Published Apr 30, 2023
This course explores the many ways in which the assumptions of the perfectly competitive model are violated in the real world, and the consequences of these market failures for consumers and firms. The course examines potential government intervention to "fix" the failures as well as the limits of government intervention. Topics include monopoly/monopsony, externalities, the tragedy of the commons, public goods, asymmetric information, and incomplete information.
Prereq: ECON 391
The course examines the sources of departures from the perfectly competitive market benchmark model and assumptions and how each can be modified to understand and evaluate economic and policy outcomes.
| Understand the analytical tools and models economists use to study market failures |
| Apply the tools to evaluate economic policies associated with or addressing market failures in real economies |
| Duration (weeks) | Topics | Chapters Nechyba* |
| 1.5 | Review of competitive equilibrium and applications | TN14-20 |
| 1.5 | Externalities | TN21 |
| June 8th | Test 1 | |
| 1.5 | Asymmetric Information | TN17, TN22 |
| 1.5 | Market Power: Monopoly | TN23 |
| July 6th | Test 2 | |
| 1.5 | Market Power: Oligopolies | TN24, TN25 |
| 1 | Public Goods | TN27-28 |
| July 27th | Test 3 |
*Microeconomics: an intuitive approach with calculus, Thomas Nechyba. First (2011) or second edition (2017)
| Title / Name | Notes / Comments | Required |
|---|---|---|
| TN: Microeconomics: an intuitive approach with calculus, Thomas Nechyba. First (2011) or second edition (2017) | No | |
| JP: Microeconomics: Theory and Applications with Calculus, Global Edition, Jeffrey Perloff. 4th edition (2018) | No | |
| V: Intermediate Microeconomics A Modern Approach, Hal Varian. Ninth Edition or older. | No |
The textbooks are recommended but not required. Slides and complementary readings supporting lectures will be posted on LEARN on an ongoing basis.
| Component | Value |
|---|---|
| Assessment | Weighting |
| Tests (3) | 25% each |
| Participation | 10% |
| Final assignment | 15% |
Participation assignments: At the end of a topic, students will submit questions. Details on format of submissions will be posted on LEARN.
Tests: Each test will take place on the day (and in the classroom) of the course’s regular scheduled time. For each test, the material will be on the 2 topics just seen.
Final assignment: The final assignment will be due on August 8th. Please note that the use of AI tools for content generation will not be permitted for this assignment. The assignment guidelines and expectations will be posted on LEARN during the first week of class and reviewed in class after the second term test.
No assignment screening will be used in this course.
Students who would like their test or assignments regraded need to ask the instructor immediately after the test or assignment has been given back. The regrading will apply to the entire test and may not automatically result in a higher grade than before.
Late bi-weekly email assignments are subject to a late penalty (15% per day late).
No late submission of the final assignment will be permitted. If a student is unable to submit the assignment by the due date, with appropriate medical justification and documentation submitted within 2 days of the due date, the weight of the assignment will be equally split between the three midterm tests' weight.
A student who has been ill and misses a term test needs to provide appropriate medical documentation to the instructor within 48 hours of the missed test.
With appropriate medical justification submitted at the appropriate time, a deferred term test will be scheduled during the deferred exam period in August.
In the event that a student misses two of the tests scheduled during the term, they will have the possibility to rewrite them back-to-back over the allocated examination time assigned during the deferred exam day.
For details on deferred exam policies, refer to the departmental deferred examination policy or next policy below.
All deferred exam requests for economics courses are administered by the Economics Undergraduate Office. Please consult the Deferred Exam Policy at https://uwaterloo.ca/economics/undergraduate/resources-and-policies/deferred-final-exam-policy.
In order to maintain a culture of academic integrity, members of the University of Waterloo community are expected to promote honesty, trust, fairness, respect and responsibility. [Check the Office of Academic Integrity for more information.]
The University of Waterloo expects that students will do their own learning, and not fabricate, falsify, or otherwise pass off others’ work as their own. Using ChatGPT (or similar tools that generate text, code, or visual images) for content generation and submitting it as one’s own original work is a violation of the University of Waterloo’s Student Discipline Policy.
