Course Syllabus

ECO200Y5Y – Microeconomic Theory

Department of Economics

Summer 2021

Contact Information

Instructor: W.H. Lee Bailey

Email: [email protected]

Office: Kaneff Centre Room 3250

Voicemail: 905-569-4908

Office hours: Monday and Wednesday 08:30 to 09:00 a.m.

Teaching Assistant: Mary Kazek

Office hours: Monday and Wednesday 10:30 to 11:00 a.m.

Teaching Assistant: Nina Zi Wei Lo

Office hours: Monday and Wednesday 10:30 to 11:00 a.m.


Meeting Link:

All lecture times, tutorial times, exam times, deadlines, etc. are stated in local Toronto time.

Toronto adheres to Eastern Daylight time. It is your responsibility to correctly convert local

Toronto time to your time zone.

Set up your official Zoom account at


1. Please use the Quercus Discussion Forums to post questions about the economic models presented in this course. There is a forum called FAQ if you have general questions about the course.

2. Professor Bailey’s email is for matters that cannot be addressed during Office Hours or using the Discussion Boards. He answers email during his office hours.

3. Our Teaching Assistants are not allowed to answer your emails. They can be reached during Office Hours or through the Discussion Board. Your email will be forwarded to the Professor/ Department and your email address will be filtered.

4. Please don’t use the Quercus Inbox Application. It is not monitored.

Contact Hours

This course is divided into 24 Sessions. Prior to attending each Session you should complete the Online Asynchronous Lecture Videos (Pencasts) and Activities (Pencast Reviews) that we have created on Quercus. This should take around 1 hour for each Session. The first set of Asynchronous Lecture Videos and Activities should be completed before attending the Session on May 3. Lectures, tutorials and activities are held between 09:10 and 11:00 a.m. Excepting some unforeseeable emergency, we will not use the 11:00 to 12:00 time period because you are devoting 1 hour per Session of your time towards the Asynchronous Lectures and Activities.

Course Objectives and Learning Outcomes

This is a course in microeconomic problem solving. Learners will develop the ability to apply the concepts and procedures of microeconomic analysis to illustrate, quantify and interpret the behavior of economic decision makers in a variety of contexts.

Sessions 1 to 12: Households

Outcome 1: Learners will develop the ability to apply the concept of optimal choice and the procedures of microeconomic analysis to illustrate, quantify and interpret the behavior of decision makers using a variety of utility functions across several models of household behaviour.

The Concept of Optimal Choice

Decision-makers choose alternatives on the highest affordable indifference curve

Procedures of Analysis will include but are not limited to

1. Indifference Curve Analysis

2. Demand Curve Analysis

3. Cost Benefit Analysis

4. Welfare Measures

5. Elasticity Analysis

6. Revealed Preference Analysis

Functional Specifications will include but are not limited to

1. Cobb-Douglas

2. Perfect Substitutes

3. Perfect Complements

4. Constant Elasticity of Substitution

5. Quasi-linear

6. Non-essentials

7. Concave

8. Quadratics

9. Economic Bads


Models of Household Behaviour will include but are not limited to

1. Commodity Demand

2. Housing

3. Taxes, Subsidies and Transfers

4. Endowments

5. Labour Supply

6. Time and Money Prices

7. Risky Assets

8. Saving and Borrowing

9. Human Capital

10.Contingent Consumption

11.Expected Utility

12.Mean-Variance Analysis


14.Behavioral Economics

15.Public Goods

Sessions 13 to 24: Firms

Outcome 2: Learners will develop the ability to apply the concept of optimal choice and the procedures of microeconomic analysis to illustrate, quantify and interpret the behavior of decision makers using a variety of production functions while making the distinction between short-run and long-run horizons and with due consideration of market structure.

