Material marked with a ** is assigned reading.

1. Introduction, Overview, and Tools

1.1 Overview of the Course

1.2 Microeconomic Models, Comparative Statics, and Optimization

**Nicholson Chapters 1 and 2.

Card, David, and Krueger, Alan B., "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," September 1994, American Economic Review, 84 (4), 772-93.

Card, David, and Krueger, Alan B., Myth and Measurement: The New Economics of the Minimum Wage Princeton: Princeton University Press, 1995.

**Freeman, Richard, "Comment: Review Symposium on Myth and Measurement: The New Economics of the Minimum Wage," Industrial and Labor Relations Review 48 (4) July 1995.

**Kennan, John, "The Elusive Effects of Minimum Wages," Journal of Economic Literature 33 (December 1995), 1950-1965.

2. Choice and the Theory of Demand

2.1 Rationality Axioms, Utility, and Indifference Curves; Constrained Utility Maximization

2.2 Individual Demand, Income and Substitution Effects

2.3 Price Indices

2.4 Market Demand, Substitutes and Complements, and Elasticities

**Nicholson Chapters 3-7.

**Boskin, Michael, et al, "Toward a More Accurate Measure of the Cost of Living," Interim Report to the Senate Finance Committee from the Advisory Commission to Study the Consumer Price Index, September 15, 1995.

**Dwyer, G.P. and C.M. Lindsey, "Robert Giffen and the Irish Potato," American Economic Review (March 1984): 188-192.

Medoff, Marshall H., "An Economic Analysis of the Demand for Abortions," Economic Inquiry, April 1988, 26 (2), 353-59.

**Phelps, Charles E., "Death and Taxes: An Opportunity for Substitution," Journal of Health Economics, March 1988, v7, n1, 1-24.

Smeeding, Timothy, "The Anti-Poverty Effectiveness of In-Kind Transfers," Journal of Human Resources 12, no. 3 (Summer 1977): 365-378.

Assorted newspaper articles.

3. Production and Supply

3.1 Production Functions

3.2 Production Costs and Cost Minimization

3.3 Comparative Statics on Input Prices, Substitutes and Complements, Non-standard Inputs, and Theory of the Firm

3.4 Short and Long Run Costs; Fixed Costs and Sunk Costs

3.5 Profit Maximization, Short and Long Run Supply

3.6 Alternative Models of the Firm

**Nicholson Chapters 11-14.

**Milgrom, Paul, and John Roberts, "The Economics of Modern Manufacturing: Strategy, Structure, and Organizational Change," American Economic Review 1990.

**Milgrom, Paul, and John Roberts, Economics, Organizations, and Management Prentice Hall: 1992, Chapter 1.

4. Prices and Perfect Competition

4.1 Partial Equilibrium Price Determination

4.2 Long-Run Equilibrium

4.3 Applied Competitive Analysis

4.4 Exchange

4.5 General Equilibrium

4.6 Economic Efficiency and Welfare

**Nicholson Chapters 8,15-18.

**Fischel, Daniel, and Edward Lazear, "Comparable Worth and Discrimination in Labor Markets," The University of Chicago Law Review 53 (3), Summer, 1986.

**Krugman, Paul, "The Narrow and Broad Arguments for Free Trade," American Economic Review 83 (2), May 1993, 362-66.

**Krugman, Paul, "Competitiveness: A Dangerous Obsession," Foreign Affairs 73 (2), March-April 1994, 28-44.

5. Imperfect Competition and Market Power

5.1 Monopoly Pricing

5.2 Pricing in Imperfectly Competitive Markets

5.3 Strategy and Game Theory

5.4 Entry Deterrence

5.5 Oligopoly and Collusion

**Nicholson Chapters 20-22.

**McAfee, Preston, and Ray Deneckre, "Damaged Goods," Journal of Economics and Management Strategy, Winter 1995.

*Milgrom, Paul, Auction Theory for Privatization, Cambridge University Press, forthcoming, Chapter 1.

**Schmalensee, Richard, "Entry Deterrence in the Ready-to-Eat Breakfast Cereal Industry," Bell Journal of Economics, Autumn 1978, 9 (2): 305-27.

6. Choice Under Uncertainty

**Nicholson Chapter 9.

Lave, Lester, "The Value of Better Weather Information to the Raisin Industry," Econometrica 31 (January/April 1963): 151-164.

McCloskey, Don, "The Open Fields of England: Rent, Risk, and the Rate of Interest, 1300-1815," in D. Galenson, ed., Markets in History: Economic Studies of the Past (Cambridge University Press, 1989).

7. Limits of the Market

**Nicholson Chapter 26.

*Coase, R., "The Problem of Social Cost," Journal of Law and Economics 3 (October 1960): 1-44.

**Krugman, Paul, "The Tax-Reform Obsession," New York Times Magazine, ?April 1996?.