams for re-grading purposes
• • Bringing pre-written answers to an exam
• • Having another person take an exam for you, or taking an exam for
another student
• • Theft of academic work
• • Unexcused exit and re-entry during an exam period

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 Textbook and MyLab
The required textbook for the course is
Microeconomics: Theory and Applications with Calculus, 5th
Edition by Jeffrey Perloff.

You are required to purchase the electronic version of the

textbook in conjunction with Pearson MyLab which will be
used for assignments.

The MyLab material will be linked to your Canvas page,

The cost of the whole package through Inclusive Access
(which is required) is $99.

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Econ 100
 Instructions to register for MyLaB
• When registering, make sure you do it on a computer and not on a
phone or tablet.

• Use Google Chrome and not Safari or Internet Explorer.

• Some may have registered for a MyLab in the past using a Course
ID. Make sure you register through Canvas. You don’t need a
Course ID. In fact, if you register using a Course ID, their grades
won’t sync to Canvas.
• If you have any trouble registering or using the MyLab, they should
go to our Technical Support before contacting me.

• https://canvas.ucdavis.edu/courses/251892 to access Canvas

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 How to register using the email

• Here is the tutorial

• https://www.youtube.com/watch?v=u_5jga
93ko0&list=PL9D77SRA6m1tGYPWEj14p
G_8AquWzaXm6&index=6&t=0s

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Econ 100
 Grading and Homeweork
• Grades for the course will be based on weekly homework (10%),
one midterm exam (30%), and a final exam (60%). In line with
Economics Department policy the average GPA for the class will be
In the vicinity of to 2.7 (B-).

• Homework will be provided via Pearson MyLab

(http://www.pearsonmylab.com) which is linked to your Canvas
Page.
– I will assign one practice-homework and one quiz-homework per week. Quiz will
be graded. Homework are due on Thursdays by 8 pm.
– Late homework will not be accepted or recorded. Homework are worth, in total,
10% of your grade. Their main role is to provide samples of what will be in the
midterm and final.

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Econ 100
 Exams
• Exams will account for 90% of your grade. The Final exam will be
cumulative and more challenging than the midterm. Only scientific
calculators are allowed during exams, I will provide them.

• Illness/Other Conflicts are in general not accommodated. I do not

give make-up exams. If you miss the midterm due to illness, the
weight of that midterm is transferred to your final. You will need a
doctor’s note. Intentionally missing a midterm is not in your interest.

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 Dates to remember
• Exam Dates:
• Midterm 1 (30%): February 11, in class
• Final (60%): March 17 at 8:30 pm

• If you cannot make these exam times for any reason,

you should not register for this course. No
alternative arrangements are possible for the exams.

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 My Lectures
• Each lecture will have a set of lecture notes and I make
the presentation available in advance

• However, I will often draw on the board

– Bring something to write on, perhaps the lecture
notes with a blank page on the other side or enough
margin space for diagrams
– If you write on a tablet, ok, otherwise I would not want
to see laptops-i-phones in front of you

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 Recommended ECON 100A Weekly
Routine:

Monday Tuesday Wednesday Thursday Friday

Look at the Come to Class, Keep working Come to class, Do

material for the start looking at on your go to TA OH if something
week, read and PS, if you have material and have doubts. Go that is not
begin to Study questions come to HW. If you to Section. Finish ECON 100A
OH. Go to have questions, HW and turn in
Section. TA office hours. by 8.00 pm

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Econ 100
 Basic Goals
• Understanding of the basic tools of microeconomics.
This are the Building blocks/Concepts for
• We will cover basic models of individual and firm
behavior, and analyze market outcomes under perfect
competition. Introduce imperfect competition.

• Theory and Applications, using examples, data and

current events.

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 What Economics is About
• Allocating Resources (private agents)
– Consumers choosing how (or if) to spend their money.
– Firms figuring out what products to make and how. How much to
invest and in what type of innovation/machines.

• Predicting behavior (with econ. Models), in particular in response to

changes and “shocks”.
– What firms will do, what stuff people buy, what prices will be

• Evaluating economic policy

– Who benefits and how much if we have unemployment
insurance?

