Principles of Microeconomics

Course Dates: Open-ended
Enrollment Dates: Enroll Anytime
Who can Enroll: Anyone
Course Language: English
Price: FREE

About the Course

Principles of Microeconomics is an introductory undergraduate course that teaches the fundamentals of microeconomics. At MIT, this is the first course that undergraduates take in economics. For some, it may be the only course they take in the subject, and it provides a solid foundation for economic analysis and thinking that can last throughout their education and subsequent professional careers. For other students, it may provide a foundation for many years of study in economics, business, or related fields.

This course begins with an introduction to supply and demand and the basic forces that determine an equilibrium in a market economy. Next, it introduces a framework for learning about consumer behavior and analyzing consumer decisions. We then turn our attention to firms and their decisions about optimal production, and the impact of different market structures on firms’ behavior. The final section of the course provides an introduction to some of the more advanced topics that can be analyzed using microeconomics theory. These include international trade, the impact of uncertainty on consumer behavior, the operation of capital markets, equity vs. efficiency trade-offs in economic policy and social insurance.

By the end of the course, you will be able to understand introductory microeconomics theory, solve basic microeconomics problems, and use these techniques to think about a number of policy questions relevant to the operation of the real economy.

Course Goals

After completing this course, students should have developed a range of skills enabling them to understand economic concepts and use those concepts to analyze specific questions.

By the end of this course, students should be able to:

  1. Understand consumer behavior.
  2. Understand firm behavior.
  3. Analyze different types of market structures (monopoly, oligopoly and a competitive market).
  4. Understand how to apply economic principles to a range of policy questions.

Students should also have the skills needed to:

  1. Use supply and demand diagrams to analyze the impact of overall changes in supply and demand on price and quantity.
  2. Solve a consumer’s utility maximization problem mathematically and graphically; analyze the impact of changes in price and income on a consumer’s decision via shifting income and substitution effects.
  3. Understand the consumer’s labor supply decision.
  4. Solve a firm’s cost minimization problem mathematically and graphically.
  5. Analyze the behavior of firms in a perfectly competitive market in the short-run and the long-run.
  6. Calculate producer and consumer surplus.
  7. Analyze the behavior of firms in a monopoly or oligopoly, and calculate the resulting changes in producer or consumer surplus.
  8. Understand consumer behavior under uncertainty.
  9. Use economic tools to analyze economic policies.

Prerequisites

This course will include some basic uni-variate calculus material, as taught in the MIT course Single Variable Calculus or in a comparable high-school calculus course. There are no other prerequisites.

Texts

Rittenberg, Libby, and Timothy Tregarthen. Principles of Microeconomics(PDF – 15.1MB). 2009. (Courtesy of Libby Rittenberg, Timothy Tregarthen, and the Saylor Foundation.)

About the Professor

Dr. Jonathan Gruber is the Ford Professor of Economics at the Massachusetts Institute of Technology, where he has taught since 1992. He is also the Director of the Health Care Program at the National Bureau of Economic Research, where he is a Research Associate, and President Elect of the American Society of Health Economists. He is a member of the Institute of Medicine, the American Academy of Arts and Sciences, and the National Academy of Social Insurance. He has published more than 150 research articles, has edited six research volumes, and is the author of Public Finance and Public Policy, a leading undergraduate text, and Health Care Reform, a graphic novel. In 2006 he received the American Society of Health Economists Inaugural Medal for the best health economist in the nation aged 40 and under.

License Information

Jonathan Gruber. 14.01SC Principles of Microeconomics, Fall 2011. (Massachusetts Institute of Technology: MIT OpenCourseWare), http://ocw.mit.edu (Accessed 17 Mar, 2015). License: Creative Commons BY-NC-SA

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