Intermediate Microeconomic Theory
Course facts
- Payment: Free, no certificate
- Credits: Non Credit
- Learning style: Self-paced, start anytime
- Resources: Exam Solutions; Exams; Lecture Videos; Problem Sets; Readings
MIT OpenCourseWare details
- As taught in: Fall 2020
- Department: Economics
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Intermediate micro that tests theory with data: consumer choice, risk sharing, mechanism design, trade and Bitcoin, with lecture videos and exams.
Economic theory is tested against data in this intermediate class, which is explicitly not a by-the-book treatment of micro theory. It covers consumer choice, the firm and general equilibrium, then applies them to risk sharing in Indian villages, financial modeling and contract design. It also covers international trade and the design of media of exchange, such as Bitcoin. Lecture videos, problem sets and three solved exams are available.
What You Will Achieve
- Analyze consumer and producer decisions
- Use Pareto optimality and the welfare theorems to judge outcomes
- Apply mechanism design and contract theory to moral hazard
- Use data to test an economic model
Program Overview
Choice and Production
The first lectures build the core tools.
- Preferences
- Income and substitution effects
- Production and profit maximization
- Dynamic optimization
Risk and Contracts
The second part applies them to uncertainty.
- Risk-sharing application
- Financial modeling
- Contracts and mechanism design
- Moral hazard
Equilibrium and Money
The last part looks at the whole economy.
- Walrasian equilibrium and international trade
- Welfare theorems
- Gorman aggregation
- Monetary theory
Course Completion
Job Outlook
These skills support graduate study in economics and analytical work on policy, markets and contract design.
Good for: Students who have taken principles of microeconomics and multivariable calculus and want a research-minded theory class.
Keep in mind: Recitations were part of the class, and the syllabus warns that mastery is hard without them, so check that you can follow them on your own. Linear algebra or statistics also helps.
Bottom line: A theory class that treats economics as a science, with videos and solved exams for self-study.
Frequently Asked Questions
Which exams are published?
Exams 1 and 2, each 80 minutes in the class, and a comprehensive third exam of 120 minutes, all with solutions.
How is grading organized?
The best four of five problem sets count for 30%, three exams for 60% and participation for 10%.
How is it different from a regular theory class?
The syllabus describes two intertwined themes: what economic theory predicts, and how data can test theory while theory helps interpret data.
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