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About this Course  Nine problem sets

14.01 Principles of Microeconomics is an introductory undergraduate  Two midterm exams
course that teaches the fundamentals of microeconomics. At MIT, this  Final Exam
is the first course that undergraduates take in economics. For some, it Assigned Readings
may be the only course they take in the subject, and it provides a solid Readings are assigned for each lecture, and should be completed prior
foundation for economic analysis and thinking that can last throughout to watching the lecture videos and completing subsequent activities.
their education and subsequent professional careers. For other TEXTBOOK DESCRIPTION
students, it may provide a foundation for many years of study in This is the official textbook used
economics, business, or related fields. [Perloff] = Perloff, by students enrolled in the class at
This course begins with an introduction to supply and demand and the Jeffrey M. Microeconomics. 5th MIT. While OCW cannot provide
basic forces that determine an equilibrium in a market economy. Next, ed. Addison Wesley, 2008. ISBN: online access to this book, we
it introduces a framework for learning about consumer behavior and 9780321558497. provide "For Further Study" links
analyzing consumer decisions. We then turn our attention to firms and to supplemental materials.
their decisions about optimal production, and the impact of different
market structures on firms' behavior. The final section of the course [R&T] = Rittenberg, Libby, and
provides an introduction to some of the more advanced topics that can Timothy Tregarthen. Principles of This Creative Commons-licensed
be analyzed using microeconomic theory. These include international Microeconomics (PDF - 15.1MB). text is a free online alternative to
trade, the impact of uncertainty on consumer behavior, the operation 2009. (Courtesy of Libby Perloff text used in the class at
of capital markets, equity vs. efficiency trade-offs in economic policy Rittenberg, Timothy Tregarthen, MIT.
and social insurance. and the Saylor Foundation.)
By the end of the course, you will be able to understand introductory Recitations
microeconomic theory, solve basic microeconomic problems, and use In Recitations, students meet with a Teaching Assistant in a smaller
these techniques to think about a number of policy questions relevant group to go over problem set and exam solutions, review key
to the operation of the real economy. concepts, and occasionally learn new material. A selection of
recitation notes is included throughout this course and highlights some
Prerequisites and Preparation of the key teachings of 14.01.
This course will include some basic uni-variate calculus material, as
taught in the MIT course 18.01 Single Variable Calculus or in a Deliverables and Grading
comparable high-school calculus course. There are no other There will be nine mandatory problem sets which will be individually
prerequisites. graded. At the end of the term students will have the best eight
Visit 18.01SC Single Variable Calculus to learn or review this homework grades cumulated up and this will count for 22% of the
material. final course grade.
There will be two midterm exams held throughout the term. These
Course Goals will each cover roughly one -third of the course material, will be 2
After completing this course, students should have developed a range
hours long, and will count as 22% (collectively 44%) of the grade.
of skills enabling them to understand economic concepts and use those
There will also be a three hour final, which will be cumulative and
concepts to analyze specific questions.
cover all of the course materials. This will count as the remaining 34%
By the end of this course, students should be able to:
of the grade.
 Understand consumer behavior.
 Understand firm behavior. Acknowledgements
 Analyze different types of market structures (monopoly,
oligopoly and a competitive market). 1 Supply nd demand
 Understand how to apply economic principles to a range of
policy questions. Intro to microeconomics
Students should also have the skills needed to: Economics may have a reputation as a dismal science, but in fact it
 Use supply and demand diagrams to analyze the impact of addresses some of the most fundamental problems we face: How to
overall changes in supply and demand on price and quantity. make the best decision given that resources are limited. You can use
 Solve a consumer's utility maximization problem the tools of microeconomics to decide how best to spend your
mathematically and graphically; analyze the impact of income; how best to divide your time among leisure activities; or
changes in price and income on a consumer's decision via how many people to hire in the business you run. Life is full of
shifting income and substitution effects. choices. Microeconomics can help you decide how to make them.
 Understand the consumer's labor supply decision. Economics can't help you make a selection from this box of
 Solve a firm's cost minimization problem mathematically and chocolates, but can be a vital tool in other decision-making
graphically. situations. Image courtesy of ninanord on Flickr.
 Analyze the behavior of firms in a perfectly competitive Keywords: Microeconomics; prices; normative economics; positive
market in the short-run and the long-run. economics; microeconomic applications.
 Calculate producer and consumer surplus.
 Analyze the behavior of firms in a monopoly or oligopoly,
Session Activities
and calculate the resulting changes in producer or consumer Readings
surplus. Before watching the lecture video, read the course textbook for an
introduction to the material covered in this session:
 Understand consumer behavior under uncertainty.
 [R&T] Chapter 1, "Economics: The Study of Choice."
 Use economic tools to analyze economic policies.
