The strategy of microeconomics for understanding economic behavior is to start with individual economic agents – consumers and firms – and move ‘from the bottom up’ towards understanding market demand and supply. Following this route, we will learn how to analyze the market in equilibrium, and the advantages and disadvantages of various market structures (e.g., perfect competition or monopoly). While the basic story of microeconomics is a cheerful one for the competitive market, we will also study circumstances under which the market runs into difficulties for delivering efficient outcomes.
Pre-Requisite
- 10.018 Modelling Space and Systems
Learning Objectives
By the end of the course, students should be able to:
• Learn how to use economic reasoning to understand how firms and consumers make decisions.
• Understand how markets reach equilibrium between supply and demand.
• Acquire basic notions of industrial organizations, game theory, bargaining and auction theory, and apply them to understand various social phenomena.
• Learn to analyze the effects of shifting demand, supply, and conditions of competition, governmental policy and market structure on the economy.
Measurable Outcomes
During this course:
• Students will be assessed through exams and homework.
• Students will need to be able to answer basic questions on microeconomics.
• Students will need to be able to construct basic economic models and apply them to new situations.
• Students will be asked to apply consumer theory to a variety of new situations.
Course Requirement
| Assessment | Percentage |
| WEC – Class participation | 10 |
| WEC – Mid-term Exam | 30 |
| WEC – Assignments | 30 |
| WEC – Group Presentations | 30 |
Weekly Schedule
Week 1: Introduction. Supply and Demand.
Week 2: Consumer Theory I: Preference and Utility.
Week 3: Consumer Theory II: Budget Constraint. Choice. Individual Demand.
Week 4: Producer Theory: Cost and Profit. Market Supply.
Week 5: Welfare Analysis. Effects of Government Interventions.
Week 6. Externalities. Public goods.
Week 7: Recess Week.
Week 8: Midterm Exam. Perfect Competition.
Week 9: Monopoly. Price Discrimination.
Week 10: Oligopoly. Game Theory I.
Week 11: Game Theory II. Auctions.
Week 12: Extension Topic 1: Introduction to Digital Economy.
Week 13: Extension topic 2: Introduction to Behavioral Economics.
Instructor
Su Mengyang