ECON 110 Introduction to Economic Theory

Fall 2019

Course Information

Contact Information

Professor: Jennifer Raynor
Office: PAC 204
Office hours: TR 3:00PM-4:00PM, or by appointment in PAC 204
Sign up sheet

Course Assistants: James Bayer, Nicholas Keating, Andrew Kushnir
Q&A session: Mondays 5:00PM-7:00PM in PAC 002
Review (mini-lecture on what we covered the previous week) and Q&A session: Wednesdays 6:00PM-8:00PM in PAC 002 (on 10/30 only we will be in PAC 136 due to a scheduling conflict)

Course Description

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. Pre-req overrides will be approved by the Professor teaching Section 01 of ECON 110.

Learning Objectives

By the end of this course, you will understand how to examine sophisticated economic questions, using words, graphs, and mathematics.

Course Materials

John B. Taylor and Akila Weerapana, “Principles of Economics,” Version 8.0, Boston, MA: FlatWorld, 2018.
Abbreviated as TW in the course schedule below

Additional readings are in the course calendar below.

Some students have also inquired whether I can recommend any textbooks that use calculus. One option is:
Hal. R. Varian, “Intermediate Microeconomics with Calculus.”

Classroom Expectations

Please ask a lot of questions, both in class and during office hours. More likely than not, your peers have the same questions that you do. Also, this class is for you! I want to ensure you understand the material. Discouraging or interrupting other students’ questions is not acceptable.

You should plan to take notes by hand, on paper or a tablet. I do not recommend the use of computers for note taking because it can be a distraction to you and other students. In addition, this course uses a lot of math and graphs, which are cumbersome to type.

Course Requirements

Your grade will be based on problem sets, in-class midterm exams, and a final exam, as well as class participation.

  • Exams: The questions on the exams will be similar to the problem sets. You may also find it is helpful to review the problems in the book.
  • Problem sets: Problem sets are due every week on Thursday with the exception of exam weeks and Thanksgiving week (in which there is no homework due). To be considered “on time”, your work must be turned in to me at the start of class or submitted in the locked box in PAC at least 30 minutes before class. I will accept late problem sets in the lockbox through 8:00 a.m. on the Tuesday after it was due, but your grade will be penalized according to the Grading section below. I encourage you to work with other students, and you may turn in one problem set with multiple names on it.
  • Participation: I highly value your participation in class. Please also feel free to comment on the pace, level, and content of the course.


I use a 5-point grading scale and will convert your average score to a letter grade according to the following criteria:

Generalizing Reproducing Memorizing Beginning No understanding
4.5=A 3.7=B+ 2.7=C+ 1.7=D+ <1.0=F
4.0=A- 3.3=B 2.3=C 1.3=D  
  3.0=B- 2.0=C- 1.0=D-  

Grades are mainly based on the exams: two midterms (30% each) and the final exam (40%). If your final exam score is higher than either midterm, I will drop the lowest midterm grade and count the final exam as 70% of your grade. Because of this, you may not reschedule the midterms. You may reschedule the final exam only in serious emergencies.

I will grade problem sets with a ✓−, ✓, or ✓+, downgrade late problem sets by one level (e.g. ✓+ to ✓), and drop 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%.

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

Course Calendar

Symbols in the calendar below indicate the following:
! Not yet available
● Required reading
○ Background reading, not required

Readings pertain to material that will be presented in lecture on the day the reading is assigned. The readings will provide detailed explanations on principles and theory, and lecture will extend this material to more complex mathematical modeling. Ideally, you should do the reading before coming to lecture (with the exception of the first two lectures, for which you had little advanced warning).

Section 1: Individual Choice

TSep. 30. Introduction to Economics, Syllabus
● TW Chapter 1, Section 1
RSep. 51. Calculus Tools
1.1 Principles of optimization
● TW Chapter 2, excluding appendix
TSep. 102. Consumer Choice
2.1 Deriving demand
● TW Chapter 3, Section 1.1
● Chapter 5, Section 1-3
RSep. 122.2 Changes in Qd, elasticity
● TW Chapter 3, Section 1.2-1.3
● TW Chapter 4, Section 2-3
PS 1 due (covers Sep. 3 – Sep. 5). Answers.
TSep. 172.3 Shifts in demand, market demand
● TW Chapter 5, Section 4
Elasticity Summary
RSep. 193. Producer Choice
3.1 Deriving supply
● TW Chapter 3, Section 2
● TW Chapter 6, Section 1-3
● TW Chapter 4, Section 4
PS 2 due (covers Sep. 10 – Sep. 12). Answers.
TSep. 243.2 Cost curves
● TW Chapter 8
RSep. 263.3 Changes in Qs, elasticity, shifts in supply, market supply
● TW Chapter 6, Section 4
Price Elasticity and Linear Supply Curves The American Economic Review (1967, Sep.)
PS 3 due (covers Sep. 17 – Sep. 19). Answers.

