School of Management

The University of Texas at Dallas








Start/End Date:


TR 5:30 p.m. - 6:45 p.m.  SOM1.117

Peter Lewin SOM 3.223

Home Page:        

Fall 2007

August 16 – November 29, 2007



| Course Information | Instructor Information | Student Evaluation | Course Schedule  | Guide to Reading | University Policies Relevant to Students


| Click here for PowerPoint slides |


| Click here for Past Tests |  



Course Information


  1. Course Description


A multitude of regulations affect our lives. - We examine government regulation of different types and at different levels. The regulatory environment is a strange mix of decreasing regulation (deregulation) and increasing regulation (for example, as governments and legal structures evolve mechanisms for dealing with new technological environments, like cable TV or cellular phones).


The framework of analysis will be basic economic theory.  We will use ideas from organizational behavior, strategic management and related fields as well. 


Attendance in class is very strongly encouraged.  The tests will reflect class material as well as the texts.


Catalogue Description.

BA 4309 Regulation of Business (3 semester hours) Examines the broad subject of government regulation of business, and focuses on the source of the demand for government regulation, its translation into legislation, its administration, and its impact. Emphasis is placed on high impact regulatory programs, such as antitrust, health, safety, and environmental laws.


  1. Prerequisites: ECO 2302 or equivalent.


  1. Learning objectives


Minimum General Learning Outcomes  - the ability to

·         Use economic reasoning to analyze the effects and causes of regulation, the importance of free trade, the effects of taxes and subsidies, and the workings of the market system in determining earnings.

·         Identify and define the concepts economic efficiency, consumer and producer surplus, property rights, rent seeking

·         Use economic reasoning to critically analyze monopoly and anti-monopoly policy.

·         Critically analyze regulatory policies to deal with the environment.


I would like students to take away from this course at least the following:


1).     An appreciation of the power of economic reasoning for understanding the effects and causes of regulation

2).    A facility for critically analyzing current regulatory issues

3).     An understanding of the concepts of

¨       economic efficiency – consumer and producer surplus

¨       costs and benefits and their multiple applications

4).    An appreciation of the

¨       importance of property rights for the achievement of freedom

¨       the importance of economic freedom for the achievement of free and open societies

¨       the economic-political process

¨       the dangers of regulatory rent seeking

¨       the importance of free trade

¨       the limits of regulation

¨       the effects of taxes and subsidies of different types

¨       the workings of the market system in determining earnings (interest, profits, wages, salaries and rents)

¨       the modern business firm, its function and its boundaries

¨       the achievements of the American economic system.


  1. Course Materials


The following texts will serve as a guide to our class discussions and are required.


¨       The Economics of Public Issues by Roger Leroy Miller et. al., Fifteenth edition,  Addison Wesley, 2007. ISBN-10 # 0-321476-42-5 (ISBN-13 # 9780321476425)

¨       Antitrust, The Case for Repeal by Dominick T. Armentano, Third (or second) Edition, The Ludwig von Mises Institute, 2007. ISBN-10# 0-945466-25-0 (ISBN-13 # 9780945466253)

¨       Capitalism and Freedom by Milton Friedman, Paperback - (Any edition will do) 2nd edition (February 1963) University of Chicago Press; ISBN: # 0-226-264-01-7

¨       Give Me a Break by John Stossel  Harper Collins or Perennial Currents, 2004/5. ISBN:# 0060529156 or # 0060529148

¨       Note also Stossel’s new book which I highly recommend for enjoyable and informative, albeit alarming, reading: Myths, Lies, and Downright Stupidity: Get Out the Shovel--Why Everything You Know is Wrong (Hyperion, 2006) ISBN: #1401302548.


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  1. Here are some links with additional information


  1. to articles relevant to our discussion of monopoly and anti-trust.

·                                                      Editorial from the Wall Street Journal, January 24, 2001 – on California and its problems.

·                                                      Notes on monopoly (mine).

·                                                      Barriers to entry by D. T. Armentano

·      Dismal Science Fictions: Network Effect, Microsoft, and Antitrust Speculation by Stan Liebowitz and Steve Margolis.

·                                                      Articles by Armentano and others in the Freeman on Antitrust – worth reading!


  1. to articles relevant to School Choice

·                                                      The Milton and rose Friedman foundation on educational choice

·                                                      Milton Friedman editorial on Vouchers in the WSJ 06/09/2005

·                                                      School Choice in Washington DC


  1. to other stuff in general.