Students should be aware that this course contains the intellectual property of their instructor, TA, and/or the University of Waterloo.
Intellectual property includes items such as:
Course materials and the intellectual property contained therein, are used to enhance a student’s educational experience. However, sharing this intellectual property without the intellectual property owner’s permission is a violation of intellectual property rights. For this reason, it is necessary to ask the instructor, TA and/or the University of Waterloo for permission before uploading and sharing the intellectual property of others online (e.g., to an online repository).
Permission from an instructor, TA or the University is also necessary before sharing the intellectual property of others from completed courses with students taking the same/similar courses in subsequent terms/years. In many cases, instructors might be happy to allow distribution of certain materials. However, doing so without expressed permission is considered a violation of intellectual property rights.
Please alert the instructor if you become aware of intellectual property belonging to others (past or present) circulating, either through the student body or online. The intellectual property rights owner deserves to know (and may have already given their consent).
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Why? Starting in winter 2020, your chosen/preferred first name listed in WatIAM will be used broadly across campus (e.g., LEARN, Quest, WaterlooWorks, WatCard, etc). Note: Your legal first name will always be used on certain official documents. For more details, visit Updating Personal Information.
Important notes
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On Campus
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Off campus, 24/7
Full details can be found online on the Faculty of Arts website
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For more information about the purpose of territorial acknowledgements, please see the CAUT Guide to Acknowledging Traditional Territory.
Policy 33, Ethical Behaviour states, as one of its general principles (Section 1), “The University supports academic freedom for all members of the University community. Academic freedom carries with it the duty to use that freedom in a manner consistent with the scholarly obligation to base teaching and research on an honest and ethical quest for knowledge. In the context of this policy, 'academic freedom' refers to academic activities, including teaching and scholarship, as is articulated in the principles set out in the Memorandum of Agreement between the FAUW and the University of Waterloo, 1998 (Article 6). The academic environment which fosters free debate may from time to time include the presentation or discussion of unpopular opinions or controversial material. Such material shall be dealt with as openly, respectfully and sensitively as possible.” This definition is repeated in Policies 70 and 71, and in the Memorandum of Agreement, Section 6
Please note that a cross-listed course will count in all respective averages no matter under which subject code it has been taken. For example, a PHIL/PSCI cross-list will count in a Philosophy major average, even if the course was taken under the Political Science subject code.
Academic integrity: In order to maintain a culture of academic integrity, members of the University of Waterloo community are expected to promote honesty, trust, fairness, respect and responsibility. [Check the Office of Academic Integrity for more information.]
Grievance: A student who believes that a decision affecting some aspect of their university life has been unfair or unreasonable may have grounds for initiating a grievance. Read Policy 70, Student Petitions and Grievances, Section 4. When in doubt, please be certain to contact the department’s administrative assistant who will provide further assistance.
Discipline: A student is expected to know what constitutes academic integrity to avoid committing an academic offence, and to take responsibility for their actions. [Check the Office of Academic Integrity for more information.] A student who is unsure whether an action constitutes an offence, or who needs help in learning how to avoid offences (e.g., plagiarism, cheating) or about “rules” for group work/collaboration should seek guidance from the course instructor, academic advisor, or the undergraduate associate dean. For information on categories of offences and types of penalties, students should refer to Policy 71, Student Discipline. For typical penalties, check Guidelines for the Assessment of Penalties.
Appeals: A decision made or penalty imposed under Policy 70, Student Petitions and Grievances (other than a petition) or Policy 71, Student Discipline may be appealed if there is a ground. A student who believes they have a ground for an appeal should refer to Policy 72, Student Appeals.
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Turnitin.com: Text matching software (Turnitin®) may be used to screen assignments in this course. Turnitin® is used to verify that all materials and sources in assignments are documented. Students' submissions are stored on a U.S. server, therefore students must be given an alternative (e.g., scaffolded assignment or annotated bibliography), if they are concerned about their privacy and/or security. Students will be given due notice, in the first week of the term and/or at the time assignment details are provided, about arrangements and alternatives for the use of Turnitin in this course.
It is the responsibility of the student to notify the instructor if they, in the first week of term or at the time assignment details are provided, wish to submit alternate assignment.