This is an archived course. A more recent version may be available at ocw.mit.edu.

Advanced Search
    Archived Versions

    Readings

    Amazon logo When you click the Amazon logo to the left of any citation and purchase the book (or other media) from Amazon.com, MIT OpenCourseWare will receive up to 10% of this purchase and any other purchases you make during that visit. This will not increase the cost of your purchase. Links provided are to the US Amazon site, but you can also support OCW through Amazon sites in other regions. Learn more.

    Required Textbook

    Amazon logo Nicholson, Walter. Intermediate Microeconomics and Its Applications. 9th ed. Stamford, CT: Thomson Learning, 2003. ISBN: 0030259169.

    SES # TOPICS Readings

    1

    Overview of the Current U.S. economy

    Supply and Demand

    Freudenheim, Milt. "Companies Limit Health Coverage of Many Retirees." New York Times, February 3, 2004, Section A, Page 1.

    Levy, Frank, and Richard J. Murnane. "Got a Routine Job? Not for Long." Washington Post Sunday Outlook, July 4, 2004, Page 3.

    Nicholson. Chapter 1 and appendix to chapter 1.

    Tools: Experiment with examples 1.1 and 1.2 under Demand and Supply.

    2

    Supply and Demand (cont.) and Elasticity

    Nicholson. pp. 130-149.

    Wessel, David. "A Lesson from the Blackout: Free Markets Also Need Rules." Wall Street Journal, August 28, 2003, Page 1.

    Tools: Experiment with examples 1.3 through 1.5 under Demand and Supply.

    3

    Tutorial 1: Simple First Derivatives and Basic Calculus

    		  

    4

    Begin Utility Maximization and the Allocation of Scarce Resources - e.g. the Machinery Behind the Demand Curve

    Nicholson. Chapter 2.

    Tools: Experiment with three exercises under Consumer Behavior.

    5

    Utility Maximization (cont.)

    Individual Demand and Market Demand

    Nicholson. Chapters 3 and 4, pp. 126-130.

    6

    The Cost of Medical Care - An Application of Demand/Supply and Utility Under Uncertainty

    Nicholson. pp. 503-509.

    Newhouse, Joseph. "Medical Care Costs: How Much Welfare Loss?" Journal of Economic Perspectives, 6, no. 3: 3-21.

    7

    Technology, Costs and Returns to Scale

    Nicholson. Chapters 5 and 6.

    Autor, David, Frank Levy, and Richard J. Murnane. "Upstairs, Downstairs: Computers and Skills on Two Floors of a Large Bank." Industrial and Labor Relations Review, April 2002, pp. 432, ff.

    Tools: Experiment with exercise 3.1 "Cost" under Producer Behavior.

    8

    Technology, Costs and Returns to Scale (cont.)

    Nicholson. Chapters 5 and 6.

    Autor, David, Frank Levy, and Richard J. Murnane. "Upstairs, Downstairs: Computers and Skills on Two Floors of a Large Bank." Industrial and Labor Relations Review, April 2002, pp. 432, ff.

    Tools: Experiment with exercise 3.1 "Cost" under Producer Behavior.

    9

    Basic Logic of Profit Maximization

    Nicholson. Chapter 7.

    Tools: Under Markets, experiment with exercise 4.2.1 "Demand and Revenue."
     

    First Midterm (covers through Session 8)

    		  

    10

    Profit Maximization in Competitive Markets

    Nicholson. Chapters 8 and 9.

    Tools: Experiment with exercise 4.1.1 "Short and Long Run Equilibria" under Markets.

    11

    Profit Maximization in Competitive Markets (cont.)

    Nicholson. Chapters 8 and 9.

    Tools: Experiment with exercise 4.1.1 "Short and Long Run Equilibria" under Markets.

    12

    Profit Maximization Under Monopoly

    Nicholson. Chapter 10.

    Amazon logo Shapiro, Carl, and Hal Varian. Information Rules. Cambridge, MA: Harvard Business School Press, 1998, chapter 7. ISBN: 087584863X.

    Belson, Ken. "In Startling Retreat, AT&T to Stop Marketing to Consumers." New York Times, July 23, 2004.

    Richtel, Matt. "Bells Win Battle, Not Necessarily the War." New York Times, July 23, 2004.

    13

    Oligopoly and Monopolistic Competition

    Nicholson. Chapter 11.

    Maynard, Micheline. "Pilots at Delta Offer to Take a 23% Cut in Wages." New York Times, July 22, 2004.

    For an example of monopolistic competition by adding features, look at the evolution of PDA's (e.g. Palm Pilots) and Smart Phones on Palm Evolution.

    14

    A Taste of Simple Game Theory

    Nicholson. Chapter 12.

    Ellison, Glenn, and Sara Fisher Ellison. "Search, Obfuscation, and Price Elasticites on the Internet." January 2001. (PDF)
     

    Second Midterm (covers through Session 12)

    		  

    15

    International Trade and Offshoring

    Amazon logo Krugman, Paul R., and Maurice Obstfeld. International Economics: Theory and Policy. Pearson Education Limited; International edition edition 2008, chapter 2, pp. 10-37. ISBN: 9781408208076.

    Boo, Katherine. "Letter from India: The Best Job in Town." The New Yorker, July 5, 2004, pp. 54-69.

    16

    Pulling it Together - Trade, Technology and the Labor Market

    Uchitelle, Louis. "Surge in Jobs Mostly Bypasses the Factory Floor." New York Times, May 11, 2004.

    17

    Course Wrap-up

    		  

    18

    Final Exam