14.01 | Fall 2018 | Undergraduate

Principles of Microeconomics

Pages

L=Lecture R=Recitation

Session # Topic Key DAtes
L1 Introduction; Supply and Demand  
R1 Mathematically Deriving the Supply-and-Demand Model  
L2 Preferences and Utility Functions  
L3 Budget Constraints and Constrained Choice  
R2 Mathematics of Constrained Maximization    
L4 Demand Curves and Income/Substitution Effects  
L5 Production Theory  Problem set 1 due
R3 There was no recitation due to a holiday.  
L6 Costs   
L7  Competition I   
R4  Review Competition and Costs  Problem set 2 due
L8 Competition II   
L9  Supply and Demand; Consumer/Producer Surplus   
R5  Review Construction Problem set 3 due
L10 Welfare Economics  
R6  Exam Review Problem set 4 due 
L11 Monopoly I   
  Midterm Exam  
L12  Monopoly II   
R7  Welfare Economics and Monopoly   
L13  Oligopoly I  
L14  Oligopoly II  
R8 Monopoly and Oligopoly Problem set 5 due 
L15 Input Markets I: Labor Market  
R9  Input Markets Problem set 6 due
L16   Input Markets II: Labor and Capital   
L17  Making Choices over Time   
R10  Mathematics of Intertemporal Choice  Problem set 7 due 
L18 Increasing Savings; Introduction to Trade  
R11   PPF and Comparative Advantage  Problem set  8 due 
L19 International Trade: Welfare and Policy   
L20  Uncertainty   
L21  Efficiency and Equity  
R12  Social Welfare Example  Problem set 9 due 
L22   Government Redistribution and Taxation   
L23  Market Failures I: Externalities   
R13  Exam Review  Problem set 10 due 
L24 Market Failures II: Informational Asymmetry  
L25  Health Economics   

Instructor Insights

Below, Professor Jonathan Gruber describes various aspects of how he teaches 14.01 Principles of Microeconomics.

"You only really understand something when you go out in the real world and apply it."
— Prof. Jonathan Gruber

Professor Gruber wants to train students to think like economists. Economics uses elegant mathematical models to explain how people make decisions and allocate their resources—but all too often those models are taught in ways that remain disconnected from students’ own experience. In an interview on OCW’s Chalk Radio podcast, Professor Gruber shares his thoughts on bridging that gap in his course 14.01 Introductory Microeconomics (the name given to 14.01 Principles of Microeconomics in its version on the MITx platform). He says he tries to anchor learning with real-world examples; as he explains, “You only really understand something when you go out in the real world and apply it.” And those examples, he says, have to be relatable. So rather than discussing companies none of his students have heard of or commodities nobody cares about, he illustrates fundamental economic concepts with examples like Kim Kardashian’s exercise corset, Uber’s policy of surge pricing, and LeBron James’s decision not to attend college. By engaging students with accessible examples of economic principles in action, Professor Gruber helps them develop economic intuition—a sense of how the mathematical models apply in the real, seemingly chaotic world.

Curriculum Information

Prerequisites

None, although some calculus at the level of 18.01 Single Variable Calculus is used in the course.

Requirements Satisfied

Offered

Every semester

Assessment

Grade Breakdown

The students’ grades were based on the following activities:

  • 25% Ten problem sets; only the nine highest scores count toward the final grade
  • 25% Mid-term exam
  • 50% Final exam

Student Information

Enrollment

165 students

Breakdown by Year

Mostly undergraduates, with a few graduate students also enrolled.

Breakdown by Major

The course attracts students from a variety of concentrations.

How Student Time Was Spent

During an average week, students were expected to spend 12 hours on the course, roughly divided as follows:

Lecture

Prof. Gruber’s lecture classes met 2 times per week for 1 hour per session; 27 sessions total; mandatory attendance. Students taking the course in this format also had one recitation per week; students taking the course in an optional section format had three 1-hour section meetings per week in place of the lectures and recitation.