·                                                      Armen Alchian on Property Rights

·                                                      Russel Roberts on the FDA

·                                                      Hernando de Soto on Capitalism and Poverty

·                                                      Read John Stossel on his book “Give me a Break”

·                                                      Listen to  John Stossel on his book “Give me a Break”

·                                                      Milton Friedman on the power of ideas

·                                                      Cato conference on educational choice (2003)

·                                                      The Coming Doctor Shortage!!

·                                                      John Goodman on Health Care 

·                                                      Richard Epstein on Takings

·                                                      Linda Chavez on Comparable Worth

·                                                      How does regulation affect women in the labor market?

·                                                      Our Population is now 300 Million !!

·                                                      The FDA and the approval of pain medications (2007)

·                                                      The Terrible Unintended Consequences of the Drug War

·                                                      Health Care Costs in 2007

·                                                      A devastating critique of affirmative action admissions to law school

·                                                      Don’t get a brain tumor in Canada


  1. to the Environment

·                                                      To Drill or Not to Drill: Let the Environmentalists Decide

·                                                      The Environment and Policy Priorities (Bjorn Lomborg)

·                                                      Editorial on Global Warming and Alarmism (2006) – must read !!

·                                                      Maybe it is true. What then?


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Instructor Information


1.      Instructor brief biography


I was born and grew up in Johannesburg, South Africa. I received a BA (honors) degree in Economics and History from the University of the Witwatersrand in Johannesburg in 1969. In September 1972, after teaching at the business school at that University, I left to study at the University of Chicago. I received a Ph.D. in Economics from the University of Chicago in 1979. I was fortunate to have as teachers at least four Nobel prize winners. In January 1979 I moved with my family to Dallas, where we have lived ever since. After seven years as an academic, I tried my hand in an entrepreneurial venture and joined a friend in a startup business called Soft Warehouse. Today it is called CompUSA. I was one of its founding shareholders. It was a difficult but very educational experience. In 1992 I decided to return to academics and have been with the UTD School of Management since 1997. I love my job. I have a passion for teaching and for economics.


My wife and I were married in December 1969. We have four children and three grandchildren. 


To see more about my professional and personal life visit my website at


2.      Contact information



Phone: 972-883-2729
Office:  SOM 3.223.

You can contact me anytime by phone or email, and see me by appointment in my office. My preferred mode of contact is email.


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Student Evaluation


There will be three tests, two online midterms and one on-campus final.


The mid-terms test will count 25% and the final will count 50%. The tests will be composed of  multiple choice questions. Past tests (and some online self-tests) will provide examples as we go along for you to practice.


Test 1

25 questions

Online available 09/14, 12: 00 a.m. - 09/16 - 11:55 p.m; 1 hour time limit 

Test 2

25 questions

Online available 10/19, 12: 00 a.m. - 10/21 - 11:55 p.m; 1 hour time limit


50 questions

Final Test– on campus – 11/29; 2 hour time limit.


The midterms are NOT comprehensive. In the final 25 (of the 50) questions will be comprehensive.


Online Testing

You can access tests by clicking the "Tests" link on the course menu and then clicking the available test title links. Each test is timed and can only be accessed once within the scheduled time window. Please read the on-screen instructions carefully before you start the test. You may review your test results after the test results are released.


Course Outline


The table below outlines the reading assignments for each class A guide to the reading assignments follows below that.









Basic concepts, tradeoffs, theories of regulation


Crime and prohibition, price fixing


Crime and prohibition, price fixing


Crime and prohibition, price fixing


Crime and prohibition, price fixing


Crime and prohibition, price fixing


Miscellaneous topics - slavery, water rights, smuggling


Miscellaneous topics - slavery, water rights, smuggling




Test 1 online (Available 09/14 - 09/16)




Anti-trust (monopoly, natural monopoly, policy, Microsoft).


Anti-trust (monopoly, natural monopoly, policy, Microsoft).


Anti-trust (monopoly, natural monopoly, policy, Microsoft)


Anti-trust (monopoly, natural monopoly, policy, Microsoft)


Public Education - a state monopoly, Health Care, Medicare and Social Security


Public Education - a state monopoly, Health Care, Medicare and Social Security


Health Care, Medicare and Social Security


Health Care, Medicare and Social Security


Health Care, Medicare and Social Security


Health Care, Medicare and Social Security


Test 2 online (Available 10/19 - 10/21)




Regulation of Labor


Regulation of Labor


Regulation of Labor


Regulation of Labor


The Environment


The Environment


The Environment


The Environment




Thanksgiving Day - No class






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Guide to Reading




M. is Miller,

A. is Armentano

F. is Friedman

S. is Stossel

The numbers refer to the chapters.

