This syllabus may have been updated. To ensure that you're looking at the most recent version, please hit "Reload."

11.210 Microeconomics for Planners


Department of Urban Studies and Planning
Fall, 1998

Course Name: Microeconomics for Planners 11.210

Instructor: Frank Levy (Room 9-515, phone 3-2089)

Assistant: Laura Wilcox (Room 9-519, phone 3-7736)

Teaching Assistants:

Sylvia Dohnert

Peilei Fang

Kathy Yuan

We will set the times of weekly section meetings and the times of office hours for Levy, Dohnert, Fang and Yuan once students know their schedules.

INTRODUCTION: Microeconomics for Planners - The Economics Course Formerly Known as PEP - is designed to give you a good grounding in microeconomics with emphases on areas that are of interest to planners: the spatial location of economic activity, an economic perspective on environmental issues and other potential market failures, the fundamentals of investment decisions, the impact of both computers and globalization on the demand for labor, and so on. The goal of the course is to help you to think naturally about economic concepts like the appropriate role of markets and the meaning of opportunity cost. The broader course goal is to allow you both to do your professional work and to read the newspaper more intelligently.

HOUSEKEEPING: In addition to the regular class meetings, Sylvia, Peilei and Kathy will each conduct a weekly review section. Section meetings are held to help you understand the material presented in lecture, to review problems that arise in the homework, etc. Attendance is optional but at the start of the course, you should attend a few sessions to see if they are useful. The alternative - not attending sessions until a week before the first exam ­ is a short cut to disaster. To keep the workload balanced, we would appreciate your attending the section to which you are assigned - all three t.a.'s are very good.

In addition, we will offer a special weekly tutoring section for students with weak mathematics backgrounds. We are requesting some students to attend this section based on their scores on the summer mathematics screening test. Whether or not we talk to you , if you scored low or if you feel shaky about math, it is better to begin with tutoring and then decide whether you need the extra help.

A final piece of housekeeping: You will see in the schedule below that classes for September 21 and 30 have been rescheduled to accommodate the Jewish High Holidays.

GRADING: Grading for the course will be based graded weekly problem sets (10%), two examinations during the term (20% and 30% respectively) and a final at the end of the term (40%). You may want to form a study group to chew over the weekly problem sets. The risk of study groups is that you can get the right answers based on another person's understanding and so you never actually learn the material. You can reduce this risk by seriously attempting problem set on your own before your study group meets so you are clear on what you do and don't know.

READING: Our text book is Robert S. Pindyck and Daniel L. Rubinfeld (PR) Microeconomics, Fourth Edition, (Prentice Hall), available at the MIT Coop. Additional reading is contained in a two-part xeroxed reader available from Graphic Arts (Basement of Building 3). The first part of the reader should be available now.

For students who want help beyond the textbook, look in the Coop or in other book stores for one of the several paperback "college outline series" on price theory or intermediate micronomics.

The reading list follows below. My plan is to periodically loop back to apply an idea from one context in a different context. For example, the concept of elasticity first comes up in demand theory but it will also prove important in understanding the way in which globalization and computers have affected the labor's bargaining position. Similarly, we will first encounter the concept of returns to scale in production theory but it will also be useful in understanding the structure of urban and regional economies.

DATE

Sept. 9. Introduction and Getting a Sense of a Market PR, Chapters 1. Henry Jacoby, and Robert S. Pindyck Lecture "Notes on Markets and Market Definition" (xerox, Sloan School of Management, revised July 1996).

Sept. 14, 16. Supply and Demand and Elasticity PR Chapter 2 and pp. 117 - 122 . George Anders, "Numb and Number: Once a Hot Specialty, Anesthesiology cools as Insurers scale Back", Wall Street Journal, March 17, 1995, p. 1

September 21 (class postponed to September 25)

Sept. 23. Behind the Demand Curve: The Utility Maximizing Individual and the Concept of Opportunity Cost. PR, Chapter 3 and Sections 4.1 and 4.2

Sept. 25. Utility Maximization Ctd. and the Role of Incentives in Public Policy "The Second Principle......", Chapter 5 in Richard J. Murnane and Frank Levy, Teaching the New Basic Skills, 1996.

Sept. 28. Competitive Markets Analysis, Consumer Surplus PR, Section 4.4 (p. 122-126) and Chapter 9.

September 30 (class postponed to October 9)

Oct. 5 Technology, Costs and Returns to Scale PR, Chapters 6 and 7. David A. Hounshell, From the American System to Mass Production: 1800-1932, Chapter 6 (pp. 217-261). "Five Prinples for Managing Frontline Workers" Chapter 3 in Richard J. Murnane and Frank Levy, Teaching the New Basic Skills, 1996.

Oct. 7. Technology and Costs, ctd

Oct. 9 Markets in Perfect Competition PR Chapter 8.

October 12 (MIT Holiday)

Oct. 14 Perfect Competition Continued Nicholas D. Kristoff, "Real Capitalism Breaks Japan's Old Rules" The New York Times, July 15, 1997, p. 1 ff.

Oct. 19. First Mid Term Exam.

Oct. 21. Firm Behavior with Market Power PR Chapters 10, 11

Oct. 26 Market Power, ctd. PR Section 4.5 (pp. 126-131). "Too Fat to Dance: AT&T's Proposed Link-up with a Pair of Baby Bells is Around Five Years too Early." The Economist Magazine, May 31, 1997. "Netscape Isn't Dead", The Economist Magazine, May 5, 1997.

Oct 28. Oligopoly and Monopolistic Competition PR. Chapter 13

Nov. 2.: Game Theory and Strategy PR Chapter 13

Nov 4: Returns to Scale, Monopoly and the Tools of Locational Economics "Cities", a survey in The Economist, July 29, 1995, pp. 3-18. AnnaLee Saxenian, Regional Advantage, Chapter 3.

Nov. 9: Regional Structure, ctd.

Nov. 11. MIT Holiday

Nov. 16: Globalization, Computers and the Changing Distribution of Earnings.Dani Rodrik, "Has International Economic Integration Gone Too Far" (selected sections), working paper, Kennedy School of Government, 1996.

Nov. 18: Earnings Distributions, ctd.

Nov 23: Second Midterm Examination

Nov 25: The Economics of Uncertainty and Investment Decisions.PD, Chapter 5 and Sections 15.1 through 15.6

Nov. 30: ctd (Housing Investment Case to be Distributed)

Dec.2: Externalities, Public Goods and Property Rights PD Chapter 18. "Schools Brief", The Economist Magazine, December 13, 1986..

Dec 7 and 9: Public Goods: The Internet and Environmental Problems PD. Section 15.7 Jeffrey K. MacKie-Mason and Hal Varian, "Economic FAQs About the Internet", The Journal of Economic Perspectives, volume 8, No. 3, Summer 1994.Tom Tietenberg, Environmental and Natural Resource Economics, (third edition) Chapters 12, 14.

 

| Main Page | This Week's Events | About the Department | Academic Programs | Admissions | Financial Assistance | DUSP Classes | People | Publications | DUSP Grads | Activities | Student Awards |