Recitation

Recitations, conducted by the graduate TAs, met 1 time per week for 1 hour per session; these sessions introduced new material in addition to reviewing material from the lectures.

Out of Class

Students spent time out of class completing problem sets and studying for exams.

Course Team Roles

Professor Gruber

Delivering lectures; holding regular office hours

Teaching Assistants (5) 

Teaching MWF sections of the course for students in the section format; leading recitations for students in the lecture-and-recitation format; holding regular office hours.

The handouts contain graphs that are referenced during each lecture. Handouts are not available for lectures 14, 24, and 25. 

Lecture Notes Handouts

Notes for Lectures 1–7 (PDF)

Topics:

Supply and Demand

Consumer Theory

Handout 1 (PDF)

Handout 2 (PDF)

Handout 3 (PDF)

Handout 4 (PDF)

Handout 5 (PDF)

Handout 6 (PDF)

Handout 7 (PDF)

Notes for Lectures 8–17 (PDF)

Topics:

Production and Costs

Welfare Economics

Monopoly

Other Market Structures

Handout 8 (PDF)

Handout 9 (PDF)

Handout 10 (PDF)

Handout 11 (PDF)

Handout 12 (PDF)

Handout 13 (PDF)

Handout 15 (PDF)

Handout 16 (PDF)

Handout 17 (PDF)

Notes for Lectures 18–25 (PDF)

Topics:

International Trade

Uncertainty

Capital Supply and Capital Markets

Equity and Efficiency

Taxation and Redistribution

Social Insurance

Handout 18 (PDF)

Handout 19 (PDF)

Handout 20 (PDF)

Handout 21 (PDF)

Handout 22 (PDF)

Handout 23 (PDF)

Course Meeting Times:

Lectures: 2 sessions / week, 1 hour / session

Recitations: 1 session / week, 1 hour / session

Prerequisites

There are no prerequisites for this course, although some calculus at the level of 18.01 Single Variable Calculus will be used. 

Format

This course is offered in two alternative formats. Both formats use the same materials, cover the same topics, and have the same required homework and exams. 

  1. Lecture-Recitation: Students attend two one-hour lectures by Prof. Gruber, as well as a one-hour recitation. During recitations, instructors will introduce new material, and not simply review past assignments.
  2. Recitation Only: Students attend three one-hour sessions each week. Recitations are taught by graduate students but are organized to closely follow the lecture material so that there is little variation in content or teaching style between sections.

Choosing an Option:

During the first two weeks of the semester, students may switch between formats. At the due date of the first homework, students must declare which section they are in, by attending section and signing in. This will automatically enroll them in that choice. Thereafter a student can change only with special faculty approval. If sessions are extremely unbalanced, the faculty reserves the right to reassign students.

Textbook

There is no formal textbook for the course. If students are interested in further reading, they can look at the following book:

 Perloff, Jeffrey M. Microeconomics, 7th Edition. Addison-Wesley, 2012. ISBN: 9780133456912. 

Course Requirements and Grading

Activity Percentage
Problem Sets 25%
Midterm Exam 25%
Final Exam 50%

Problem Sets

There will be 10 mandatory problem sets which will be individually graded and returned to the students. At the end of the term, students will have the nine best homework grades cumulated and this will count for 25% of the final course grade.

Exams

There will be one mid-term exam held. This will be 2 hours long, and will count as 25% of the grade. There will also be a three-hour final during finals period, which will be cumulative and cover all of the course materials. This will count as the remaining 50% of the grade.  

Individual versus Joint Work

All assignments, including homework and exams, will be submitted and graded individually. Students may work together on problem sets, but they all have to individually write up the answer. Also, collaboration during exams will be considered a breach of academic honesty.

Course Info

Departments
As Taught In
Fall 2018
Learning Resource Types
Lecture Videos
Problem Sets with Solutions
Exams with Solutions
Lecture Notes
Instructor Insights