 [Perloff] Chapter 1, "Introduction." (optional)
Course Components and Requirements Lecture Videos
 Assigned readings  View Full Video
 Recitations o Lecture 1: Introduction to Microeconomics
 Lectures (00:34:14)

Interactive Supply Curve – Shifting the Curve shift. 1. Studying how individuals and firms make themselves Study Materials See the course website for Econ 302. View by Chapter Keywords: Elasticity.US o Government Intervention: Water Shortages o Subtitle ." (optional) of seeing your favorite snack go on sale! When the price of a good Lecture Videos changes.US) (0:08:28) View by Chapter Resources o What is Microeconomics? (0:08:15)  Graphs and Figures (PDF) o The Role of Prices: Examples (0:04:44) Check Yourself o Important Distinctions in Economics (0:04:02) o Positive vs.com tutorial Session Activities Equilibrium Curve – Shifting the College.com tutorial Keywords: Supply and demand. Further Study These optional resources are provided for students that wish to explore 3. more 2. you CONTENT PROVIDER NOTES are participating in a market for that good. Economics: Price Ceiling Cram. something you've been longing to buy increasing – or the excitement  [Perloff] Chapter 2. this topic more fully. empirical economics. supply elasticity. "Demand and Supply.com  Recitation: Supply-Demand Analysis (PDF) Government Intervention and College- Before watching the lecture video. 4. All of these. "Applications of Demand and Supply. The presence or absence of substitute goods. "Supply and Demand. Interactive Demand Curve – Shifting the Curve equilibrium. 4. taught at Penn State in 2011.com introduction to the material covered in this session:  [R&T] Chapter 3. The intersection of the supply and the demand curve. government interference. Question 1 of 5 Complete this quiz before moving on to the next session to make sure What determines the price and quantity of a good in a perfectly you understand the concepts required to solve the mathematical and competitive market? graphical problems that are the basis of this course. The position of the demand curve. Intermediate Microeconomics as well off as possible given conditions of scarcity. "Applying the Supply-and-Demand (0:12:39) Model. Interactive Readings Curve Cram. Demand Curve – Moving Along the College. consumers' demand for that good changes. Interactive and some people—you!—demand it. Supply nd demand Additional Resources You may not realize it." (optional) . Cram. Interactive of Aaron Tyo-Dikerson on Flickr.PDF English . Image courtesy of Nic o Subtitle . we will examine Curve Cram.2. read the course textbook for an Economics: Price Floor Cram. In this lecture. This concept quiz covers key vocabulary terms and also tests your intuitive understanding of the material covered in this session. equilibrium.com tutorial Government intervention can impact gasoline prices. demand oOverview of Supply and Demand (0:04:16) elasticity. read the course textbook for an (0:08:26) introduction to the material covered in this session: o Government Interference: Gasoline Prices (0:04:57)  [R&T] Chapter 5. A set of constrained optimization problems. Which of the following is an accurate description of the primary theme of microeconomics? 3. Normative Analysis of the eBay Kidney Concept Quiz Auction (0:10:39) This concept quiz covers key vocabulary terms and also tests your intuitive understanding of the material covered in this session.PDF English ." Everyone knows the unpleasant feeling that results from the price of Sections 4. Curve Cram. Analyzing tradeoffs. The government. We can  View Full Video understand these changes by graphing supply and demand curves and o Lecture 2: Applying Supply and Demand (00:49:07) analyzing their properties.SRT (English . o Transcript .1-4." elasticityession Overview  [R&T] Chapter 4. but every time you purchase something. o Transcript . demand shift.US Toilet paper is an example of an elastic good. o Everyday Applications of Economics (0:06:30) Complete this quiz before moving on to the next session to make sure Check Yourself you understand the concepts required to solve the mathematical and Concept Quiz graphical problems that are the basis of this course.com tutorial how to analyze supply and demand curves and the impact changes in market conditions and government policy can have on market College. revenue. which cover new content that adds to and Government Intervention and College- supplements the material covered in lecture." o Costs and Benefits of Government Intervention  [Perloff] Chapter 3. supply College. Some people supply it. Image courtesy Supply Curve – Moving Along the College.com tutorial Read the recitation notes.SRT (English . 1.US) Stage on Flickr. Question 1 of 5 2. "Elasticity: A Measure of Response. Cram. o Impact of a Demand Shift (0:07:15) Session Activities o Impact of a Supply Shift (0:02:58) Readings o Government Interference: The Labor Market Before watching the lecture video.

The teaching o Properties of Indifference Curves (0:10:26) assistant notes common mistakes made by students and provides o Utility Functions (0:03:15) o Marginal Utility (0:04:18) . by what they want! All consumers See the [Perloff] chapter for the topics covered. indifference College. Price Elasticity of Supply Cram. and 7.US) Concept Quiz View by Chapter This concept quiz covers key vocabulary terms and also tests your o Part A (0:07:35) intuitive understanding of the material covered in this session. as well as quizzes.SRT (English .US  Problem Set Questions (PDF) o Subtitle . utility functions. CONTENT PROVIDER NOTES Keywords: Consumer theory. Further Study Prefernces nd utility These optional resources are provided for students that wish to explore Behind every supply and demand curve is an army of producers and this topic more fully.SRT (English . "Consumer Choice. Make sure you  [R&T] Chapter 7. preference assumptions. their Textbook Study Materials decisions are driven.US Check Yourself o Subtitle .PDF English .US View by Chapter o Subtitle .US)  Problem Set Solutions (PDF) View by Chapter Problem Solving Video o Introduction to Consumer Theory (0:04:39) In the video below. The demand curve is vertical but does not change shape the evolution of the overall economy. and use this utility function to make predictions about what consumers will do when they 3. In this lecture.com tutorial Read the recitation notes. Question 1 of 5 2 Consumer th Which of the following accurately characterize perfectly inelastic The second unit of the course introduces you to the analysis of demand? consumer behavior. 7. and we can analyze these regardless of what happens to price. The decisions that individuals make about what and how much to consume are among the most important factors that 1.com tutorial Session Activities Price Elasticity of Demand – College.3. The demand curve is vertical. For consumers. quite simply. more individuals choose to work. You will learn how 2. how to define it and how we represent it  Chapter 3 mathematically. following sessions before attempting the problem set:  [Perloff] Chapter 4.SRT (English . o Part B (0:07:38) Complete this quiz before moving on to the next session to make sure you understand the concepts required to solve the mathematical and graphical problems that are the basis of this course.US) o The Elasticity of Supply and Demand (0:15:02) View by Chapter o Using Empirical Economics to Determine Elasticity o Part A (0:03:51) (0:10:06) o Part B (0:03:23) o Elasticity and Taxation (0:11:09) o Part C (0:03:17) o Elasticity and Medical Care (0:11:37) o Part D (0:04:46) Resources  View Full Video  Graphs and Figures (PDF) o Problem 4 Solution Video (00:15:15) o Transcript . Problem set  Recitation: Calculating Elasticities (PDF) Before watching the lecture video. which cover new content that adds to and supplements the material covered in lecture.2." (optional)  Introduction to Microeconomics Lecture Videos  Applying Supply and Demand  View Full Video  Elasticity o Lecture 4: Preferences and Utility (00:48:10) Problem Set and Solutions o Transcript . o Lecture 3: Elasticity (00:47:58)  View Full Video o Transcript . How does each slice of pizza you consume impact your utility for the Other OCW and OER Content next? Image courtesy of William Jones on Flickr.1-2. make decisions to maximize their utility. Lecture Videos problem solving techniques for approaching similar questions on the  View Full Video problem set and exams. "The Analysis of Consumer Choice. Interactive curves.2. The demand curve is horizontal. a teaching assistant demonstrates his approach to o Consumer Preference Assumptions (0:04:52) the solution for problems 1 and 4 from the problem set.PDF English .PDF English .SRT (English . You will also 4. about utility. and other related resources. decisions in terms of their underlying preferences. marginal utility.US o Problem 3 Solution Video (00:15:20) o Subtitle . consumers making their own decisions. we will learn applications. have a given income and can buy goods at a given price.PDF English .US) o Transcript .1. Demand does not change regardless of what happens to learn how to analyze the decision of whether and how much price." have mastered the concepts and problem solving techniques from the Sections 7. read the course textbook for an The problem set is comprised of challenging questions that test your introduction to the material covered in this session: understanding of the material covered in the course. Interactive Readings Standard Cram. to model consumer preferences in a utility function.