Basic concepts, tradeoffs, theories of regulation

F. Preface;1,2 

M 1,3,4;

S. Introduction, 1 - 7,11,12, 13, 15

Crime and prohibition, price fixing

M. 5, 6, 10, 12, 13,

S. 8, 14, 23

Miscellaneous topics - abortion, slavery, water rights, smuggling, agricultural policy

M. 7 – 9, 14

Anti-trust, Free Trade

A. 1 – 7

F. 8

M. 16  - 20, 30 – 32

Public Education - a state monopoly

F. 6, 7 Video, Elder or Stossel

Health Care, Medicare and Social Security

M. 15,  24

F. 9 – 12

Regulation of Labor

F. 9

M. 11

The Environment

M, 2, 21, 22, 25  - 29

S. 10


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University Policies Relevant to Students


Student Conduct & Discipline


The University of Texas System and The University of Texas at Dallas have rules and regulations for the orderly and efficient conduct of their business.  It is the responsibility of each student and each student organization to be knowledgeable about the rules and regulations which govern student conduct and activities.  General information on student conduct and discipline is contained in the UTD publication, A to Z Guide, which is provided to all registered students each academic year.


The University of Texas at Dallas administers student discipline within the procedures of recognized and established due process.  Procedures are defined and described in the Rules and Regulations, Board of Regents, The University of Texas System, Part 1, Chapter VI, Section 3, and in Title V, Rules on Student Services and Activities of the university’s Handbook of Operating Procedures.  Copies of these rules and regulations are available to students in the Office of the Dean of Students, where staff members are available to assist students in interpreting the rules and regulations (SU 1.602, 972/883-6391).


A student at the university neither loses the rights nor escapes the responsibilities of citizenship.  He or she is expected to obey federal, state, and local laws as well as the Regents’ Rules, university regulations, and administrative rules.  Students are subject to discipline for violating the standards of conduct whether such conduct takes place on or off campus, or whether civil or criminal penalties are also imposed for such conduct.


Academic Integrity and Scholastic Dishonesty


The faculty expects from its students a high level of responsibility and academic honesty.  Because the value of an academic degree depends upon the absolute integrity of the work done by the student for that degree, it is imperative that a student demonstrate a high standard of individual honor in his or her scholastic work.


The University of Texas at Dallas has policies and discipline procedures regarding scholastic dishonesty. Detailed information is available on the Scholastic Dishonesty web page. All students are expected to maintain a high level of responsibility with respect to academic honesty. Students who violate University rules on scholastic dishonesty are subject to disciplinary penalties, including the possibility of failure in the course and/or dismissal from the University. Since such dishonesty harms the individual, all students and the integrity of the University, policies on scholastic dishonesty will be strictly enforced.


Scholastic dishonesty includes, but is not limited to, statements, acts or omissions related to applications for enrollment or the award of a degree, and/or the submission as one’s own work or material that is not one’s own.  As a general rule, scholastic dishonesty involves one of the following acts:  cheating, plagiarism, collusion and/or falsifying academic records.  Students suspected of academic dishonesty are subject to disciplinary proceedings.


Plagiarism, especially from the web, from portions of papers for other classes, and from any other source is unacceptable and will be dealt with under the university’s policy on plagiarism (see general catalog for details).  This course will use the resources of, which searches the web for possible plagiarism and is over 90% effective.


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Email Use

The University of Texas at Dallas recognizes the value and efficiency of communication between faculty/staff and students through electronic mail. At the same time, email raises some issues concerning security and the identity of each individual in an email exchange.  The university encourages all official student email correspondence be sent only to a student’s U.T. Dallas email address and that faculty and staff consider email from students official only if it originates from a UTD student account. This allows the university to maintain a high degree of confidence in the identity of all individual corresponding and the security of the transmitted information.  UTD furnishes each student with a free email account that is to be used in all communication with university personnel. The Department of Information Resources at U.T. Dallas provides a method for students to have their U.T. Dallas mail forwarded to other accounts.

