ECONOMICS 500                                                          Tom Larson

CSULA                                                                            Spring 2006


MBA Economics



Office:  Simpson Tower, STF908

Phone:   (323) 343-2938/2930

Office Hours: MW 2:30-4:30, or by appointment.

e-mail: use course web site


This course includes a web site supported by the University and by WebCT.

Class Web Site: At this page you can create your WebCT account.  To access the course site, you will need to locate the course listing so it can be added to your WebCT account. Go to See courses. From here, go to the College of Business and Economics page and then select Econ500tl from the course list.  Once at Econ500tl, click on the “plus” icon and then self-register for the course. You will need internet access and a web browser (preferably Netscape or Firefox.

The web site contains a variety of features, including online quizzes, course syllabus, course notes, etc.  You should familiarize yourself with the website as soon as possible. 


About the Course:

This course is designed to introduce the principles of both microeconomics and macroeconomics. The objective in this course is to familiarize you with the major issues in economics, without resorting to rigorous economic theory. This course is meant to enable you to understand the essential elements of how consumers, firms, and markets behave. We will also focus on measuring economic activity, inflation, unemployment, money supply, and the role of the government. It is important that students with non-business undergraduate degrees have a reasonable background in economics before they begin the MBA core courses. Knowledge of how the market functions, how quantities of goods are bought and sold in such markets, and how prices at which they are bought and sold are determined is essential. Furthermore, it is important to understand how the entire economy functions and therefore what determines the total output of goods and services are produced, the unemployment rate, the rate of inflation, and the interest rate.


Communication tools: The course website has a Discussion site. I will be placing discussion topics there almost weekly.  Part of your grade will be based on participation in the weekly discussions.  There is a Mail tool that allows students to email the instructor privately and email other students.



FINAL: The final exam will be in class on June 7, from 7:30-10:00 pm.



REQUIRED TEXTs: (1) Economics Principles and Policy, 10th Edition, Baumol and Blinder (required). The text can be purchased either in hardcopy or as an e-book. The hard copy text comes with a CD-ROM.  The textbook also has a web site –

(2) Peddling Prosperity, Paul Krugman, Norton, 1995.  Paul Krugman is one of the top economists in the world today.  He is not only a good economist but is also very knowledgeable about how economic advice is used.  Some people think he is not really an economist because he can be very blunt and often writes for the popular media. He is a serious economist who has a good chance of receiving a Nobel Prize.  This book helps you understand macroeconomics and policy and lets you see how bad as well as good policy is made.  There is a very good website for Krugman material:

Recommended: The Great Unraveling, Paul Krugman.



It is also recommended that you keep yourselves informed about current economic news and issues by reading one or more of the following:

The Wall Street Journal

The Los Angeles Times

The New York Timesyou can sign up for its internet news alerts.

The Economistthis is the best of this bunch, and is also the most expensive, per copy.












What is Economics



The U.S. Economy: Myth & Reality



Scarcity and Choice



Homework 1 Assigned



Supply, Demand and Prices: An Initial Look



Consumer Choice: Demand


Six :

Demand and Elasticity






Homework 2 Assigned


Seven & Eight:

Production and Costs



Perfect Competition



Quiz 1: Chapters 1 & 2



Homework 3 Assigned









Monopolistic Competition & Oligopoly



QUIZ 2: Chapters 3 & 6



The Case for Free Markets



Market Failures






Intro to Macroeconomics



MIDTERM: Covers micro chapters



Goals of Macroeconomic policy







Aggregate Demand & the Consumer



Unemployment Or Inflation



Supply Side Equilibrium


Krugman, 1

The Attack on Keynes



Homework 4 Assigned






Fiscal policy



Money and the Banking System


Krugman, 2

Taxes, Regulation and Growth


Krugman, 3

The Supply-Siders



Homework 5 Assigned






Monetary Policy



Debate Over Monetary and Fiscal Policy



Budget Deficits


Krugman, 4




Homework 6 Assigned






Inflation VS Unemployment



International Trade and Public Policy



Exchange Rates & Macroeconomics


Krugman, 8

In the Long Run Keynes is Still Alive









Macro chapters.



Krugman: 1-4, 8.





The course grade will be based on:

Midterm (35%)

Final (35%)

Homework (15%)

Quizzes (10%)

Course participation (5%) – this is based on attendance and participation in online discussions.

Exams will be based on material covered in lectures, the homework and in assigned reading.

Quizzes will be online and open book, but will be timed. You will have one week to complete each homework assignment.


The course grades will be assigned as follows:

A         90-100%

B         80-89%

C         65-79%

D         55-64%

ECON 500                                                                             Tom Larson



What is Economics?



Economics is not about highly abstract ideas that few people have time to think about (well, sometimes it is) - it is about a wide variety of phenomenon that we each deal with in everyday life.  Economics does tend to focus on market behavior, but is really another way of understanding human behavior.


Economic theory has a lot to offer any individual trying to earn a living and raise a family when faced with inflation and unemployment and not enough money, and trying to make good decisions on purchases and savings while striving for a better life.  Economic theory has a lot to offer any society that is faced with inflation and unemployment and is trying to make good decisions on expenditures and investments that will benefit all members.


This course has a number of goals and some of them are identified below:


1.         We will seek to clearly identify important ideas in economics.  This is not just the instructor’s job; he already has a pretty good idea about which ideas are important.  By taking good notes and working at summarizing the lectures and chapters, the student works to identify and understand the important ideas.  A joint effort is required.


2.         We will identify both virtues and shortcomings of market behavior.  We want to know how markets benefit individuals and society, but we also need to know the limitations and failures of markets.


3.         We are engaged in scientific study and must be aware of opposing opinions in fair disputes.  Dissent is encouraged.


4.         We will be studying economic theories, but will be concerned with finding applications in the real world.  Theory is useful because it illuminates problems that cannot be understood through intuition or "common sense."