Courses:

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.

The course addresses the need for choice implied by the scarcity of resources. The fact of scarcity necessitates that individuals, firms, and societies choose among alternative uses – or allocations – of its limited resources. At the same time, the various choices made by different economic agents must be mutually consistent. For example, the expansion of one sector accompanied by that sector's increased use of labor and capital is only possible if accompanied by a net contraction in other industries. Markets are a mechanism to achieve such reconciliation. In this first part of the class we seek to understand how economists model the choice process of individual consumers and firms, and how markets work to coordinate these choices. We also examine how well markets perform this function using the economist's criterion of market efficiency.

Reading Assignments

The reading is primarily from: Parkin, Michael. Microeconomics. 6th ed. Sydney: Addison-Wesley Publishing, 2004. ISBN: 0321226577. Some selected additional readings are found in the course packet provided by the Sloan Fellows Program.

Grading

Students will be graded as follows: