1. Econ 100 Principles of Economics Murat Usman
Lecture 1
September 15

2. Lecture plan
Syllabus
Book. Lecture Notes. Study tips. Exams. Grading. Make ups.
People on the waiting list
My course (and book) recommendations
After Econ100: Econ201 and Econ202
A short Introduction: what is economics?
A short case study: What would you do, if you were …

3. Hala beklemedeyim, ne yapacağım?

4. Try to get into other sections (if there is room)
No capacity increase for Econ 100
We have 6 sections with 85 students each
This is a huge course.

5. The book
Economics, 2e. Gregory Mankiw & Mark Taylor 928 pages, 28x22.3cm Shipping Weight: 4.1 pounds Book website: _taylor2/students/stu_title.htm

6. The author
Gregory Mankiw (rhymes with thank you)

7. A common question
Do I have to buy the book?

8. No.

9. Another common question: I am registered in the 9 30 8 30 section
Another common question: I am registered in the section. Can I come to the section? Answer: No.

10. Now the most important part …

11. Grading Two midterm exams, one final exam.
Midterm #1: Week 6 (+2/-1 week)
Midterm #2: Week 11 (+2/-1 week)
Final Exam: scheduled by the Registrar’s Office. (Jan 2-11).

12. THERE WILL BE A FINAL EXAM THIS YEAR!

13. Grading: MAKE UP exams If you are going to miss an exam you must
(1) send me an before the exam explaining why you cannot attend the exam, and
(2) make an appointment to see me and explain why you could not attend the exam within three work days of the exam.
A make-up exam will be given only in case of properly documented cases, such as a medical report from the KU health center.
If you do not follow these instructions, you will receive a 0 for the exam that you missed.

14. How is your letter grade computed?
25% Midterm Exam #1. 25% Midterm Exam #2. 40% Final Exam. 10% “Wild Card”. Your best exam gets an added weight of 10%. For example, if you do very well on the final exam it will count as 50%. 10% Bonus. For class participation and doing in-class assignments.

15. In class exercise #1: How is my letter grade computed?
25% Midterm Exam # % Midterm Exam # % Final Exam. 75 Bonus: 6 points. 81 or above: B+. Will this person receive a B+? Please show your work.

16. In class exercise #1: How is my letter grade computed?
25% Midterm Exam # % Midterm Exam # % Final Exam. 75 ( )x x x75 = Bonus for class participation:. 6 bonus points Total points (out of 100) Letter grade: B+

17. In class exercise #2: My letter grade without wildcard and bonus
25% Midterm Exam # % Midterm Exam # % Final Exam x x x75 = Letter grade: B-

18. Class participation and assignments
10-point BONUS In class experiments and activities Short reading/writing assignments Please bring a pen/pencil and a piece of paper to each class.

19. 10 points bonus for class participation (not easy!)
DON’T
Be late for class;
Chat with neighbors during class,
Do work for other classes.

20. 10 points bonus for class participation (not easy!)DO
be attentive,
pay attention to the lecture.
ask questions.
make an attempt to come up with a response to my questions
And turn off laptops, tablets, phones.

21. It is not true that “everybody gets an A in Econ 100”
It is not true that “everybody gets an A in Econ 100”. This is an actual quote from a student (who received a D+) To pass you need 50. For an “A” you need 90. For A+ you need 95 (without bonus or wildcard) + decent class participation score

22. Last year (Spring 2014) With a few exceptions, nobody failed
Last year (Spring 2014) With a few exceptions, nobody failed. About 40% received As. (A+, A, and A-) The median letter grade was B.

23. Enough about grades

24. Web page Econ 100: https://ais.ku.edu.tr/course/25089/Default.html
syllabus
lecture notes (posted after class)
study question (weekly)
past exams + answers (1 week before the exams)
information: exam date topics, classroom
information about office hours, the TA’s office hours
readings

25. Lecture Notes.
Fairly detailed, regularly updated. But no substitute for lectures
Study tips.
Solve the past exams (to be posted 1 week before exams)
Do the study questions: very important,
then go over lecture notes,
then read the book.
come to my office hours if you need help. (send me an a day before to set up an appointment)

26. Exams (very similar to past exams)
Multiple choice questions + a few short answer questions- simple math calculations. No essays.
Exams are not difficult!