" (optional) Lecture Videos Lecture Videos  View Full Video  View Full Video o Lecture 5: Budget Constraints (00:46:14) o Lecture 5: Budget Constraints (00:46:14) o Transcript . the amount of time." Lec #3 in 14.US) View by Chapter View by Chapter o Budget Constraints and the Marginal Rate of o Budget Constraints and the Marginal Rate of Transformation (0:10:12) . as well as quizzes.  Chapter 4 3. and other related resources.03 Textbook Study Materials OpenCourseWare theoretical Microeconomic Theory and See the [Perloff] chapter for the topics covered. marginal rate of transformation. "Consumer Choice. Other OCW and OER Content 4.3. Image courtesy Our monetary income constrains our consumption.US o Subtitle . The answer would probably be more of everything! Of course. 2. o Marginal Rate of Substitution (0:15:34) Transformation (0:10:12) Resources o Shocking the Budget Constraint (0:04:47)  Graphs and Figures (PDF) o Constrained Utility Maximization: Graphical Analysis (0:06:44) Check Yourself o Constrained Utility Maximization: Mathematical Concept Quiz Derivation (0:14:16) This concept quiz covers key vocabulary terms and also tests your o Corner Solutions (0:03:03) intuitive understanding of the material covered in this session. applications.3. corner solutions. and the reason is that we are constrained in what we can choose: the reason is that we are constrained in what we can choose: constrained by the amount of income.PDF English .  Chapter 4 budget constraint Problema set 2 Life would be easy if it was just a question of deciding what we Life would be easy if it was just a question of deciding what we would like most. The slope of the budget constraint. Completeness. read the course textbook for an Before watching the lecture video. In this lecture we will analyze how one of a number of factors. "Consumer Choice.US o Transcript . Keywords: Budget constraints. Non-satiation. Downward-sloping. the amount of time. 1. as well as quizzes. Fall 2010. or any constrained by the amount of income. "The Analysis of Consumer Choice. 4. you understand the concepts required to solve the mathematical and graphical problems that are the basis of this course. or any one of a number of factors." (optional)  [Perloff] Chapter 4. Our monetary income constrains our consumption. and other related resources. approach. Transitivity. corner solutions.SRT (English . economic decisions are not that simple.johnston on Flickr. of allison. 3. The answer would probably be more of would like most.johnston on Flickr.SRT (English . The ratio of the prices of the two goods. constrained utility maximization. opportunity cost. The rate at which you can turn one good into the other Textbook Study Materials good in the marketplace. economic decisions are not that simple. consumers make choices when they face a budget constraint. Question 1 of 5 Further Study Which of the following concepts is equivalent to the marginal rate of transformation between two goods? These optional resources are provided for students that wish to explore this topic more fully. In this lecture we will analyze how consumers make choices when they face a budget constraint."  [R&T] Chapter 7. 1. MIT with an advanced Choice. See the [Perloff] chapter for the topics covered.  [Perloff] Chapter 4. constrained utility maximization. "The Analysis of Consumer Choice.  Graphs and Figures (PDF) Question 1 of 5 Check Yourself Which of the following is NOT an assumption that we make about Concept Quiz consumer preferences? This concept quiz covers key vocabulary terms and also tests your intuitive understanding of the material covered in this session. and everything! Of course.US) o Subtitle . Public Policy. applications. o Applying Constrained Utility Maximization Complete this quiz before moving on to the next session to make sure (0:07:06) you understand the concepts required to solve the mathematical and Resources graphical problems that are the basis of this course. Keywords: Budget constraints. Complete this quiz before moving on to the next session to make sure 2. CONTENT PROVIDER NOTES Further Study "Axioms of Consumer These optional resources are provided for students that wish to explore Alternative notes Preference and the Theory of this topic more fully. read the course textbook for an introduction to the material covered in this session: introduction to the material covered in this session:  [R&T] Chapter 7. None of these.PDF English . Session Activities Session Activities Readings Readings Before watching the lecture video. Image courtesy of allison. marginal rate of transformation. opportunity cost. Sections 7." Sections 7.

