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Applied Economics for Managers

Course Summary

This course is based on 15.024 Applied Economics for Managers, Summer 2004 made available by Massachusetts Institute of Technology: MIT OpenCourseWare under the Creative Commons BY-NC-SA license.
The fact of scarcity forces individuals, firms, and societies to choose among alternative uses - or allocations - of its limited resources. Accordingly, the first part of this summer course seeks to understand how economists model the choice process of individual consumers and firms, and how markets work to coordinate these choices. It also examines how well markets perform this function using the economist's criterion of market efficiency.

Overall, this course focuses on microeconomics, with some topics from macroeconomics and international trade. It emphasizes the integration of theory, data, and judgment in the analysis of corporate decisions and public policy, and in the assessment of changing U.S. and international business environments.

Reading Material

1. Microeconomics
Parkin, Michael. Microeconomics. 6th ed. Sydney: Addison-Wesley Publishing, 2004. ISBN: 0321226577.
(Click the image below for the link to 8th edition 2007, ISBN: 0321416619)

Course Material

1. Recitation Notes
1. Supply, Demand, and Equilibrium (PDF)
2. Behind the Demand and Supply Curves (PDF)
3. Monopolistic Competition (PDF)
4. Externalities: Theory and Pollution Exercise (PDF)
5. Uncertainty and Asset Prices (PDF)
6. Course Summary (PDF)

2. Recitation Exercises
1(a) Adverse Selection Exercise (PDF)
1(b) Adverse Selection Solutions (PDF)

2(a) Moral Hazard Exercise (PDF)
2(b) Moral Hazard Solutions (PDF)

3(a) Double Marginalization Exercise (PDF)
3(b) Double Marginalization Solutions (PDF)

4(a) Specific Investment Exercise (PDF)
4(b) Specific Investment Solutions (PDF)

Other Resources

1. Reference book: Principles of Microeconomics
Principles of Microeconomics, Libby Rittenberg (Colorado College), Timothy Tregarthen (University of Colorado), published by Flat World Knowledge, April 2009, ISBN 0-9820430-3-1, 978-0-9820430-3-5.

This is a new version of Tim Tregarthen’s highly-acclaimed book on Principles of Microeconomics revised together with Libby Rittenberg and is published by Flat World Knowledge. The online version is free and is professionally formatted for easy reading online. The book can be accessed at the link above.

2. Reference book: Introduction to Economic Analysis
Introduction to Economic Analysis , R. Preston McAfee (CalTech), Tracy R. Lewis (Duke University), published by Flat World Knowledge, March 2009, ISBN 0-9820430-9-0, 978-0-9820430-9-7.

This book contains standard intermediate microeconomics material and some material that, in the authors' view, ought to be standard but is not. The focus of this book is on the conceptual tools and not on fluff. As such, it reflects the approach actually adopted by the majority of economists for understanding economic activity. The online version of the book is available for free access at the above link.


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