Economics is an introductory microeconomics course with an additional session on quantitative applications. The course assumes no prior background in either calculus or trigonometry. We cover various topics, but the unifying theme is to understand rational decision making. The tools you will learn are useful for gaining some understanding of consumer and firm behaviors under different market structures.
The quantitative reasoning aspect of the course takes three forms:
Equations and Formulas
We use equations to describe relationships between various economic variables. For example, we may write:
P = 10 − QD
where P is the price of a good and QD is its quantity demanded. This says that the higher the price of a good is, the less people are willing to buy it and, hence, the fewer goods are likely to be sold.
All the mathematics we use is at the level of SAT-1, i.e. high school algebra and geometry. For the most part, you only need to know how to solve a linear equation of one variable (y = a+bx) and calculate the areas of triangles, rectangles and trapezoids.
Graphs
Students find it easier to understand pictures than words or mathematical symbols. Therefore, we will often translate equations to graphs. For example, you may be asked to do the following.
Question: Draw the previous equation, P = 10 − QD (with QD on the horizontal axis and Pon the vertical axis). Then, calculate the area under this curve.
Answer: This is a straight line with slope -1. The area under the line equals the area of a right triangle with base = height = 10. Hence, the area is equal to 1/2(base)(height) = 50.
Modeling
Our analysis of each topic typically involves the following steps. First, in order to impose some structure on the everyday complex phenomena, we define the key variables in the issue at hand with some simplifying assumptions. Then, we describe the relationship between the key variables using mathematical equations or graphs. Finally, we follow a deductive approach to work out the implications of our previous assumptions.