64 Labor Economics decision about supplying labor can be analyzed with the same tools MIT An in-depth course and Public Policy. this topic more fully. Resources Question 1 of 5  Graphs and Figures (PDF) Which of the following concepts is equivalent to the marginal rate of Check Yourself transformation between two goods? Concept Quiz 1. "Wages and Employment in Perfect  Problem Set Questions (PDF) Competition.US you understand the concepts required to solve the mathematical and o Subtitle . the solution for problem 5 from the problem set. A good where consumption falls when the price applications. and other related resources. intuitive understanding of the material covered in this session. Make sure you Session Activities have mastered the concepts and problem solving techniques from the Readings following sessions before attempting the problem set: Before watching the lecture video. Keywords: Labor supply. 4. See the [Perloff] chapter for the topics covered. A good where consumption rises when income falls. o Shocking the Budget Constraint (0:04:47) View by Chapter o Constrained Utility Maximization: Graphical o Review: Income and Substitution Effects (0:10:10) Analysis (0:06:44) o The Labor-Leisure Tradeoff (0:07:33) o Constrained Utility Maximization: Mathematical o Impact of Wage Changes on Labor-Leisure Tradeoff Derivation (0:14:16) (0:08:43) o Corner Solutions (0:03:03) o Determinants of Labor Supply: Change in o Applying Constrained Utility Maximization Consumption (0:14:15) (0:07:06) o Impact of Labor Supply on Unemployment Resources (0:09:38)  Graphs and Figures (PDF) Resources  Graphs and Figures (PDF) Check Yourself  Tables (PDF) Concept Quiz This concept quiz covers key vocabulary terms and also tests your  View Full Video intuitive understanding of the material covered in this session.  Chapter 4 4. another key decision that we make every day CONTENT PROVIDER NOTES as economic agents is how much to work and how much to relax. o Lecture 8a: Applying Consumer Theory: Child Labor (00:13:38) Complete this quiz before moving on to the next session to make sure o Transcript . The teaching  View Full Video assistant notes common mistakes made by students and provides o Lecture 7: Applying Consumer Theory: Labor problem solving techniques for approaching similar questions on the Supply (00:50:26) problem set and exams. you understand the concepts required to solve the mathematical and 3. a teaching assistant demonstrates his approach to The lecture video for this session consists of two parts. "The Analysis of Consumer Choice. The problem set is comprised of challenging questions that test your understanding of the material covered in the course. labor reparation economics. Fall used to analyze the market for pizza or movies.2. increases." Sections 7. The slope of the budget constraint. A good where consumption increases when the price increases. None of these. Giffin good. Complete this quiz before moving on to the next session to make sure 2.PDF English . analysis of the labor market. consumer theory. The ratio of the prices of the two goods. A good where consumption rises when income rises. graphical problems that are the basis of this course. 2009. 3. read the course textbook for an  Deriving Demand Curves introduction to the material covered in this session:  Applying Consumer Theory: Labor  [R&T] Chapter 7. child labor. This lecture provides an overview of the economics of the labor market.SRT (English .US) graphical problems that are the basis of this course." (optional) Problem Solving Video Lecture Videos In the video below.US  View Full Video o Subtitle .US) o Problem 5 Solution Video (00:24:34) . o Transcript .SRT (English . Textbook Study Materials 2. Question 1 of 4 Further Study What is a Giffen good? These optional resources are provided for students that wish to explore 1. The decision to nap instead of work can be analyzed by economic Problem set tools.PDF English . The rate at which you can turn one good into the other This concept quiz covers key vocabulary terms and also tests your good in the marketplace. as well as quizzes. "Applying Consumer Theory. Apling consumer th Other OCW and OER Content Along with what to buy."  Problem Set Solutions (PDF)  [Perloff] Chapter 5. and we call this the OpenCourseWare on labor economics. leisure. The 14. Problem Set and Solutions  [R&T] Chapter 12. Image courtesy of Joi Ito on Flickr.

US Library of Congress. or producer. Fall 2007. o Productivity (0:15:27) marginal rate of technical substitution. firm production functions. costs. "Firms and Production." (optional) companies make important operation decisions. they incur costs that vary depending on  Midterm 1 Solutions (PDF) how much they are producing.PDF English . and that is true for firms as well as consumers. needed to successfully complete the exam problems. read the course textbook for an Concept Quiz introduction to the material covered in this session: This concept quiz covers key vocabulary terms and also tests your  [R&T] Chapter 8. consumers gain utility from buying goods— Before watching the lecture video. o Subtitle . and are used with permission. Maximizing utility. . marginal costs.  Midterm 1 Problems (PDF) When firms produce goods. Everything has a cost. Productivity nd costs other aids.US  [Perloff] Chapter 6. 1.01 Principles of Microeconomics. The summary notes below are concise outlines of the main Concept Quiz points covered in each session. mathematical and graphical o Returns to Scale (0:07:52) understanding of the material covered in this portion of the course.US) Lecture Videos View by Chapter  View Full Video o Part A (0:03:41) o Lecture 8: Introduction to Producer Theory o Part B (0:03:34) (00:37:21) o Part C.US) Keywords: Production theory.SRT (English . These exams are from Professor William What is the primary objective of firms? Wheaton's course site. Minimizing costs. which cover new content that adds to and Resources supplements the material covered in lecture.US) o Part G (0:08:27) View by Chapter Midterm o Firm Production Functions (0:11:18) reparation o Short Run Production and Diminishing Marginal Midterm exam 1 covers material from the beginning of the course: Product (0:07:04)  Unit 1: Supply and Demand o Long Run Production and the Marginal Rate of  Unit 2: Consumer Theory Technical Substitution (0:11:03) The exam tests your conceptual. "Production and Cost. Resources  Graphs and Figures (PDF) Content Review Please review the content from the units covered before attempting the Check Yourself exam.  Practice Midterm 1 Solutions (PDF) Exam Problems and Solutions 3. You are not allowed to use notes. Image courtesy of economic players." (optional) o Subtitle . The exam should be completed in 2 hours. another key set of Building factory infrastructure is a producer cost. "Costs. we will learn how  [Perloff] Chapter 7. Once you are comfortable with the course content. Maximizing profit. Lecture Videos When considering firm production decisions. and analyzing the decisions of firms is also central to our  [R&T] Chapter 8. This is a closed book 4. In addition. This unit introduces you to the study of firm.US o Part F (0:04:15) o Subtitle . 14.  Practice Midterm 1 Problems (PDF) 2." understanding of the economy. "Production and Cost. we must consider the  View Full Video two forms of firm input – labor and capital. variable View by Chapter inputs. Session Activities Introduction Readings As we've already learned.SRT (English . Complete this quiz before moving on to the next session to make sure  Midterm 1 Summary Notes (PDF) you understand the concepts required to solve the mathematical and Practice Exams graphical problems that are the basis of this course. we will analyze firms' Producer th cost functions. read the course textbook for an but every good has to come from somewhere! Goods are produced by introduction to the material covered in this session: firms. food production. exam. long run production. behavior. he goods purchased by consumers are produced by firms. equation sheets. In this lecture.  Graphs and Figures (PDF)  Recitation: Demand Function (PDF) Check Yourself Before watching the lecture video. short run costs. This image is a work of o Lecture 9: Production Theory (00:47:30) the US Federal Government and in the public domain. costs." intuitive understanding of the material covered in this session. AndreasPraefcke on Wikipedia. In this lecture. complete the Question 1 of 4 following practice exams. returns to scale. o Introduction to Costs and Short Run Costs (0:08:45) Session Activities o Long Run Costs (0:15:10) Readings o Long Run Expansion Path (0:04:03) Read the recitation notes. you will begin to learn how firms interact in a run costs. o Transcript . competitive market in the short-run and the long-run. short run production. You will learn how to analyze firms' decisions mathematically using Keywords: Productivity. but are presented only as a study aid in This concept quiz covers key vocabulary terms and also tests your reviewing for the exam. Maximizing revenue. and profits.PDF English . Source: o Transcript . long a production function and calculate their optimal level of production. D & E (0:04:33) o Transcript .SRT (English . They do not provide the in-depth knowledge intuitive understanding of the material covered in this session. fixed inputs.PDF English . books or any 5.

