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Home > Courses > Economics > Principles of Microeconomics
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Lecture Notes
The lecture notes shown below are from the one of the Discussion
sections for the course. The subtopics for each lecture are related to
the chapters in the textbook. These lecture notes were prepared by
Xingze Wang, YingHsuan Lin, and Frederick Jao specifically for MIT
OpenCourseWare.
SES #
D1
TOPICS
Overview: themes, types of
markets, economic
SUBTOPICS
Optimization and allocation
(chapter 1)
SES #
TOPICS
measurement, economic
analysis (PDF)
SUBTOPICS
Definition and various types of
markets (chapter 2)
Economic measurement
(chapter 2)
Economic analysis (chapter 2)
Demand and supply curves
(chapter 2)
D2
The basics of supply and
demand (PDF)
Equilibrium in the market
(chapter 2)
Government interventions
(chapter 2)
Price elasticity of demand
(chapter 2)
Income elasticity of demand
(chapter 2)
D3
Elasticities of demand (PDF)
Cross price elasticity of demand
(chapter 2)
Comparison of elasticity over
short run and long run (chapter
2)
D4
Price elasticity of supply;
consumer preferences (PDF)
Elasticity - price elasticity of
supply (chapter 2)
Consumer behavior - consumer
preference (chapter 3)
SES #
D5
TOPICS
Deriving MRS from utility
function, budget constraints,
and interior solution of
optimization (PDF)
SUBTOPICS
Utility functions, deriving
marginal rate of substitution
(MRS) (chapter 3)
Budget constraints (chapter 3)
Optimization: interior solutions
(chapter 3)
Optimization: corner solutions
(chapter 3)
D6
Optimization, revealed
preference, and deriving
individual demand (PDF)
Revealed preferences (chapter
3)
Deriving individual demand,
Engle curves (chapter 4)
D7
Substitution and income
effects, individual and market
demand, consumer surplus
(PDF)
Substitution effect, income
effect, Giffen goods (chapter 4)
From individual demand to
market demand (chapter 4)
Consumer surplus (chapter 4)
Irish potato famine (chapter 4)
D8
Irish potato famine, network
externalities, and uncertainty
(PDF)
Network externalities (chapter
4)
Uncertainty (chapter 5)
D9
Preference toward risk, risk
premium, indifference curves,
Preference toward risk (chapter
5)
SES #
TOPICS
and reducing risk (PDF)
SUBTOPICS
Risk premium (chapter 5)
Indifference curves between
expected value and standard
deviation (chapter 5)
Reducing risk: diversification
(chapter 5)
Reducing risk: insurance
(chapter 5)
D10
Insurance and production
function (PDF)
Outline of producer theory
(chapter 6)
Production functions: short run
and long run (chapter 6)
Short run production functions
(chapter 6)
D11
Production functions (PDF)
Long run production functions
(chapter 6)
Returns to scale (chapter 6)
Returns to scale (chapter 6)
D12
Production functions and cost
of production (PDF)
Production function derivation
(chapter 6)
Cost of production (chapter 7)
D13
Cost functions (PDF)
Short run cost functions
(chapter 7)
SES #
TOPICS
SUBTOPICS
Long run cost functions
(chapter 7)
Relation between long run cost
and short run cost (chapter 7)
D14
The cost of production and
profit maximization (PDF)
Economies of scale (chapter 7)
Economies of scope, learning
(chapter 7)
Profit maximization (chapter 8)
Short run supply (chapter 8)
D15
Short run and long run supply
(PDF)
Producer surplus (chapter 8)
Long run competitive
equilibrium (chapter 8)
Long run equilibrium (chapter
8)
D16
Long run supply and the
analysis of competitive
markets (PDF)
Long run market supply
(chapter 8)
Gains and losses from
government policies (chapter 9)
Agricultural price support
(chapter 9)
D17
Supply restrictions, tax, and
subsidy (PDF)
Supply restrictions (chapter 9)
Tax and subsidy (chapter 9)
SES #
TOPICS
SUBTOPICS
Tax (chapter 9)
Subsidy (chapter 9)
D18
Tax, subsidy, and general
equilibrium (PDF)
General equilibrium (chapter
16)
Exchange economy (chapter
16)
Exchange economy (chapter
16)
Contract curves (chapter 16)
D19
Efficiency in exchange, equity
and efficiency, and efficiency in
production (PDF)
General equilibrium in a
competitive market (chapter
16)
Utility possibilities frontier
(chapter 16)
Production in Edgeworth box
(chapter 16)
D20
D21
Production possibilities frontier
and output market efficiency
(PDF)
Why markets fail (PDF)
Production possibilities frontier
(chapter 16)
Output market efficiency
(chapter 16)
Why markets fail (chapter 16)
Monopoly (chapter 10)
D22
Monopoly (PDF)
Shift in demand and effect of
SES #
TOPICS
SUBTOPICS
tax (chapter 10)
Multiplant firm (chapter 10)
D23
Monopoly and monopsony
(PDF)
Social cost (chapter 10)
Price regulation (chapter 10)
Monopsony (chapter 10)
Monopsony (chapter 10)
D24
Monopoly and monopsony
(cont.) (PDF)
Monopoly power (chapter 10)
Price discrimination (chapter
11)
Third degree price
discrimination (chapter 11)
D25
Pricing with market power
(PDF)
Peak-load pricing (chapter 11)
Two-part tariffs (chapter 11)
Two-part tariffs (chapter 11)
D26
Pricing and monopolistic
competition (PDF)
Bundling (chapter 11)
Monopolistic competition
(chapter 12)
D27
Game theory and oligopoly
(PDF)
Game theory (chapters 12 and
13)
Oligopoly (chapters 12 and 13)
SES #
TOPICS
SUBTOPICS
Cournot games (chapters 12
and 13)
Stackelberg games (chapters
12 and 13)
D28
Oligopoly (PDF)
Bertrand games (chapters 12
and 13)
Prisoner's Dilemma (chapters
12 and 13)
Collusion - Prisoner's Dilemma
(chapters 12 and 13)
Repeated games (chapters 12
and 13)
D29
Strategic games (PDF)
Threat, credibility, commitment
(chapters 12 and 13)
Dominant firm model, cartel
(chapters 12 and 13)
D30
Dominant firm model and
factor market (PDF)
Dominant firm model (chapters
12 and 13)
Factor markets (chapter 14)
Supply of labor (chapter 14)
D31
Factor market (PDF)
Maximum/minimum strategy
(chapter 14)
Demand of labor (chapter 14)
SES #
TOPICS
SUBTOPICS
Present discount value (chapter
15)
D32
Investment, savings, time, and
capital markets (PDF)
Bonds (chapter 15)
Effective yields (chapter 15)
Interest rate determination
(chapter 15)
Adverse selection (chapter 17)
D33
Asymmetric information (PDF)
Moral hazard (chapter 17)
Unemployment (chapter 17)
Efficient wage theory (chapter
17)
D34
Externalities, market failure
and government (PDF)
Externalities (chapter 18)
Property rights (chapter 18)
Common property resources
(chapter 18)
D35
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Public goods (PDF)
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Public goods (chapter 18)
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