Published Aug 29, 2022
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 market failures in real economies |
| Weeks | Topics | Chapters Nechyba* |
| 1-2 | Review of competitive equilibrium concepts | TN14-16 |
| 3-4 | Price distortions | TN18-20 |
| Oct 6 | Midterm 1 | |
| 6-7 | Externalities | TN21 |
| 8-9 | Asymmetric information | TN17, TN22 |
| Nov 15 | Midterm 2 | |
| 10-11 | Monopoly/Oligopoly | TN23 |
| 12 | Public Goods/Choice Theory | TN27-28 |
*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.
Notes and complementary readings will be posted on LEARN on an ongoing basis.
| Component | Value |
|---|---|
| Assessment | Weighting |
| Assignments | 20% |
| Midterm 1 | 20% |
| Midterm 2 | 20% |
| Final exam | 40% |
Participation assignments: At the end of a topic, students will submit exercises and application questions. Details on format, timing and submission will be posted on LEARN. Each assignment (there will be 5 of them) is worth 4%.
Midterms: Each test will take place on the day (and in the classroom) of the course’s regular scheduled time.
Final exam: The final exam will cover the 6 topics with more emphasis on the last two topics not tested in the 2 midterms. It will be scheduled during the final exam period.
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.
You are expected to complete assignments on time. Late assignments are subject to a point penalty (15% per day late). Assignments submitted after I presented or posted the correction will not be accepted and will receive a grade of 0.
If a student becomes ill due to covid, the student needs to inform the instructor and self-declare their illness on the UW Quest website. The student is encouraged to use virtual office hours for any questions on the material during the period of self-isolation.
There is no make-up for a midterm test. A student who has been ill and misses the midterm test needs to provide appropriate medical documentation (including if it applies, a self-declaration of symptoms for covid related absence) to the instructor within 48 hours of the missed test. In this case, the weight of the midterm will be shifted onto the final exam’s weight. A student needs to write at least one of the two midterms to pass the course.
For a missed final exam, refer to the departmental deferred examination policy or next policy below.
All deferred Final 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.
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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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.
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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.