11.203 | Fall 2010 | Graduate



[NS]= Nicholson, Walter, and Christopher Snyder. Intermediate Microeconomics and Its Application. 11th ed. South-Western College Publishers, 2009. ISBN: 9780324599107.


Course overview

Economic efficiency

Introduction to supply and demand

[NS] Chapter 1 (including appendix).

Clifford, Stephanie. “Sales Were Sluggish in July for Retailers.” New York Times, August 5, 2010, p. 1.

Kramer, Andrew E., and Jack Healy. “Russia, Crippled by Drought, Bans Grain Exports.” New York Times, August 5, 2010, p. 1.


Supply and demand, cont.

Price elasticity of demand

Price elasticity of supply

Income elasticity of demand

[NS] pp. 117-132.

Associated Press. “Post Office Wants to Raise Stamp Price.” New York Times, July 6, 2010.


Supply and demand, cont.

Problems in the U.S. labor market

Autor, David. “The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings.“Center for American Progress and the Hamilton Project of the Brookings Institution, April 2010. In reading this piece, pay attention to earnings and occupational differences by gender, education and race.

Peck, Don. “How a New Jobless Era Will Transform America.” The Atlantic Magazine, March 2010.


Behind the demand curve

Utility theory

The allocation of scarce resources

[NS] Chapter 2.

Shoup, Carl S. “Rules for Distributing a Free Government Service Among Areas of a City.” National Tax Journal (June 1989): 1-9.

Visualization tools: Experiment with exercises 2.1-2.3.


Behind the demand curve, cont.

Income and substitution effects

Consumer surplus

[NS] pp. 87-117.

Glaeser, Edward L., et al. “Why Do the Poor Live in Cities? The Role of Public Transportation.” Journal of Labor Economics (2007).

6 The housing and financial bubbles

Shiller, Robert J. “Understanding Recent Trends in House Prices and Home Ownership.” Talk prepared for Jackson Hole Symposium, Kansas City Fed. Housing, Housing Finance, and Monetary Policy. August 2007, pp. 1-19. (PDF)

Immergluck, Dan. “Mortgage Market Breakdown: The Contributions of Transactional Failures, Conflicts of Interest and Global Capital Surpluses.” In Foreclosed: High-Risk Lending, Deregulation, and the Undermining of America’s Mortgage Market. Cornell University Press, 2009. ISBN: 9780801447723.

7 Technology, costs, and returns to scale

[NS] Chapter 6 and 7.

Vlasic, Bill. “Detroit Goes From Gloom to Economic Bright Spot.” New York Times, August 13, 2010.

Visualization tools: Experiment with exercise 3.1.


Technology, costs, cont.

Profit maximization

[NS] Chapter 8.

Visualization tools: Experiment with exercise 4.1.1.

9 Midterm 1 No readings

Perfect competition

Entry and exit

[NS] Chapter 9.

Video: “Farm Fallout.” Jim Lehrer NewsHour, Monday, July 13, 2009.


Perfect competition, cont.

Overview of general equilibrium

[NS] Chapter 10.
12 Imperfect competition I—Monopoly

[NS] pp. 377-388.

Levy, Steven. “Secret of Googlenomics: Data-Fueled Recipe Brews Profitability.” Wired Magazine, May 22, 2009.

Pearlstein, Joanna. “Anatomy of an Auction.” Wired Magazine, February 23, 2009.

Video: Varian, Hal. “Introduction to the Google Ad Auction.” March 11, 2009.

Visualization tools: Experiment with exercise 4.2.1 and 4.2.2.

13 Imperfect competition II—Price discrimination, monopolistic competition

[NS] pp. 388-402, and 442-443.

Wyatt, Edward. “Google and Verizon Near Deal on Web Pay Tiers.” New York Times, August 4, 2010.

Miller, Claire Cain, and Brian Stelter. “Web Plan Is Dividing Companies.” New York Times, August 11, 2010.

14 and 15 Imperfect competition III—Oligopoly and game theory

[NS] pp. 411, and 414-421.

Parkin, Michael. “Oligopoly.” Economics. 9th ed. Prentice Hall, 2009. ISBN: 9780321589491.

Stellin, Susan. “Start-Up Airlines in a Struggle to Survive.” July 5, 2010.

Notes on Oligopoly Day 1* (PDF)

Notes on Oligopoly Day 2* (PDF)

(*Notes courtesy of Lauren Lambie-Hanson. Used with permission)

16 Capstone example: Why medical costs rise so fast (including brief discussion of the effects of medical uncertainty, agency and the pernicious role of incentives, etc.)

Buy at MIT Press Newhouse, Joseph. “Introduction.” Pricing the Priceless. MIT Press, 2002. ISBN: 9780262640589.

Winstein, Keith J. “A Simple Health-Care Fix Fizzles Out.” Wall Street Journal 11 (February 2010).

Semelka, Richard, et al. “Objective Determination of Standard of Care: Use of Blind Readings by External Radiologists.” American Journal of Roentology (August 2010): 429-342.

17 Midterm 2 No readings

Course Info

As Taught In
Fall 2010
Learning Resource Types
Problem Sets with Solutions
Exams with Solutions