Course Introduction

Classes for EC2101 Microeconomics: Behaviour, Organisations and Institutions take place on Wednesday at 2pm in the Geography Lecture Theatre and on Friday at 11am in Block A Level 1 of the Food Science Building. I teach the first half of the module in Term 1. Daniel Blackshields will take you through the second half of the module in Term 2.  My aim aim for EC2101 is for it to be a course slightly different to many of the courses you take in college. Time will tell whether that goal is achieved.

To succeed at this course you must attend class and keep up to the date with the readings. The course aims to gradually build a solid base of economic understanding throughout the term. The emphasis is on understanding and this is not something that can be achieved with intensive cramming at the end of the year.

Understanding is developed over time and requires reading and thinking about a broad range of material. Many of the assigned readings are simply chapters extracted from books. If a particular reading interests you, you should follow it up by reading more from the same book or by looking at some of the material referenced in the reading.  You will not have a better opportunity in life to explore new ideas.  The library, it and its facilities are free of charge.  Pretty soon you’ll be working and paying tax for somebody else to not use these great facilities.

If you do not find the material interesting it will be difficult to find the enthusiasm to try and understand the material. I am firmly of the belief that the material is interesting (that's why I have chosen it for the course) and is worth exploring in greater depth. So get stuck in! Get out there. The range of writings in economics is huge, both on paper and on the internet, and you should follow your interests.

Very soon you will find that by doing something that is relatively easy (what could be easier than sitting down reading a book) you have a broad range of knowledge and a greater understanding of what it is economics is actually supposed to be. I hope that by the end of this course you will find that there is a difference between "reading and understanding economics" and "studying and learning economics". A noble aspiration, perhaps, but one I'm sure we'll have some fun during the year trying to achieve.

I know you have many uses for your time and face choices and trade-offs in how your use your time. This is like any choice that economics seeks to explain.

Inevitably, using scarce resources to produce or consume a particular good or service means that those resources cannot be used to produce anything else or to satisfy other consumer wants. The 'opportunity cost' of using a resource is the next most valuable thing the resource could have been used to produce or do, because that is what has been given up. The use of time is no different.

Every economic choice entails an opportunity cost, whether it is something as simple as deciding to have a sandwich or a salad for lunch, or something as important as choosing a career or a spouse. Faced with the same option, differing people make different choices because they place different values on each alternative's cost and expected outcome.

Robert Frost's famous poem, "The Road Not Taken", is a perfectly clear description of a choice involving an opportunity cost. Each person who comes to a crossword must make a choice for it is impossible to travel down two roads at the same time, and the road that is chosen today often leads a person to different roads and choices tomorrow.

THE ROAD NOT TAKEN (1916)
Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;

Then look the other, just as fair,
And having perhaps a better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,
And both that morning equally lay
In leaves no step had trodden back.
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two woods diverged in a wood, and I -
I took the one less traveled by,
And that has made all the difference.

- Robert Frost.

The poem is his, the choice is yours.  I hope you enjoy the class.

To begin you should read with the reading material for section 1A on Blackboard  which gives the opening chapters from two books which have explored the subject matter of economics.  The first is Welcome to the World of Bloomberg Television from John Kay’s excellent 2003 book The Truth About Markets. The second is Love, Death and Money, the first chapter from satirist PJ O’Rourke’s book on economics and economic systems called Eat the Rich.  The difference in approach of these two authors to the subject should be clear from their opening chapters.