27. After Econ100 Econ201 Microeconomics
Studies the behavior of individual units (consumers and firms); the demand and supply of individual goods and services.
More abstract/mathematical than Econ202
But it is a must if you want to learn economics
Highly recommended for BA majors!

28. After Econ100 Econ202 Macroeconomics
Studies aggregated indicators such as GDP, unemployment, and inflation, tries to understand how the whole economy functions.
Always in the news, and on TV: economic growth, exports, imports, central bank. Interest rate, current account deficit, inflation, exchange rates, etc.

29. Recommended
ECON.333/MGEC.333    
GAME THEORY AND STRATEGY

30. Also recommended

31. Economics: The User's Guide: A Pelican Introduction Pelican Books 2014

32. Econ 100: Goals and objectives
Econ100 is one of the very few courses that everyone must take (almost no alternative)
So, I want people to…
Be happy
Learn some economics
Get good grades

33. A 5 minute lecture on “What is economics?”
Now…
A 5 minute lecture on
“What is economics?”

34. Economics is about the allocation of scarce resources.

35. Example: Scarcity at the open buffet brunch.

36. Your best friend invites you to a open buffet brunch.
Money is no object; you can eat as much as you want for free.
Time is no problem either; it is Saturday, you have all afternoon and would enjoy spending it in the company of your friend.
What is the scarce resource here?

37. If there is scarcity then you have to make choices.
The trade-off principle:
When there is scarcity, then having more of one good thing means having less of another.
Dictionary definition of trade off is “a situation in which you must choose between or balance two things that are opposite or cannot be had at the same time”

38. Example for a trade-off:
“Güzellik mi iyi huy mu?”

39. Now something really confusing…
Economics starts with the assumption that people have well- defined objectives/goals and tend to choose the correct way to achieve them. More specifically, economics assumes that people are rational! Which means people follow this simple rule: Do activity x if and only if B(x) > C(x), B(x) is the benefit of activity x (to the individual) C(x) is the cost of activity (to the individual)

40. A short case study
Now it is your turn

41. You are the general manager of IL JK company
You are the general manager of IL JK company. The company provides extermination services (böcek ilaçlama). There are some administrative personnel who cannot be fired. There are also 196 workers who do the actual extermination work and can be fired.

42. More information…
The company started 5 years ago. It is owned by three families. The work requires only a low level of skills so that each worker requires only one week of training. Almost all workers have been with the company for 3 to 5 years. The company pays its workers more than the minimum wage. The workers’ wages, including overtime, are between TL 1,500 and 1,900 per month. The minimum wage in 2013 was about 970 TL. The company gives its workers all the benefits required by law.

43. Current situation Until recently, the company was very profitable.
As a result of the continuing recession, however, there has been a big decrease in profits though the company is making profits.

44. The big decision
You will soon have a meeting with the owners and your management team must decide how many workers to lay off. IL JK’s Finance Department has prepared the following forecast of annual profits:

45. Data Number of workers who will continue to be employed
Expected annual profit
in TL, millions
0 (all the workers will be laid off)
Loss of 8
50 (146 workers will be laid off)
Profit of 1
65 (131 workers will be laid off)
Profit of 1.5
100 (96 workers will be laid off)
Profit of 2
144 (52 workers will be laid off)
Profit of 1.6
170 (26 workers will be laid off)
196 (no layoffs)
Profit of 0.4

46. Your recommendation?
I recommend continuing to employ ______ of the 196 workers in the company.
Why? Provide a brief justification for your decision:
_______________________________________
I will distribute printed copies of this form.

47. Please…
Write your name exactly as it appears on KU records. Make sure that I can read your handwriting. I am interested in the WHY part of your answer.

48. Your recommendation: I recommend continuing to employ ______ of the 196 workers in the company. Why? A brief justification for you decision: ________________ ___________________________________________________

49. End of the lecture