Peter J Wilcoxen > PAI 300 Economics for Policy Analysis

Course Outline

Here's the preliminary list of the topics to be covered this semester. It's organized into broad categories and we may skip around between sections during the semester: see the Materials from Class page for details on upcoming topics. Topics that are links have optional exercises, additional information or both. The list may be revised or expanded during the semester (especially with the addition of more exercises), so it's a good idea to check back from time to time.

Where applicable, the relevant sections of the optional Perloff text are indicated (on the linked page if the topic is a link).  The 4th and 5th editions of Perloff use almost identical section numbers but some section numbers are different in the 6th through 8th editions.  If section numbers are different, the applicable editions are shown as 4e through 8e.  The main difference between editions are the examples: newer editions use more recent examples. 

General Information

Online tools and math references.

Markets and Policies

Core economic concepts and the basic structure and functioning of markets.


Production and costs; marginal and average costs and revenue; objectives and constraints of organizations, including profits, revenue and output.

  • Production Functions
  • Fixed and Variable Factors: Perloff 6.2-6.3
  • Isoquants: Perloff 6.4
  • Returns to Scale: Perloff 6.5
  • Cost Minimization
  • Average and Marginal Costs: Perloff 7.2
  • Fixed, Variable and Sunk Costs: Perloff 7.2
  • Short Run and Long Run Costs: Perloff 7.2 and 7.3
  • Average and Marginal Revenue: Perloff 8.2
  • Price Taking: Perloff 8.1
  • Profit Maximization
  • Output Maximization
  • Monopoly Behavior
  • Competitive Supply in the Short Run: Perloff 8.2 and 8.3
  • Entry and Exit of Firms in the Long Run: Perloff 8.4

Cost Benefit Analysis

Analysis of long term decisions and decisions under uncertainty.

  • Present Value (PV)
  • Bonds
  • Total Cost of Ownership (TCO)
  • Uncertainty: Perloff 17.1-17.4
  • Decision Trees
  • Expected Value
  • Value of Information
  • Fair Insurance
  • Option Value
  • Valuing Changes in Risks

Public Goods

Performance of competitive markets; potential problems and market failures.

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Peter J Wilcoxen, The Maxwell School, Syracuse University
Revised 08/29/2023