The capital rental rate multiplied by the number of Problem set 4 machines used. 2. machines needed to produce one additional unit. View by Chapter  Recitation: Economics of Scale (PDF) o Introduction to Perfect Competition (0:09:17) Before watching the lecture video. All firms are price takers on both output and input 1. Now introduction to the material covered in this session: we have all the ingredients for fully understanding the basic supply  [R&T] Chapter 9.US) Session Activities View by Chapter o Part A & B (0:08:04) Readings o Part C (0:06:56)competition 2 Read the recitation notes. market supply curves. "Competitive Markets for Goods and and demand diagrams that launched our study of economics. "Competitive Firms and Markets. We begin by analyzing the most common type of assistant notes common mistakes made by students and provides market: perfect competition. The teaching is operating in. All firms maximize profits.SRT (English ." Market (0:13:21) (optional) o Short Run Profit Maximization with Taxation (0:05:26) Lecture Videos o Short Run Shutdown Decisions (0:03:43)  View Full Video Resources o Lecture 11: Competition II (00:50:06) o Transcript . However. o Problem 3 Solution Video (00:15:01) Keywords: Perfect competition. a teaching assistant demonstrates his approach to should produce. problem solving techniques for approaching similar questions on the Firms.) (0:06:51) This concept quiz covers key vocabulary terms and also tests your o Determining Short Run Market Equilibrium intuitive understanding of the material covered in this session. like auto racers. 2.PDF English . All firms have the optimal levels of labor and capital.  View Full Video Session Activities o Lecture 10: Competition I (00:48:59) Readings o Transcript .US  Graphs and Figures (PDF) o Subtitle ." shutdown decision. Image courtesy of johnthurm on Flickr.  Productivity and Costs  Competition I 4. 4. The capital rental rate multiplied by the number of sides. Problem Set and Solutions Competition 1  Problem Set Questions (PDF) Working with the firm's cost function enables us to learn how much of  Problem Set Solutions (PDF) each input the firm should optimally use to produce a given level of Problem Solving Video output.US measurement. and its  Recitation: The Production Function and Costs (PDF) implications for the supply curve for different goods. operate in a competitive environment. Services. read the course textbook for an o Search Theory (0:04:34) introduction to the material covered in this session: o Firm Demand vs. how is the marginal cost defined? 3. This problem set and exams. Source: Wikipedia. we will learn about the factors that influence a firm's  [Perloff] Chapter 8. In the short run. which cover new content that adds to and o Subtitle .US) Check Yourself View by Chapter Concept Quiz oShort Run Shutdown Decisions (cont.Complete this quiz before moving on to the next session to make sure What is the definition of perfect competition? you understand the concepts required to solve the mathematical and 1. Market Demand (0:05:28)  [R&T] Chapter 9. The wage rate multiplied by the amount of labor used. o Subtitle . "Competitive Markets for Goods and o Measuring Costs in Profit Maximization (0:07:04) Services. This decision depends on the type of market the firm the solution for problem 3 from the problem set. (optional) Keywords: Shutdown decisions. We can use this Before watching the lecture video." o Short Run Profit Maximization in a Competitive  [Perloff] Chapter 8. graphical problems that are the basis of this course. In this lecture.PDF English . read the course textbook for an to construct the market supply curve from firms' supply curves." In this lecture. long-run market equilibrium. There is at least one firm producing the good of Question 1 of 5 interest.SRT (English . image is a work of the US Federal Government and in the public  View Full Video domain.PDF English .US Read the recitation notes.US) supplements the material covered in lecture. search theory. profit maximization. cost o Transcript . which cover new content that adds to and supplements the material covered in lecture. o Long Run Market Supply Curve with Perfect Competition (0:06:15) Question 1 of 5 . we continue to learn about competition.SRT (English . residual demand.  Introduction to Producer Theory 3. The wage rate multiplied by the number of hours needed to produce one additional unit. the firm still has to decide how much output it In the video below. (0:12:29) Complete this quiz before moving on to the next session to make sure o Long Run Market Equilibrium: Firm Entry and Exit you understand the concepts required to solve the mathematical and (0:12:34) graphical problems that are the basis of this course. short-run Lecture Videos market equilibrium. "Competitive Firms and Markets.