The Concept of Optimal Choice

Decision-makers maximize profit when inputs are hired so that the value of marginal product is equal to marginal cost and when output is sold at levels where marginal revenues are equal to marginal cost

Procedures of Analysis will include but are not limited to

1. Short-run and Long-run Isoprofit Analysis

2. Short-run Cost Analysis

3. Short-run and Long-run Isoquant Analysis

4. Long-run Cost Analysis

5. Factor Demand Analysis

6. Cost Benefit Analysis

7. General Equilibrium Analysis

8. Game Theory Analysis

Functional Specifications will include but are not limited to

1. Cobb-Douglas

2. Perfect Substitutes

3. Perfect Complements

4. Constant Elasticity of Substitution

5. Quasi-linear

6. Quadratics

7. Cubics

8. Hybrids

9. Systems

Models of Market Structure will include but are not limited to

1. Perfect Competition

2. Single-price Monopoly

3. Price-discriminating Monopoly

4. Natural Monopoly

5. Monopsony

6. Monopolistic Competition

7. Cournot Oligopoly

8. Stackelberg Oligopoly

9. Bertrand Oligopoly

10.Models of Strategy

11.Models of Collusion

Prerequisites and Exclusions

The prerequisites and exclusions for this course can be found in the Academic CalendarPrerequisites are strictly checked and enforced and must be completed before taking this course. By taking this course you acknowledge that you will be removed from the course at any time if you do not meet all requirements set by the Department of Economics. Entry into third year Advanced Microeconomics requires a grade of 70 percent in ECO200Y5Y.

Course Materials

Our textbook is written by Professor Hal Varian. It is an internationally renowned, and widely adopted book. After a distinguished career at University of California Berkeley Professor Varian spends his retirement as Chief Economist at Google. His book is called Intermediate Microeconomics A Modern Approach ISBN 978-0-393-69132-0 (9th Edition). It is available at the University of Toronto Bookstore.

The Study Guide called Workouts, written by Professor Ted Bergstrom and Professor Varian, is an excellent resource and one of the main reasons I adopted this textbook. The questions are brilliant. The publishers have now decided to take this Guide out of print. You can find a free pdf are on the internet.

The SmartWork5 "Student Set" ID is 439006 (ECO200Y5Y Summer 2021) The platform is not very good but the questions are excellent. Many of them come from Workouts. SmartWork5 is not for grades and there are no deadlines but you will notice that a large number of my test and exam questions are from Workouts/SmartWork.

Course Outline

May 3
2, 3, 4
May 5
5, 6
May 10
15, 8, 17
May 12
Welfare Metrics
7, 14, 16
May 17
May 19
Test 1

May 24
No Class

May 26
May 31
June 2
June 7
11, 13
June 9
Exceptions I
31, 37
June 14
Test 2

June 16
No Class

July 5
19, 20
July 7
Cost I
21, 22
July 12
Cost II
July 14
July 19
32, 33, 34
July 21
Test 3

July 26
Exceptions II
35, 38, 36
July 28
25, 26
August 2
No Class

August 4
Input Markets
August 9
August 11
Game Theory
29, 30
August 16
Test 4

August 18
No Class


Grades will be awarded based on the following weights

Synchronous Final Examination
2 Hours
Synchronous Term Tests
Test 1: May 19
Test 2: June 14
Test 3: July 21
Test 4: August 16
Best 3 of 4
Synchronous Classroom Activities
Best n of N Scores
Asynchronous Pencast Reviews
Best 50 Scores

The Synchronous Final Examination is 2 hours and it will be scheduled during the Exam Period and delivered through Quercus Quizzes.

Synchronous Term Tests are 50 minutes and held during class time 09:30 to 10:30 a.m. Students with AARC accommodations will start earlier. We will present solutions, and might have a graded activity following the test. Tests will be delivered as Quercus Quizzes that combine numeric response questions and file upload “show your work and a diagram” questions. Test instructions will say

Work independently for 50 minutes. Do not exit Quercus during the Test. Varian Textbook, Notebooks, Calculators are allowed. Pencast Videos are allowed. Other online resources are not allowed.

Synchronous Classroom Activities are held during class time. These will be delivered through Quercus Assignments, Quizzes and Zoom.

Asynchronous Pencast Reviews are Quercus Quizzes.

Late Submissions

Synchronous Classroom Activities, Term Tests and the Exam are synchronous. These will auto-submit at the deadline, whether you have finished or not. Quercus provides a timer. It is your responsibility to finish your work on time. It will take a few minutes for an upload to complete. If you wait too long, and your upload is missing, you receive zero grade.

