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Today's Attendance Question

What song is playing right now?

(be sure you're logged into your Stanford account on PollEv...otherwise it won't capture that you're here!)

Please be fully present in lecture.

No phones (except for poll questions)

No tablets.*

No laptops.

* If you want to take notes on a tablet, please sit up front.

Penalty for violations:
I will cold call you on the next question.

Welcome to Econ 50

Christopher Makler

Stanford University Department of Economics

Econ 50: Lecture 1

Today's Agenda

Introductions

Course Overview

Course Structure and Policies

Math Fluency and Sketching Graphs

Introductions

Chris Makler

B.A.: Humanities, Yale
Ph.D.: Economics, Penn
(search & matching theory)
10 years in the education technology industry
Teaching Econ 50 & 51 since 2015
Office: Landau Econ Building, Room 144

Welcome to Econ 50!

TA's and Section Times

Josh (50Q)

Shelby

Sophia

Dean

(Ben)

Wednesdays,
3:30-4:20
4:30-5:20

Wednesdays,
5:30-6:20
6:30-7:20

Thursdays,
10:30-11:20
11:30-12:20

Thursdays,
6:30-7:20
7:30-8:20

Fridays,
9:30-10:20
10:30-11:20

Ramzee Nwokolo

Freelance Mentor

rnwokolo@stanford.edu

Allana Karstetter

Econ Student Services Officer

econ-undergrad@stanford.edu

https://economics.stanford.edu/undergraduate/peer-advising

Econ Department Peer Advising

Other Resources

https://studentlearning.stanford.edu/tutoring

VPTL Peer Tutoring

https://econvideos.ucsd.edu/

IMVH Video Handbook

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What are you planning on majoring in?

Why are
you here?

It's probably not the riveting course description:

It probably is that this course is a prerequisite for a lot of other courses.

...but why?

Ways to Think about Learning

Strategic:

"knowing when" - given an unstructured problem, which model/framework is most relevant?

Schematic:

Procedural:

Declarative:

"knowing why" - how do different concepts/models relate to one other?

"knowing how" - given a well-defined problem, ability to follow correct procedure to solve it

"knowing that" - facts and figures, vocabulary

Goals of the Course

Strategic:

Develop rigorous approach to economic modeling; understand how assumptions map into conclusions.

Schematic:

Procedural:

Declarative:

Understand the relationships between
words, math, and graphs.

Learn the techniques of
optimization, equilibrium, and comparative statics.

Know the definitions of key economic terms.

The overall goal of this course is to prepare you
for all the courses -- and jobs -- that build upon this material...

...by providing you with technical training to solve problems...

...and the ability to take an unstructured situation in the real world
and convert it into a structured, solvable problem.

It's about learning how to use

the "building blocks" of economic models

to construct models of things you're interested in.

It's not about the particular models
we're looking at in this class.

Don't use AI

It will actively harm your grade.

Course Overview

Two Kinds of Optimization

Tradeoffs between two goods

Optimal quantity of one good

🍎

(not feasible)

(feasible)

🍌

Optimal choice

🙂

😀

😁

😢

🙁

🍎

benefit and cost per unit

Marginal Cost

Marginal Benefit

Optimal choice

Tradeoffs between two goods

Optimal quantity of one good

Checkpoint 1: October 13

Model 1: Consumer Choice

Model 2: Theory of the Firm

Checkpoint 2: October 27

WEEK 1

WEEK 2

WEEK 3

Modeling preferences with multivariable calculus

Constrained optimization when calculus works

Constrained optimization when calculus doesn't work

WEEK 4

WEEK 5

Consumer Demand

Applications: Financial Economics and Labor Economics

Checkpoint 3: November 10

Final Exam: December 12 (cumulative)

WEEK 6

WEEK 7

WEEK 8

Production and Costs for a Firm

Profit Maximization

Short-Run Equilibrium

WEEK 9

WEEK 10

Long-Run Equilibrium

Applications: Public Economics

Model 3: Market Equilibrium

50 vs. 50Q

BA vs. BS

B.A. Core Requirements

B.S. Core Requirements

You may take either 50 or 50Q and still choose to declare as a B.S.