"Competitive Firms and Markets. introduction to the material covered in this session: Taxicab medallions are distributed and restricted by the government.US) . The owner of a pizza parlor hires an employee to Complete this quiz before moving on to the next session to make sure manage the business while he is away. Problem set 5 2.US Readings o Subtitle . We can understand these changes by Readings analyzing producer and consumer surplus. corporations.  Problem Set Solutions (PDF) 4 welfare economics Problem Solving Video While we typically analyze the operation of markets by examining the In the video below. benefit from consuming or producing a certain good.  [Perloff] Chapter 8. 3. Shareholders find it challenging to control a chief Question 1 of 5 executive officer. consumer surplus.US) reality. graphical problems that are the basis of this course.  Problem Set Questions (PDF) 4. Image courtesy of Vilseskogen (optional) on Flickr. workings—they affect the welfare that market participants gain by Session Activities virtue of being in the market." and have an impact on social welfare. read the course textbook for an (0:05:22) introduction to the material covered in this session: o Negative Impact of CEO Compensation Structure  [R&T] Chapter 6. consumer surplus.SRT (English . market. We also start o Part E (0:06:50) to think about how we can measure the welfare that consumers gain oPart F & G (0:03:53) from participating in a market. and in this lecture we start to learn why. but he can't monitor you understand the concepts required to solve the mathematical and whether the employee actually sells pizza or just wastes time. stock options. Problem Set and Solutions 3. o Lecture 12: Competition III (00:45:05) Session Activities o Transcript .SRT (English . both consumers and assistant notes common mistakes made by students and provides producers. but which will have a more elastic supply curve? then finds it doesn't have enough equipment for them to work 1. dead weight loss. who may seek to increase his own pay If you compare the elasticity of short-run supply in the markets for rather than increase the value of the company. producer surplus. normative shifts in supply.PDF English .  View Full Video social welfare. The market with more firms. While we assume that firms maximize profits. which cover new content that adds to and View by Chapter supplements the material covered in lecture. "Welfare Economics. welfare economics. Lecture Videos Keywords: Welfare economics. In this unit. a teaching assistant demonstrates his approach to movements of price or quantity. Check Yourself Question 1 of 4 Concept Quiz Which of the following is NOT an example of the agency problem? This concept quiz covers key vocabulary terms and also tests your intuitive understanding of the material covered in this session. o Part H (0:03:32) Stocks and stock options are commonly used to overcome the agency Werfare economics problem. (0:11:56) Complete this quiz before moving on to the next session to make sure Resources you understand the concepts required to solve the mathematical and  Graphs and Figures (PDF) graphical problems that are the basis of this course. Competition 3 o Problem 4 Solution Video (00:14:17) o Transcript . A company hires workers to expand its business. 2." (optional) o Introduction to Welfare Economics: Individual Lecture Videos Consumer Surplus (0:15:24)  View Full Video Resources o Lecture 13: Welfare Economics  Graphs and Figures (PDF)  Check Yourself o (00:47:07) Concept Quiz o Transcript . Keywords: Agency problem.PDF English . we may also be interested in asking broader the solution for problem 4 from the problem set.PDF English . this may not View by Chapter always be true. o Long Run Market Supply Curve in Real World intuitive understanding of the material covered in this session. Image courtesy of Lance Ball on Flickr.US) Read the recitation notes. o The Agency Problem (0:11:25)  Recitation: Competition Review (PDF) o CEO Compensation: Stocks and Stock Options Before watching the lecture video. problem solving techniques for approaching similar questions on the you will learn how to calculate producer and consumer welfare in a given problem set and exams. When changes occur in a market—whether they are shifts in demand. on. but they may not always exactly match o Subtitle . "Markets. 1. Maximizers. There is no difference." (0:12:51)  [Perloff] Chapter 9. or government policies that interfere in the market's economics. and Efficiency. read the course textbook for an lecture. The teaching questions about how much market participants. You will also learn how to analyze the changes in social welfare that  View Full Video result when policies are implemented that alter the market equilibrium.US This concept quiz covers key vocabulary terms and also tests your o Subtitle . two different goods and one market has more firms than the other.SRT (English . It depends on the specific production function. The market with fewer firms.US Models are easy to construct. and this is the focus of this Before watching the lecture video.

The teaching this topic more fully." intuitive understanding of the material covered in this session.PDF English . problem set and exams. in which one firm dominates an entire market. Monopolies are regulated o Part B (0:06:06) by governments to limit their market power. All of these. "Monopoly. shutdown rule. (0:08:01) o Market Power (0:04:50) 4. Downward-sloping. Firm  Graphs and Figures (PDF) behavior in the context of a monopoly or an oligopoly can be very different.  View Full Video  Chapter 11 (PDF . you will learn how to model the decisions made by firm in a Concept Quiz monopoly and an oligopoly. Check Yourself In this unit. marginal revenue. marginal cost. The demand curve is downward-sloping rather than  Problem Set Questions (PDF) horizontal.US) o Social Welfare and Dead Weight Loss (0:06:24) View by Chapter o Impact of Government Interference on Social o Part A (0:08:55) Welfare (0:05:01) o Part B (0:06:14) o Occupational Restrictions: Taxicab Medallions o Part C (0:02:25) (0:14:27) o Occupational Restrictions: Medical Residency Keywords: Monopoly. The market has only one firm. we began to learn about firms' decisions in a Complete this quiz before moving on to the next session to make sure competitive market where there are a large number of firms.US) Consumers will generally have consumer surplus that is highest when the demand curve has what characteristic? View by Chapter o Marginal Revenue For a Monopolistic Firm 1.SRT (English . Horizontal. applications. "Monopoly. Solutions 3. a o Part A (0:06:44) phenomenon known as price discrimination.6MB) o Problem 3 Solution Video (00:16:37) Monopoly 2 o Transcript .US o Producer Surplus (0:05:07) o Subtitle . In the previous lectures. profit (0:03:17) maximization. In this lecture. you understand the concepts required to solve the mathematical and different markets have different characteristics. or a small number of firms are present (an oligopoly). Firms are price makers. o Lecture 14: Monopoly I (00:46:58) o Transcript . View by Chapter o Problem 4 Solution Video (00:17:43) oMarket Consumer Surplus (0:12:46) o Transcript .US he analytical picture of monopolies presented in our last lecture may o Subtitle .PDF English . and the implications of these alternate This concept quiz covers key vocabulary terms and also tests your structures for consumer welfaremonopoly intuitive understanding of the material covered in this session.US) be too simple. These cases  View Full Video . What is the key defining feature of a monopoly? The game Monopoly is named after the economic concept. we have analyzed the operation of firms in a perfectly competitive market. there are many markets o Price Discriminating Firms (0:06:59) that are not competitive: either there is only one firm operating (a Resources monopoly). assistant notes common mistakes made by students and provides Textbook Study Materials problem solving techniques for approaching similar questions on the See the [Perloff] chapter for the topics covered. yet in some cases o Part C (0:03:45) governments may encourage the operation of monopolies. a teaching assistant demonstrates his approach to These optional resources are provided for students that wish to explore the solution for problems 3 and 4 from the problem set. Highly elastic. market power." (optional) Complete this quiz before moving on to the next session to make sure Lecture Videos you understand the concepts required to solve the mathematical and  View Full Video graphical problems that are the basis of this course.SRT (English .US Question 1 of 5 o Subtitle .  Problem Set Solutions (PDF) 4. we begin to learn about the operations of a monopoly market. as well as quizzes. Highly inelastic. not price takers.SRT (English . and other related resources. read the course textbook for an Concept Quiz introduction to the material covered in this session: This concept quiz covers key vocabulary terms and also tests your  [R&T] Chapter 10. Boncher on Flickr. However. Image courtesy of William 1. there may be only one or a few firms. Monopolies may not always charge the same price to View by Chapter every customer – they can choose to charge different prices. and in some markets graphical problems that are the basis of this course.  [Perloff] Chapter 11. However. where only one firm is Question 1 of 4 producing a given good.1. price discrimination.PDF English .problem set 6roblem Set and 2. o Elasticity and Marginal Revenue (0:05:42) o Profit Maximization and Shutdown Conditions 3. Problem Solving Video Further Study In the video below. o Welfare Effects of Monopoly (0:06:03) Monopoly and oligopolyUp to this point. (0:15:16) 2. Resources  Graphs and Figures (PDF) Session Activities Readings Check Yourself Before watching the lecture video.

