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Spring 2013 - 63010 - PA393K - Applied Microeconomics for Policy Analysis

Instructor(s): Auerbach, Robert D.
Unique Number: 63010
Day & Time: Th 6:00 pm -9:00 pm
Room: SRh 3.212/221
Waitlist Information:For LBJ Students: UT Waitlist Information
Final Exam Information:May 9, 2013 - 6:00pm - 9:00pm SRH 3.221/212
Course Overview

This course covers microeconomic policy analysis and is usually taken during the first year. It acquaints students with the ways in which economic analysis bears on public policy issues. Students learn to identify the relevant economic analyses for their strengths and weaknesses in relation to the economic principles involved, and to comprehend and assess what professional economists can contribute to the public sector. The first portion of the course covers microeconomic theory with particular emphasis on determining price and output under perfect competition and other forms of market structure; general equilibrium and welfare theory; and the concept of market failure, including public goods, externalities, and imperfect market structure. The second portion of the course provides a rigorous coverage of the methodology of cost-benefit analysis and demonstrates its application through examination of specific case studies.

Section Description

Economic issues facing government legislators and administrators will be interwoven into the lectures including the politics and economic effects of agricultural price supports and payments to refrain from farming, minimum wages, limits to job entry and sales taxes. Concepts relating to international trade including comparative advantage, industrial organization theory, terms of trade and exchange rates will be discussed.

The financial crisis that intensified in September 2008 rocked markets around the world with effects continuing in 2012. The Great Depression has had dire effects on businesses and government. Massive unemployment followed. Basic elements of financial assets and their role in the allocation of inputs in the production of goods and services during this period will be covered.

Since the 1980s a major change in the pricing and quantity of financial assets has occurred with the massive domestic and international flows of capital funds and the extensive use of leverage. The severe crisis in financial assets in that began in 2008 and the ensuing Great recession will be discussed.

The subjects covered include the economic benefits and problems in several types of economic organization of societies from central control to capitalism. The benefits, recent problems and legislation associated with the corporate organization of businesses will be discussed.  The microeconomic analyses of consumer choice, firm profit maximization under competitive and monopolistic competition, the demand and supply of factors of production, and measures of consumer welfare will be presented. Price discrimination will be described with an


  • Robert S. Pindyck and Daniel L. Rubinfeld, Microeconomics, Upper Saddle River, New Jersey, Prentice Hall. As new editions arrive page numbers below assigned in this book may be changed.
  • Robert  Auerbach,  Huffington Post:  "Has Computer Trading Made the Stock Market a "Crapshoot"? "The Social Security Lock Box Hoax and the National Debt",  and "Does the Stimulus Stimulate?"

Additional readings will be supplied.