This course presents the basic ideas of microeconomic analysis, providing an introduction to issues in policy analysis and management. The first part of the course consists of a positive analysis of private markets, examining consumer choice, the supply and demand of factors and produced goods, and general and partial equilibrium. The second part of the course consists of a normative analysis of markets. This begins with an examination of the conditions necessary for markets to be economically efficient. This is followed by a detailed analysis of market failure, when private markets are not efficient. The strengths and weaknesses of markets are then examined in a broader framework encompassing concerns with information decentralization, incentive compatibility, transactions costs, and non-efficiency criteria such as equity and fairness. Markets are compared in this light with organizational, governmental, and other modes of resource allocation. Grading will be based mainly on 3 exams. Homework assignments and/or quizzes will comprise a smaller part of the grade. Priority access is given to SDS junior and senior students.