You need to take more rigorous math and statistics courses for the B.S.:
specifically, Econ 102A is not a Core course for the B.S.!

Course Structure and Policies

Weekly Schedule

Monday

Tuesday

Wednesday

Thursday

Friday

Quiz

Problem Set Due

Section

Office Hours

Saturday

Sunday

Reading

Lecture

Quiz

Lecture

Quiz

Lecture

Before Lecture

Read the textbook and take online quizzes on the major points to be prepared for learning in lecture

Lecture

Presents new ideas
Illustrate those ideas with simple examples

After Lecture

Exercises for each lecture are designed to help you understand nuance
More complex examples and applications than in lectures; work on connecting the dots

After Each Unit

Exam questions will ask you to apply concepts from lecture to new situations you haven't seen before.

Grading

Absolute, not relative: everyone can get an A, and everyone can get a C.
Each question on each exam has its own "curve":
- A range: demonstrates mastery of nuance
- B range: has core concepts down, struggles with nuance
- C range: struggling with core concepts
Students in 50Q are graded according to the same absolute standards as students in 50 for the homework and exam questions they have in common.

Pre-Class Quizzes and In-Class PollEverywhere (5% of your grade each)

Purpose: get the most out of lecture, by providing incentives to
read the textbook before class and be fully present during class
Each category counts for 5% of your grade.
Each category has a 20 percentage point "boost":
if you get 80% or more right becomes 100%, 70% becomes 90%, etc.
Realistically, as long as you come to most classes and put in effort
into each of the quizzes, these don't affect your grade.
You do not need to email me if you're going to miss class.
You cannot "make up" PollEverywhere points.
Just make every effort to make it to every class you can.

Homework (25% of your grade)

Due every Saturday nights; automatic grace period until 8am Sunday morning.
Each exercise is worth 3 points.
The grade is a message:
- 3 points (check-plus): You've got this!
- 2 points (check): You should review the solution set.
- 1 point (check-minus): You should review this material.
You do not have to do them all. Recommend doing about 2 problems per lecture (6/pset).
Full credit (100 points total) for 10 points per problem set.
Maximum 12 points per problem set.
No homeworks accepted after 8am morning after due (automatic grace period until then)
You must assign pages in Gradescope to get your work graded!

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If you don't have much time for homework, what should you do?

Checkpoint Exams (30% of your grade)

Mondays of weeks 4, 6, 8
Meant to be a way for you to self-assess and keep on track
Three exams means that the stakes are lower for each one. Plus:
- Highest score is 20% of your grade
- Second highest score is 10% of your grade
- Lowest score is dropped
Note that this means taking an exam can raise your grade, but not lower it!
There is no incentive to skip any of the checkpoint exams.
- If you do miss two checkpoints, your highest possible grade in the class is a 90%.
- If you miss all three checkpoints, you cannot pass the class and should withdraw.

Final Exam (35% of your grade)

Friday, December 12 at 8:30am (set by University)
You must take the exam here in person unless you're a traveling student-athlete.
If you have to miss the final due to illness or emergency, you may take an Incomplete only if:
- You have taken at least two Checkpoint exams, AND
- Your average Checkpoint grade is a C or better, AND
- You have a (curved) score of at least 80% on your quizzes (so a raw score of at least 60%), AND
- Your homework score is at least 80 points

Course Web Sites

All lecture notes and problem sets are posted to econgraphs.org.

All quizzes are on Canvas.

Please use Ed Discussions to ask questions (not email).

Please submit homeworks via Gradescope.

Helpful videos from UCSD are available for free, courtesy of UCSD.

Link in the syllabus; videos corresponding to each class will be posted on the syllabus and on ED.