Withdrawal from Class

The administration of this institution has set deadlines for withdrawal of any college-level courses. These dates and times are published in that semester's course catalog. Administration procedures must be followed. It is the student's responsibility to handle withdrawal requirements from any class. In other words, I cannot drop or withdraw any student. You must do the proper paperwork to ensure that you will not receive a final grade of "F" in a course if you choose not to attend the class once you are enrolled.


Student Grievance Procedures


Procedures for student grievances are found in Title V, Rules on Student Services and Activities, of the university’s Handbook of Operating Procedures.


In attempting to resolve any student grievance regarding grades, evaluations, or other fulfillments of academic responsibility, it is the obligation of the student first to make a serious effort to resolve the matter with the instructor, supervisor, administrator, or committee with whom the grievance originates (hereafter called “the respondent”).  Individual faculty members retain primary responsibility for assigning grades and evaluations.  If the matter cannot be resolved at that level, the grievance must be submitted in writing to the respondent with a copy of the respondent’s School Dean.  If the matter is not resolved by the written response provided by the respondent, the student may submit a written appeal to the School Dean.  If the grievance is not resolved by the School Dean’s decision, the student may make a written appeal to the Dean of Graduate or Undergraduate Education, and the deal will appoint and convene an Academic Appeals Panel.  The decision of the Academic Appeals Panel is final.  The results of the academic appeals process will be distributed to all involved parties.


Copies of these rules and regulations are available to students in the Office of the Dean of Students, where staff members are available to assist students in interpreting the rules and regulations.


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Incomplete Grade Policy


As per university policy, incomplete grades will be granted only for work unavoidably missed at the semester’s end and only if 70% of the course work has been completed.  An incomplete grade must be resolved within eight (8) weeks from the first day of the subsequent long semester.  If the required work to complete the course and to remove the incomplete grade is not submitted by the specified deadline, the incomplete grade is changed automatically to a grade of F.


Disability Services


The goal of Disability Services is to provide students with disabilities educational opportunities equal to those of their non-disabled peers.  Disability Services is located in room 1.610 in the Student Union.  Office hours are Monday and Thursday, 8:30 a.m. to 6:30 p.m.; Tuesday and Wednesday, 8:30 a.m. to 7:30 p.m.; and Friday, 8:30 a.m. to 5:30 p.m.


The contact information for the Office of Disability Services is:

The University of Texas at Dallas, SU 22

PO Box 830688

Richardson, Texas 75083-0688

(972) 883-2098 (voice or TTY)


Essentially, the law requires that colleges and universities make those reasonable adjustments necessary to eliminate discrimination on the basis of disability.  For example, it may be necessary to remove classroom prohibitions against tape recorders or animals (in the case of dog guides) for students who are blind.  Occasionally an assignment requirement may be substituted (for example, a research paper versus an oral presentation for a student who is hearing impaired).  Classes enrolled students with mobility impairments may have to be rescheduled in accessible facilities.  The college or university may need to provide special services such as registration, note-taking, or mobility assistance.


It is the student’s responsibility to notify his or her professors of the need for such an accommodation.  Disability Services provides students with letters to present to faculty members to verify that the student has a disability and needs accommodations.  Individuals requiring special accommodation should contact the professor after class or during office hours.


Religious Holy Days

The University of Texas at Dallas will excuse a student from class or other required activities for the travel to and observance of a religious holy day for a religion whose places of worship are exempt from property tax under Section 11.20, Tax Code, Texas Code Annotated.

The student is encouraged to notify the instructor or activity sponsor as soon as possible regarding the absence, preferably in advance of the assignment.  The student, so excused, will be allowed to take the exam or complete the assignment within a reasonable time after the absence: a period equal to the length of the absence, up to a maximum of one week. A student who notifies the instructor and completes any missed exam or assignment may not be penalized for the absence. A student who fails to complete the exam or assignment within the prescribed period may receive a failing grade for that exam or assignment.

If a student or an instructor disagrees about the nature of the absence [i.e., for the purpose of observing a religious holy day] or if there is similar disagreement about whether the student has been given a reasonable time to complete any missed assignments or examinations, either the student or the instructor may request a ruling from the chief executive officer of the institution, or his or her designee. The chief executive officer or designee must take into account the legislative intent of TEC 51.911(b), and the student and instructor will abide by the decision of the chief executive officer or designee.


These descriptions and timelines are subject to change at the discretion of the Professor.

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