YORK UNIVERSITY

Department of Economics
ECON3810M: Winter, 2013
Economics of Project Appraisal and Feasibility
CLH-J: Wednesday, 7:00 10:00 PM
Kieran Furlong: kieran@yorku.ca
Office (VH1057)Hours: Monday/Wednesday 1:30 2:20 PM
TEXTBOOK: This course takes a cost/benefit approach to project analysis, which means that
we stress calculation of benefits from as well as costs of projects. There is no simple textbook
covering the material for this course because most project analysis textbooks cover only cost
decisions. I will provide a package of notes and sample exams at cost in the classroom.
Intermediate Microeconomics textbooks cover most of the material, however. I will give
page references for Hal Varian, Intermediate Economics (1990) but any will do. A first year math
textbook such as Mathematics for Economic Analysis, Knut Sydsaeter and Peter Hammond
(1995) helps with Linear Programming. Principles of Cost-Benefit Analysis in a Canadian
Context by Peter G.C. Townley (1998) has a basic analysis of much of the material. Cost-Benefit
Analysis by E.J. Mishan (1976) gives some basic ideas and Cost-Benefit Analysis by Richard
Layard and Stephen Glaister (1994) gives more sophisticated mathematical analysis.
EVALUTION:

1 Page Class Presentation

Seminar Participation
Midterm Exam (February 27)
Final Exam)

8%
7%
30%
55%

Calculation/diagrammatic questions comprise 80% of each exam with multiple choice or

explanations comprising the remaining 20% of the exam.
There is no make-up exam for the midterm; students who provide written proof of a
legitimate absence such as medical reasons will have their final exam worth 100%. Students who
miss the final exam must petition the administration to write a deferred exam. Since petitions take
time to approve, the deferred exam will not occur before August..
Presentation marks are given for a 1 page presentation (12 point, double-spaced and normal
margins, given to me before the presentation) on designated pages from an author during one
seminar period for a potential 8 marks and the right to get a participation mark for a comment
or question per discussion period up to a maximum of 7 participation marks. You must give a
presentation to qualify for participation marks. Students will sign up for their presentation day in
the second week of class and presentations and discussion occur during from 7:00 to 8:00PM
from the third week to the last week of class . If you miss your presentation, you must provide
documentation of a legitimate reason, submit your original presentation, and do a replacement
presentation that I will assign.

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ECON3810M: Winter, 2013

LECTURE AND READING SCHEDULE
9

Introduction and Overview.

January

16

Welfare Foundations of Cost-Benefit. Varian, 20-25, 33-38, 48-51, 476-83

January

23

Benefits: Consumer and Producer Surplus and Rent. Varian, 240-255

January

30

Costs, Marginal Costs: Varian, 298-317, 328-33

February

February

13

Costs, Linear Programming: Diagrammatic. Sydsaeter, 704-728

February

27

Midterm Exam. 7:00 9:00PM

Costs, Isocosts/Isoquants: Varian, 343-55

March

Costs, Linear Programming: Simplex Method. Sydsaeter 704-728

March

13

Shadow Prices. Sydsaeter, 675-78

March

20

Investment Criteria: Rates of Return and Discount Rates, Varian, 187-99;

March

27

Risk: Expected Value and Utility. Varian, 208-226

April

Risk: Measuring Risk. Varian (continued)

Prerequisites are strictly checked and enforced and must be completed before taking a course. By
taking this course you acknowledge that you will be removed from the course at anytime if you
do no meet all requirements set by the Department of Economics. For further information you can
consult the Undergraduate Academic Handbook, which is found in the Economics Department
Office, Kaneff Center Room 121. It can also be found in the 2007-2008 Courses Calendar, which
is available from the Registrars Office.
Students should note that copying, plagiarizing, or other forms of academic misconduct will not
be tolerated. Any student caught engaging in such activities will be subject to academic discipline
ranging from a mark of zero on the assignment, test or examination to dismissal from the
university as outlined in the academic handbook. Any student abetting or otherwise assisting in
such misconduct will also be subject to academic penalties.
Students agree that by taking this course all required papers may be subject to submission for
textual similarity review to Turnitin.com for the detection of plagiarism. All submitted papers will
be included as source documents in the Turnitin.com reference database solely for the purpose of
detecting plagiarism of such papers. The terms that apply to the University's use of the
Turnitin.com service are described on the Turnitin.com web site.

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