roblem Set and Solutions Question 1 of 4  Problem Set Questions (PDF) Which of the following descriptions corresponds to a natural  Problem Set Solutions (PDF) monopoly? Problem Solving Video 1.both Pepsi and Coke are major Oligopoly 2 producers. o Sources of Monopoly Formation: Cost Advantages Complete this quiz before moving on to the next session to make sure (0:05:58) you understand the concepts required to solve the mathematical and o Sources of Monopoly Formation: Government graphical problems that are the basis of this course. which cover new content that adds to and o Transcript ." o Cournot Competition (0:10:52)  [Perloff] Chapter 11.S. and they dominate the market. The teaching assistant notes common mistakes made by students and provides 2. o Subtitle . Image courtesy of  Problem Set Solutions (PDF) Sheep purple on Flickr. Nash equilibrium. introduction to the material covered in this session: Keywords: Monopoly. are discussed in greater detail in this lecture.PDF English .US) Oligopoly 1 View by Chapter We have already learned about the operation of two very different o Part A & B (0:07:29) types of markets: perfectly competitive markets and monopolists. 3. Check Yourself 2.SRT (English . read the course textbook for an courtesy of John Taylor on Flickr.PDF English . the solution for problem 2a-e from the problem set. cartel. In the video below. Image Before watching the lecture video. "Pricing and Advertising.US marginal costs o Subtitle . duopoly. A firm that can produce at lower average cost than any In the video below.SRT (English . natural monopolies. A firm with extremely large fixed costs and tiny o Transcript . game theory. A firm for which average cost is declining everywhere problem solving techniques for approaching similar questions on the in the relevant range. mergers. most markets don’t fall into either category.  View Full Video o Problem 2 Solution Video (00:16:33) 4. o Part C & D (0:04:57) However. A strategy that is never optimal. Department of Justice enforces antitrust laws. A strategy that is optimal independent of the other you understand the concepts required to solve the mathematical and player's decision. non-cooperative competition. a teaching assistant demonstrates his approach to the solution for problem 2a-e from the problem set.US supplements the material covered in lecture." o Applications of Game Theory (0:06:31)  [R&T] Chapter 16.problem set graphical problems that are the basis of this course.US) Concept Quiz View by Chapter This concept quiz covers key vocabulary terms and also tests your o Examples of Price Discrimination (0:08:32) intuitive understanding of the material covered in this session. 3. Cournot Problem Solving Video model. All of these. a teaching assistant demonstrates his approach to other firm for all relevant quantities. This concept quiz covers key vocabulary terms and also tests your intuitive understanding of the material covered in this session. "The World of Imperfect Competition. Complete this quiz before moving on to the next session to make sure 4. contestable markets. For example. antitrust policy. A strategy that is optimal if the other player plays the  Graphs and Figures (PDF) opposite strategy. This type of market roblem Set and Solutions structure is known as an oligopoly. read the course textbook for an View by Chapter o Types of Oligopolies (0:04:57) introduction to the material covered in this session: o Game Theory and the Prisoner's Dilemma (0:13:17)  [R&T] Chapter 10.  [Perloff] Chapter 12." regulation." (optional) o Best Response Curves (0:08:18) Lecture Videos Resources  View Full Video  Graphs and Figures (PDF) o Lecture 15: Monopoly II (00:48:24) o Transcript ." (optional) Session Activities Lecture Videos  View Full Video Readings o Lecture 16: Oligopoly I (00:50:05) Read the recitation notes.US Check Yourself o Subtitle . price discrimination. "Antitrust Policy and Business o Repeated Games (0:06:05) Regulation.PDF English . "Monopoly. o Part E (0:04:05) think of the market for soda . The teaching Session Activities assistant notes common mistakes made by students and provides . Keywords: Oligopoly.SRT (English .US)  Recitation: Price Ceilings and Price Floors (PDF) Before watching the lecture video. Actions (0:08:32) o Price Regulation (0:15:05) Question 1 of 4 o Contestable Market: The Airline Industry (0:10:13) What is the definition of a dominant strategy? Resources 1. "Monopoly. problem set and exams. price  [R&T] Chapter 11. Readings The U. A strategy that is optimal if the other player plays an Concept Quiz identical strategy.  Problem Set Questions (PDF) Learn about the prisoner’s dilemma in this lecture. and it is the subject of this lecture.

