This courses teaches how to apply the tools of economic reasoning to a variety of topics in which businesses create or react or public policies. The central ideas are Surplus Changes, Efficiency, and Incentives. Changes in economic surplus--- consumer and producer surplus at its simplest--- show who gains and loses from policies, and hence predicts how a business is most likely will react in the public arena. A policy is "efficient" if it maximizes the sum of everyone's surplus, and this is the benchmark for creating policy that maximizes social wealth. Any policy provides Incentives as a result of its effect on surplus, and care must be taken that these incentives lead to the desired outcome. Understanding how to apply these three ideas is a major objective for an economics education. The hardest part is learning how to apply them in different contexts, which is the aim of this course. In the course of so doing, students will also learn the facts involved in a wide variety of public policy problems in government regulation, ranging from antitrust laws to pollution regulation, public-utility pricing, labor policy, and the safety of consumer products.
Lecture slides are in the directory http://rasmusen.org/g406/slides/. Old quiz and test answers are in the directory http://rasmusen.org/g406/tests/.
INTEGRITY AND HONESTY
The Kelley School's Honor Code is something you have all read. It is online at http://www.kelley.iu.edu/ugrad/honorcode.cfm. Living up to the Honor Code's integrity is not hard; don't cheat, and tell me if you see somebody else cheating. I will take appropriate disciplinary actions against any offenders. Do not cheat! I am strict about that, and have used the official procedures of the Dean of Students before. Most important, cheating is immoral, whether or not you get caught. Leave this course with your honor intact.
September 3, 5. Market failure. Chapter 2 .
September 10, 12. Government failure. Chapter 3. Quiz 1 (the 12th).
September 17, 19, 24. Life, Time, and Taxes. Chapter 4 .
September 26, October 1,3. Market power. Chapter 5 .
October 8, 10, 15. Monopolizing. Chapter 6 . Quiz 2 (the 15th).
October 17. No class. Professor Rasmusen will be at a corporate law conference in Urbana. October 22,29. Public utilities. Chapter 7 .
October 23 (Wednesday). Review session, 8:30-10pm (optional). Room to be announced.
October 24. Midterm.
October 31, November 5. Asymmetric Information. Chapter 8.
November 7, 12. Labor. Chapter 9 .
November 14, 19 (Quiz 3), 21. Banking. Chapter 10 .
December 3,5. Pollution. Chapter 11.
December 10. No class. Professor Rasmusen will be giving a talk at the University of Rochester.
December 12. Conservation. Chapter 12.
December 14 (Saturday) 2-4 p.m. Review session (optional). Room to be announced.
December 18. Final Exam. 2:45-4:45 p.m., BU 341 (same as lecture room). There is a sheet of facts you should know for the final.
Write a 900-1,100 word essay saying something interesting about some federal regulation. Send me the number and name of the regulation from the Code of Federal Regulations by October 22 and your essay by December 10. I will not tell you anything more about what to do for this assignment, because I purposely want it to be unclear, as with so many assignments in the real world.
An example of a C.F.R. name and number is
Title 21: Food and Drugs
PART 173—SECONDARY DIRECT FOOD ADDITIVES PERMITTED IN FOOD FOR HUMAN CONSUMPTION
Learning Outcomes. What students will learn in this course is how to think logically and follow a sequence of reasoning, how regulations are made and carried out, how they should be made and carried out, and their effects on people and businesses. Standard Kelley Notice: Portions of this course may be subject to electronic proctoring. Video cameras may be used to monitor the room during student assessment activities, including but not limited to, exams, tests, and quizzes. Video recordings may be used to investigate or support disciplinary action. All access to and use of video equipment and recordings will follow applicable IU policies.