Advice for You from Former Students (from course evals)

"Be prepared for the psets to be fairly more difficult than the examples worked out during lecture.
Sometimes there might be a disconnect between lecture and psets, too."

"Class is difficult, but there are so many resources available to help you. Make use of office hours."

"It's a lot of work, but if you stay on top of it, you'll be fine.
Definitely recommend doing all the psets and as many past exam questions as you can.
Makler's exam kinda made me want to cry, but everyone walked out kinda wanting to cry, so it's okay, probably."

"Organized, streamlined, and despairingly efficient.
This class crunches through concepts and ideas faster than you can get a good grip of them.
Makler is very approachable with questions, however, even if he memes on us a lot."

"...If you can, take the course together with your friends; they may be a great resource in helping you
grasp the course concepts! If you decide to take ECON 50, I hope you have a great time
and that you find a close-knit community of fellow enthusiasts of Economics."

The Small Print

Names and pronouns
Students with documented disabilities
Stanford University Honor Code
Econ Department syllabus
Humor gone wrong

Fluency in Math

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Suppose \(a\), \(b\), and \(c\) are strictly positive constants.

Which of the following is a graph of \(ax+by=c\)?

(A)

(B)

(C)

(D)

\text{slope} = -{a \over b}

\text{slope} = {a \over b}

\text{slope} = -{b \over a}

\text{slope} = {b \over a}

Again suppose \(a\), \(b\), and \(c\) are strictly positive constants.

Which of the following shows the effect of an increase in the parameter \(a\)?

(A)

(B)

(C)

(D)

The four dashed lines below show the line \(ax+by=c\)

Parallel shift out

Parallel shift in

Pivot out

Pivot in

Again suppose \(a\), \(b\), and \(c\) are strictly positive constants.

Which of the following shows the graph of the implicit function \(a\ln(x) + b\ln(y) = c\)?

(A)

(B)

(C)

(D)

Concave, upward sloping curve

Convex, upware sloping curve

Concave, downward sloping curve

Convex, downward sloping curve

Ways of Describing a Model

Verbally

Mathematically

Visually

Diminishing marginal returns:

as you do more of something
(e.g. study)

you get fewer and fewer results
(e.g. more points on an exam)

x = \text{hours studying}

y = \text{grade}

y = f(x)

y = x^a

Diminishing marginal returns:

as you do more of something
(e.g. study)

you get fewer and fewer results
(e.g. more points on an exam)

x = \text{hours studying}

y = \text{grade}

y = f(x)

y = x^a

\text{Marginal return to studying: }{dy \over dx} = f'(x) = ax^{a - 1}

Diminishing marginal returns:

as you do more of something
(e.g. study)

you get fewer and fewer results
(e.g. more points on an exam)

x = \text{hours studying}

y = \text{grade}

y = f(x)

y = x^a

\text{Marginal return to studying: }{dy \over dx} = f'(x) = ax^{a - 1}

What does "diminishing marginal returns" mean?

Diminishing marginal returns:

as you do more of something
(e.g. study)

you get fewer and fewer results
(e.g. more points on an exam)

x = \text{hours studying}

y = \text{grade}

y = f(x) = x^a

{dy \over dx} = f'(x) = ax^{a - 1}

What does "diminishing marginal returns" mean?

{d^2y \over dx^2} = f''(x) =

(a-1)ax^{a - 2}

\begin{cases}a > 1 &\rightarrow \text{positive}\\ a = 1 &\rightarrow \text{zero}\\ a < 1 &\rightarrow \text{negative}\end{cases}

This has the same sign as \( (a -1) \)

Sketching a Function

f^\prime(x) = 12(2 - x - 2x^2 + x^3) = 12(x+1)(x-1)(x-2)

What are the critical points of this function?

-1

How could you go about sketching this function?

Before next class

Be sure to fill out the section time preference form.

Read the lecture notes for lecture 2 and take the quiz!

Optional: do some Khan Academy exercises