Image courtesy of microeconomics that round out our basic understanding of the ntknicole on Flickr.  View Full Video 4. a In a perfectly competitive labor market. o Subtitle . Both countries. and those flowers are not raised View by Chapter locally—they are imported from other countries. o Transcript .PDF English . Intermediate micron this unit of the course. Country 1. o Transcript . You will also be Session Activities introduced to the analysis of international trade and capital Readings markets. First. Neither country. comparative advantage.  Graphs and Figures (PDF) 2. wage discrimination. and those flowers are not raised graphical problems that are the basis of this course. economy. specialization. locally—they are imported from other countries.SRT (English . but o Part C & D (0:04:57) up to this point it has been excluded from our models. read the course textbook for an Earlier in the semester. you understand the concepts required to solve the mathematical and February in New England is snowy. The marginal product of labor.US o Subtitle . firms should hire workers until the basic introduction to the principles of international trade is provided. Image courtesy of 1. "International Trade." Concept Quiz  [Perloff] Chapter 15. The price multiplied by the marginal product of labor. o Subtitle . Which country has a comparative advantage in o Barriers to Wage Discrimination (0:05:48) producing apples? o Minimum Wage and Employment Rates (0:15:48) Resources 1. read the course textbook for an  Graphs and Figures (PDF) introduction to the material covered in this session:  [R&T] Chapter 14. Before watching the lecture video. o Impact of International Trade on Welfare (0:07:34) o Trade Restrictions: Tariffs (0:07:56) Session Activities o The Argument for Free Trade (0:08:09) Readings Resources Before watching the lecture video. autarky. tariffs.problem solving techniques for approaching similar questions on the 3.PDF English . However. Lecture Videos Complete this quiz before moving on to the next session to make sure  View Full Video you understand the concepts required to solve the mathematical and o Lecture 18: Factor Markets (00:39:19) graphical problems that are the basis of this course. we discussed the labor supply decisions made introduction to the material covered in this session: by consumers when deciding how much they should or should not  [R&T] Chapter 17. In this lecture. Capital supply nd markers Complete this quiz before moving on to the next session to make sure w many of you have received flowers for Valentine's Day? Of course. o Problem 2 Solution Video (00:16:33) International trade o Transcript .SRT (English . free trade. free trade. . are producing only two o Determining Demand for Labor (0:11:36) goods. labor supply. empirical economics. specialization. apples and oranges." work.US A firm made the decision to hire these workers. This lecture focuses on the operation of firms in the factor  View Full Video markets that supply the factors (labor and capital) they use in o Lecture 19: International Trade (00:45:42) production. o Comparative Advantage: The Market for Roses (0:17:13) Keywords: Input markets.US) discover the determinants of this decision! Image courtesy of Remko View by Chapter Tanis on Flickr. The marginal revenue. Country 2. and are relevant in more advanced study and research.PDF English . expenditure o Sources of Comparative Advantage (0:04:46) curves. you will be provided with an overview of firm operation in autarky. International trade is o Part A & B (0:07:29) hugely important in national and international economies today." This concept quiz covers key vocabulary terms and also tests your (optional) intuitive understanding of the material covered in this session. 2. firms have the power to decide how many workers to Lecture Videos hire. you will learn about how consumers incorporate uncertainty into their decision-making. Keywords: International trade. In this lecture.US) February in New England is snowy. comparative advantage. monopsony. "Imperfectly Competitive Markets for Factors of Check Yourself Production.US) Question 1 of 4 View by Chapter Assume two countries. ntknicole on Flickr. Check Yourself 3.SRT (English . International trade is hugely important in national and international economies today. we provide an Roses you receive on Valentine’s Day may have been imported from introduction to a number of more advanced topics in another country as a product of international trade. The opportunity cost of producing an apple is o The Monopsony Model (0:13:22) higher in Country 1. factor markets. Concept Quiz This concept quiz covers key vocabulary terms and also tests your 4. Country 1 and Country 2. tariffs.US w many of you have received flowers for Valentine's Day? Of course. a o Part E (0:04:05) basic introduction to the principles of international trade is provided. In this lecture. problem set and exams. wage is equal to what quantity? Roses you receive on Valentine’s Day may have been imported from another country as a product of international trade. The price. "Factor Markets and Vertical Integration. intuitive understanding of the material covered in this session. Next. Keywords: International trade. but Question 1 of 4 up to this point it has been excluded from our models.

01 Principles of Microeconomics.US Concept Quiz o Subtitle . These exams are from Professor William 2 Wheaton's course site."  [Perloff] Chapter 16.PDF English . and Capital Markets. Total profits summed over time. complete the 4. "Interest Rates and the Markets for Capital and Natural Resources. intuitive understanding of the material covered in this session. You are not allowed to use notes. discount rate." Resources Lecture Videos  Graphs and Figures (PDF)  View Full Video o Lecture 19: International Trade (00:45:42) Check Yourself o Transcript . o Comparative Advantage: The Market for Roses (0:17:13) Complete this quiz before moving on to the next session to make sure o Sources of Comparative Advantage (0:04:46) you understand the concepts required to solve the mathematical and o Impact of International Trade on Welfare (0:07:34) graphical problems that are the basis of this course. "Interest Rates. exam. read the course textbook for an o The Importance of Savings (0:03:43) introduction to the material covered in this session: o Policy Efforts to Increase Long Term Savings (0:17:52)  [R&T] Chapter 17.US) View by Chapter o Determining Savings Decisions Over Time (0:06:56) . such as whether to The exam should be completed in 3 hours. Concept Quiz This concept quiz covers key vocabulary terms and also tests your 2. Session Activities o Investment Decisions and Net Present Value (0:12:21) o Application of Investment Decisions: Human Capital Readings (0:06:34) Before watching the lecture video. apples and oranges." (optional) Lecture Videos  View Full Video o Lecture 22: Capital Supply and Markets II (00:47:31) o Transcript .SRT (English .US o Subtitle . books or any The savings of individuals drive the growth of our economy. The goods. graphical problems that are the basis of this course. o Trade Restrictions: Tariffs (0:07:56) o The Argument for Free Trade (0:08:09) Question 1 of 3 Resources If a firm is making an investment decision. "International Trade. Image other aids.  Final Exam Problems (PDF) Keywords: Investment decisions. Exam Question 1 of 4 Content Review Assume two countries. Complete this quiz before moving on to the next session to make sure you understand the concepts required to solve the mathematical and 4. and are used with permission. following practice exams. In this lecture. equation sheets. Session Activities Readings Before watching the lecture video. 2. we Exam Problems and Solutions will discuss how individuals make major decisions. are producing only two Please review all course content before attempting the exam. This is a closed book attend college and how much to save for retirement. we can understand  Practice Final Exam Problems (PDF) how both firms and individual consumers make decisions about how  Practice Final Exam Solutions (PDF) much to invest in different types of opportunities.  Final Summary Notes (PDF) 3. Fall Now that we understand what the cost and benefits are of different 2007.SRT (English .US) This concept quiz covers key vocabulary terms and also tests your View by Chapter intuitive understanding of the material covered in this session. Practice Exams Once you are comfortable with the course content.PDF English . Net present value. Both countries. Country 1 and Country 2. what measure should it use to  Graphs and Figures (PDF) compare two different potential projects and decide which to invest in? Check Yourself 1. Total revenues summed over time. Neither country. consumption and investment decisions over time.  Final Exam Solutions (PDF) subsidized retirement savings programs. The opportunity cost of producing an apple is summary notes below are concise outlines of the main points covered higher in Country 1. 3. courtesy of B3OK on Flickr. 14. net present value. Present value. read the course textbook for an introduction to the material covered in this session:  [R&T] Chapter 13. Which country has a comparative advantage in in each session for the final third of the course. Country 2. Investments. They do not provide the in-depth knowledge needed to successfully complete the 1. exam problems. These notes are producing apples? presented only as a study aid in reviewing for the exam. Country 1.