This course will cover individual consumer and firm behavior under perfect competition. The course will cover the following topics: role of markets and prices in a decentralized economy, monopolies in partial equilibrium, neoclassical analysis of general equilibrium, welfare economics, imperfect competition, externalities and public goods, adverse selection, and moral hazard. Concepts from game theory will be introduced in the later part of the course.
At the end of the term, students will be able to:
- Learn how to use economic reasoning to understand how firms and consumer make decisions
- Learn how to apply economic logic to social problem solving
- Understand economic insights in three ways: intuitively, graphically and mathematically
- Build a base of economics understanding that students can build on as they continue with more advanced economic courses
- 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.
Prerequisites: 10.004 Advanced Math II