Course Description: Principles of Microeconomics

At the foundation of economics is the concept of foregone opportunity: 
by doing this, I forego that.  Hence the course opens with the study of
scarcity, opportunity cost, and comparative advantage.  The body of the
course is divided into three components.

In the first third of the course, we will analyze the determinants of 
trade in markets using the concepts of demand, supply, and equilibrium. 
In particular, we will learn how prices and the amount traded depend on
the incomes of consumers, the prices of other goods (complements and 
substitutes), the prices of inputs used to produce the good, technology, 
and government restrictions (e.g., rent controls, prohibition, taxes,
and subsidies).

In the middle third of the course, we will develop a deeper understanding 
of the determinants of demand and supply.  In particular, we will analyze 
the fundamentals of production and costs, derive market supply curves based 
on the profit-maximizing choices of individual firms, explore the dynamics 
of how markets respond to fundamental changes (e.g., innovation), and 
characterize the effects of monopoly power.  This section of the course 
closes by applying game theory to the stategic interactions or rivalries 
among firms.

The final third of the course focuses on the markets for resources or 
inputs, such as flour, cheese, and restaurant space in the case of pizza
production.  We will investigate what determines whether a resource is
paid what it's worth.  In particular, are workers paid what they're
worth in a free market?  We will also study financial markets, including
determination of equilibrium interest rates and iinvestments.  The
course closes with a characterization of the performance of free markets
in the presence of externalities: what happens in free markets when one
person's choices spill over to directly effect the welfare of others.