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             INTRODUCTION  
             TO  
             MICROECONOMICS 
             E201 
             
             
             
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                                        Dr. David A. Dilts 
             Department of Economics, School of Business and Management Sciences 
                              Indiana - Purdue University - Fort Wayne 
             
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            May 10, 1995 
            First Revision July 14, 1995 
            Second Revision May 5, 1996 
            Third Revision August 16, 1996 
            Fourth Revision May 15, 2003 
            Fifth Revision March 31, 2004 
            Sixth Revision July 7, 2004 
             
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      Introduction to Microeconomics, E201  
       
       
      8 Dr. David A. Dilts 
       
       
       
      All rights reserved.  No portion of this book 
      may be reproduced, transmitted, or stored, by 
      any process or technique, without the express 
      written consent of Dr. David A. Dilts 
       
       
       
       
      1992, 1993, 1994, 1995 ,1996, 2003 and 2004 
       
       
       
       
       
       
      Published by Indiana - Purdue University - Fort Wayne 
      for use in classes offered by the Department of Economics,  
      School of Business and Management Sciences at I.P.F.W.  
      by permission of Dr. David A. Dilts 
          
                            TABLE OF CONTENTS 
          
          
         Preface..............................................................................................................................   ii 
         Syllabus.............................................................................................................................   iv  
          
         I.  Lecture Notes 
          
           1. Introduction to Economics......................................................................................    2 
           2. Economic Problems................................................................................................    7 
           3.  Interdependence and the Global Economy ............................................................  12 
           4. Supply and Demand...............................................................................................  18 
           5. Elasticity .................................................................................................................  29 
           6. Consumer Behavior................................................................................................  33 
           7. Costs......................................................................................................................  37 
           8. Competition............................................................................................................  43 
           9. Monopoly................................................................................................................  50 
           10. Resource Markets ..................................................................................................  56 
           11. Wage Determination...............................................................................................  60 
           12. Epilogue..................................................................................................................  68 
          
         II.  Reading Assignments 
          
           1. Introduction to Economics......................................................................................   71 
           2. Economic Problems................................................................................................   87 
           3.  Interdependence and the Global Economy ............................................................ 101 
           4.  Supply and Demand............................................................................................... 116  
           5. Elasticity ................................................................................................................. 134 
           6. Consumer Behavior................................................................................................ 146 
           7. Costs...................................................................................................................... 154 
           8. Competition............................................................................................................ 165 
           9. Monopoly................................................................................................................ 179 
           10. Resource Markets .................................................................................................. 191 
           11. Wage Determination............................................................................................... 200 
           12. Epilogue.................................................................................................................. 217 
          
         III.  Appendix A 
          
         Sample Midterm Examination ........................................................................................... 222 
         Sample Final Examination................................................................................................. 229 
            
         IV.  Appendix B 
          
         Bibliography, book list ...................................................................................................... 236 
          
                                    i 
       
                        PREFACE 
       
       
         This Course Guide was developed in part because of the high cost of college 
      textbooks, and in part, to help organize students= studying by providing lecture notes.  
      This Guide was made possible because the administration of IPFW had the foresight to 
      make the campus= printing services available to duplicate these sorts of materials, and 
      provide them at cost through the auspices of the University Bookstore in Kettler Hall.  
      Without the active participation of both the campus duplicating services, and its most 
      cooperative staff, and the bookstore this would not be available. 
       
         The department, school nor the professor make anything whatsoever from this 
      Guide.  In fact, the department=s budget and the professor=s own resources are used in 
      the writing of the Guide, and the numerous draft copies that are produced in the 
      revisions of this document.  Like the sign in the Mom and Pop bait shop on Big Barbee 
      Lake says, “This is a non-profit organization, wasn’t planned to be  B it just sorta worked 
      out that way.”  Well, actually it was planned to be a non-profit enterprise in this particular 
      case. 
       
         The professor also wishes to acknowledge the fact that several students have 
      proposed changes, improvements, caught errors, and helped to make this document 
      more useful as a learning tool.  Naturally, any errors of omission or commission are 
      those of the professor alone. 
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
                          ii