Asynchronous Pencast Reviews are subject to a 50% per day late penalty.

Missed Term Work

Asynchronous Pencast Reviews and Synchronous Classroom Activities cannot be made up. Missed work receives a zero grade.

Students who miss a Term Test because of circumstances beyond their control (e.g. illness or an accident) can request that the Department grant them special consideration. The following steps must be completed in order to be considered for academic accommodation.

1. Your absence must be declared on ACORN on the day of the missed test, or by the day after, at the latest.

2. You must notify your professor using the Missed Term Test application on Quercus within one week of the missed test.

3. Complete an online Special Consideration Request within one week of the missed test. The University is temporarily suspending the need for a doctor’s note or medical certificate for any absence from academic participation if you are experiencing COVID-19 symptoms. However, this policy may change at any point during the course. If you missed your test for a reason connected to your registered disability, the department will accept documentation supplied by Accessibility Services. If you visited a Dentist, Nurse/Nurse Practitioner, Physician/Surgeon, Psychologist, Psychotherapist or Social Worker registered and licensed in the Province of Ontario, have them fill out the University’s Verification of Student Illness or Injury form. In other cases, a Verification of Extenuating Circumstances form is acceptable. Other documentation can include, but is not limited to, automobile collision or police reports, death certificates, and supporting documentation from employers, lawyers and other related personnel. Please email your form to [email protected].

4. Consult the Office of the Registrar should your absence be lengthy or affect multiple courses.

The written explanation and documentation that you submit represents an appeal from you, requesting the opportunity to account for that portion of your grade in some other manner. If an appeal is not received, or if the appeal is deemed unacceptable, you will receive a grade of zero for the item you missed. If the appeal is granted

1. your first missed Term Test results in a “best 3 out of 3” policy and

2. your second, third and even fourth missed Term Test grades will be proxied by the corresponding section of the Final Exam and the “best 3 out of 3 policy” will be applied.

Note that it is your responsibility to ensure that your email account is working. Claims that a Departmental decision was not received will NOT be considered as a reason for further consideration. Note that holidays and pre-purchased plane tickets, family plans, your friend’s wedding, lack of preparation, or too many other tests/assignments are not acceptable excuses for missing a quiz, a test or an item of term work.

Students who cannot complete their final examination due to illness or other serious causes must file an online petition within 72 hours of the missed examination. Late petitions will NOT be considered. Students must also record their absence on ACORN on the day of the missed exam or by the day after at the latest. Upon approval of a deferred exam request, a non-refundable fee of $70 is required for each examination approved.

Regrade Request

Re-marking Pieces of Term Work will be accepted up to one month from the date you returned the term work. Please visit during Professor Bailey’s Office Hours. Please do not email.

Privacy and Use of Course Materials

Course staff will be recording video and audio to track attendance, track team participation, record polls, and to ensure that everyone’s behaviour is in accordance with the Code of Student Conduct and the Academic Code. Your participation will be recorded but it will never be made available to other students in the course.

The material on Quercus belongs to The University of Toronto and it is protected by copyright. You have my permission to download PDF files. You do not have my permission to download or capture the audio and video files.

Screen capturing Sessions is a violation of Provincial law.


In order to take this course, you will need reliable and regular access to a laptop/desktop; a cell phone is NOT sufficient. You will also need reliable and regular access to high-speed internet. See the University’s Recommended Technology Requirements for Remote/Online Learning for more details. Read also the UTM Library Learn Anywhere resource website.

Students must create an official UTM Zoom account using their UTORid and password at Logging in with an unofficial account will leave you stranded in the waiting room and unable to attend lectures / tutorials / office hours.


The Supplement to Course Syllabi (dated March 25, 2021) of UTM’s Department of Economics should be understood to be an integral part of this syllabus. It describes

• your responsibility to adhere to the Code of Student Conduct;

• your responsibility to adhere to the Code of Behaviour on Academic Matters;

• expectations regarding academic integrity, including examples of violations;

• your responsibility to avoid course conflicts;

• your responsibility to honour the copyright of course materials;

• your right to receive accommodations for religious observances;

• the equity statement for this course;

• your academic rights;

• some resources that are available to you as a student, including Accessibility Services.