Principles of Microeconomics
Shomu Banerjee
1. Introduction
Emory University
Spring 2013
What is Economics about?
• Allocation of scarce resources across
competing wants
• Opportunity cost
• Individual choice
• Decision-making at the margin
Two Notions
• Arithmomorphic
IS
Ex.: 3.72
IS NOT
• Dialectic
Ex.: friend
IS
IS NOT
Equilibrium & Efficiency
Preview
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Trade-offs: Opportunity cost
Trade-offs at a national level: PPF
Basis for international trade
Market : Demand, Supply, Equilibrium
Market interventions: Price controls, quantity
controls, taxes/subsidies
Preview cont’d
• Behind the demand curve: consumer theory
• Behind the supply curve: producer theory
• Market structures: # of buyers, # of sellers
Perfect
competition
Oligopoly
Monopolistic
competition
Monopoly
Duopoly
Preview cont’d
• Market failure
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–
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–
Imperfect competition
Externalities
Public goods
Asymmetric information
• Strategic interaction: Game theory
• Duopoly and oligopoly
Grading policy
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2 midterms: 20% each
Final exam: 30%
Online HW (Sapling): 15%
Individual in-class clicker quizzes: 5%
Group in-class clicker quizzes: 10%