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 Use of Models in Economics
• A model is a simplified representation of reality; by definition it
makes unrealistic assumptions

• E.g.: Demand and Supply

– Predicts: prices and quantities
– Welfare Analysis: Is equilibrium “efficient” (we will discuss this
term later)
– Predicts: How equilibrium will change in response to shocks
– Welfare Analysis: Who wins and loses from certain shocks?
• Sensible model, highly predictive, and the reason we teach it in 1A
• In this course you learn the details of what’s going on behind that
model

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 Criticism to Economists
• Economists often criticized for their use of models because
assumptions are either
– unrealistic
– portray humans as either selfish or “utility maximizing”

• Two responses to that

– You saw Physics models in high school that assumed no friction,
wind, etc.

– The models we see in this class all boil down to relatively

straight forward intuition. Models are not “reality”. They guide our
understanding.

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 Calculus Review

• Read the Calculus Appendix, added in

Canvas

• Functions: What are they?

• Types of Functions
– Linear and non-linear
– Convex and Concave functions
• Calculating Slopes and Derivatives
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 Functions=Relations
• Feed it number(s)
[parameters] and it
gives you back
number(s)
– Univariate (1 parameter);
f(x)
Multivariate (more than 1)
– WARNING! – need to be careful on
which one is the “dependent” and
which the “independent” variable

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 Slopes (marginal rates) & Derivatives

• Slopes: “Rise over Run”

• Derivatives – “local” slope
f (x2 ) - f (x1 ) f (x1 + h) - f (x1 )
=
x2 - x1 h
• If h = x2-x1

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 Linear and Nonlinear functions

• Linear function
– Constant slope between x and f(x)
– looks like a straight line when graphed
– Slope or derivative does not depend upon x
• Nonlinear function
– Slopes (derivatives) depend upon x
• Means they can change direction
– They look curvey (non-linear)

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 Calculating Derivatives
• Power Rule: if f(x) = axb

df (x)
= abx b-1
dx
• Example: f(x) = 3x3

df (x)
= 3* 3x(3-1) = 9x 2
dx

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 Calculating Derivatives

• Addition Rule: if f(x) = g(x) + h(x)

df (x) dg(x) dh(x)
= +
dx dx dx

• Example: f(x) = 2x + 3x3

df (x)
= 2 + 9x 2
dx

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Econ 100
 Calculating Derivatives
• Product Rule: if f(x) = g(x)*h(x)
df (x) dg(x) dh(x)
= h(x) + g(x)
dx dx dx
• Example: 2x*x-2
df (x)
= 2 * x-2 + 2x *-2x-3
dx
df (x)
= 2x-2 - 4x-2 = -2x-2
dx

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Econ 100
 Parital Derivatives
¶f (x, y)
¶x
– Treat y as constant and evaluate derivative of x.

– Numerical value of derivative will depend upon both x and y.

• Example: 4x3y2
¶f (x, y)
= 4 * 3* x 2 y 2 = 12x 2 y 2
¶x
¶f (x, y)
= 4 * 2 * x y = 8x y
3 3
¶y

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 More Calculus Fun Facts!

• Log Rule

• Exponential Rule

• Chain Rule: for f(x) = G(h(x))

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 Convex and Concave Functions

• Weakly Concave function

• Whole greater than sum of its parts

• Looks like the mouth of a cave
• 2nd Derivative is negative (local slope
decreases with x)

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 Concave Function

f(y)

f(x)

x θx + (1-θ)y y

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 Concave Function
Derivative (local slope)
is decreasing as x
gets bigger
f(y)
2nd Derivative < 0

f(x)

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 Convex Functions

𝜃𝑓 𝑥 + 1 − 𝜃 𝑓(𝑦) ≥ 𝑓(𝜃𝑥 + (1 − 𝜃)y)

• Whole greater than sum of its parts

• Looks like a U
• 2nd Derivative is positive (local slope
increases with x)

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 Maximums and Minimums
• Unconstrained functions (no bounds) will
have their maximums and minimums at
points where slope is flat
• Or derivative is zero
• Often called the First Order Condition
• Concave functions
– Maximum where
df (x)/ dx = 0
• Convex functions
– Minimum where
df (x)/ dx = 0
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