Lecture Notes:

9/30/14: Introduction and Review of Consumer Theory

10/02/14: Introduction to the Theory of the Firm

10/07/14: Profit Maximization

10/09/14: The Long and the Short Run

10/14/14: Equilibrium in Exchange and Production Economies

10/16/14: Shocks and Interventions in Partial Equilibrium

10/23/14: General Equilibrium in Production Economies

10/28/14: Equilibrium and Welfare

10/30/14: Externalities

11/06/14: Addressing Externalities

11/11/14: Monopoly

11/13/14: Strategic Interaction

11/20/14: The Cournot Model of Oligopoly

11/25/14: Dynamic Oligopoly

12/02/14: Price Competition

Additional Material:

As we discuss in class during week 4, an important example of a price floor is the minimum wage. It has been a big topic of debate recently as Obama has pushed for increasing the Federal minimum wage from $7.25 to $10.10 an hour, and various states have debated laws of their own. This topic is discussed in the op-eds in NYTimes below:

Greg Mankiw

Paul Krugman

We also discussed the problem of externalities and approaches to dealing with them. A summary of some of the approaches applied to climate change is available here.

In class on November 20 we discussed game theory and Nash equilibrium. The following is a paper that tests the predictions of game theory using penalty kicks in soccer:

Chiappori, Groseclose and Levitt (2002).

Problem Sets:

Problem Set 1 (due 10/09/14)

Problem Set 2 (due 10/16/14)

Problem Set 3 (due 10/23/14)

Problem Set 4 (due 10/30/14)

Problem Set 5 (due 11/18/14)

Problem Set 6 (due 11/25/14)

Problem Set 7 (due 12/04/14)


Practice Midterm 1 with solution.

Practice Midterm 2 with solution.

Midterm with Solution (9:00-10:20)

Midterm with Solution (10:30-11:50)

Practice Final 1 with solution.

Practice Final 2 with solution.

Practice Final 3 with solution.