Section 2: Market Interactions

TOct. 14. Markets and Efficiency
4.1 Market D, S, equilibrium
○ TW Chapter 5, Section 4 (review: covered in Part I)
○ TW Chapter 6, Section 4 (review: covered in Part I)
● TW Chapter 3, Section 3
● TW Chapter 7, Section 1
ROct. 34.2 Consumer and producer surplus
● TW Chapter 5, Section 5
● TW Chapter 6, Section 5
● TW Chapter 7, Section 2-3
PS 4 due (covers Sep. 24 – Sep. 26). Answers
TOct. 8MIDTERM #1: Individual Choice
(covers Section 1: Individual Choice lectures and PS 1-4)
Practice Exam. Answers.
Section 2 Exam. Answers.
Section 3 Exam. Answers.
ROct. 105. Government interference
5.1 Price controls, quotas
● TW Chapter 4, Section 1
● TW Chapter 7, Section 4
TOct. 155.2 Taxes, subsidies
● TW Chapter 7, Section 5
● TW Chapter 14, Sections 1-2
“The taxes of sin”. The Economist (2018, August 09).
ROct. 176. Market failures
6.1 Externalities
● TW Chapter 15
PS 5 due (covers Oct. 1 – Oct. 10). Answers.
TOct. 22(Fall break – no class)
ROct. 246.1 Public goods
TOct. 29 7. Imperfect competition
7.1 Monopoly
● TW Chapter 10
● Skim TW Chapter 11, Section 1-2
○ Lecture slides (Section 2, Section 3)
Lecture Notes
ROct. 317.2 Oligopoly
● TW Chapter 11, Section 3
● TW Chapter 12
Lecture slides
Lecture Notes
PS 6 due (covers Oct. 15 – 24). Answers.

Section 3: Economy-wide Interactions

TNov. 58. Neoclassical Macroeconomics
8.1 Overview, tracking the macroeconomy (GDP)
● TW Chapter 17 (not Appendix)
● TW Chapter 18
Lecture Notes
RNov. 78.2 The spending allocation model, real interest rates
● TW Chapter 16
● TW Chapter 19
Lecture Notes
PS 7 due (covers Oct. 29 – Oct. 31). Answers.
TNov. 128.3 Investment, government, capital flows
Lecture Notes
RNov. 14 MIDTERM #2: Market Interactions
(covers Section 2: Market Interactions lectures and PS 5 – 7)
Extra Questions. Answers.
Exam Section 2. Answers.
Exam Section 3. Answers.
TNov. 199. Macroeconomic fluctuations
9.1 Business cycles, unemployment
● TW Chapter 20
○ NBER Business Cycles
○ BLS Unemployment Data
○ Maddison Historical Statistics data on GDP from the past.
Lecture Notes
RNov. 219.2 Central Banks
● TW Chapter 22
○ Data from FRED St. Louis Fed
9.3 Aggregate demand, aggregate supply
● TW Chapter 24 (ignore Figure 24.2 and upper-right panel of Figure 24.5)
Lecture Notes
PS 8 due (covers Nov. 5 – Nov. 12). Answers.
TNov. 26(class canceled – no class)
RNov. 28(Thanksgiving break – no class)
TDec. 39.3 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.
○ Lael Brainard, “Why Climate Change Matters for Monetary Policy and Financial Stability,” Board of Governors of the Federal Reserve System, November, 2019.
○ IGM Forum expectations about Central Banking and Climate Change
○ Lecture Notes
PS 9 due (covers Nov 19). Answers.
RDec. 5Review for Final Exam
Lecture Notes
PS 10 due (covers Nov. 21 – Dec. 3). Answers.

Final Exams
University Final Exam Schedule
○  TA Q&A session Monday 12/9 1:00 PM – 2:00 PM in PAC 136
○  Prof. Raynor Q&A session Tuesday 12/10 10:00 AM – 1:00 PM in PAC 001

Dec. 11FINAL EXAM Section 3: 9:00 AM – 12:00 PM in PAC 001
Dec. 12FINAL EXAM Section 2: 2:00 PM – 5:00 PM in PAC 004

Course Statements

Students with Disabilities

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 or can be reached by email ( or phone (860-685-2332).

Religious Observances

If you anticipate that your religious/spiritual observance may conflict with academic obligations such as attending class, taking examinations, or submitting assignments, you can work directly with me to make reasonable arrangements. Should you require additional support or guidance, please feel free to reach out to Rabbi David Teva, Director of the Office of Religious and Spiritual Life at or any of the chaplains in the Office of Religious and Spiritual Life at

Title IX Resources

If past trauma inhibits your ability to fully participate in class, please contact Debbie Colucci, Deputy Title IX Coordinator, at, or your class dean. Additionally, and if you are comfortable, you can work directly with me to make reasonable arrangements.

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.

Honor Code

All students of Wesleyan University are responsible for knowing and adhering to the Honor Code of this institution (see the Student Handbook for details). I will not tolerate violations of the Honor Code (e.g., cheating, plagiarism, or aiding in academic dishonesty) and will report any incidents of misconduct to the Honor Code Council. Students in violation of the policy are subject to academic sanctions from the faculty member and non-academic sanctions up to and including expulsion.