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Microeconomic Principles

This page introduces materials that have been developed for a Microeconomics Principles course. Most of the core topics from an introductory microeconomics course are included. The main models are competitive markets with many producers and many buyers, monopoly markets with a single seller and many buyers, and oligopoly markets with a few sellers and many buyers. Analysis of these three types of markets is typically known as "market structure," which is a key element of the microeconomic principles curriculum. Other key topics are the model of consumer choice that is the basis for consumer demand and the model of firm production that is the basis for producer supply. The market structure models are also applied to several problems in taxation and government regulation of markets.

The market structure models are all described with formal models and the predictions of the models are assessed with experiments. The models are simple, and their predictions form the basis for the analysis of the experiment results. In the experiments students are able to participate directly in the trading process for the market, and experience first hand the interactions between buyers and sellers that lead to the predictions from the market structure models. The lecture and exercise materials on the market models and on the market experiments are closely linked to one another, so that they reinforce one another.

These topics are organized with separate starting pages. Reading materials and student exercises are included as links, typically to PDF documents and to Excel spread sheets. Student lecture notes are contained in a separate PDF document "Microeconomic Principles with EconPort Experiments." When experiments are included for a topic, lecture materials describe the experiment. The experiment configurations though are linked on a separate page which the instructor can access in order to set up the experiment for the class.

Course Contents

The lecture notes cover most of the key topics in a microeconomic principles course. Many of the topics also include experiments to illustrate the economic concepts. Currently, the competitive market model and its application to taxation, and the monopoly and duopoly model are developed in conjunction with market experiments.

One useful pedagogical feature of the market experiments described below deserves emphasis. The three market structure models - competition, monopoly, and duopoly - all use the same basic schedule of buyers' values and the same aggregate schedule of sellers' costs. In the competitive market, the sellers' costs are spread out among several sellers. In the monopoly, the same costs are all ehld by a single seller. In the duopoly model these costs are split between two sellers. The advantage to this approach is that the outcomes in all three models are directly comparable. Prices should increase as the number of sellers decreases, and both the quantity traded and the surplus extracted should decrease as the number of sellers decreases.

  1. Competitive market model (Exp)
  2. Taxes in the competitive market model (Exp)
  3. Consumer's preferences, utility, and demand
  4. Production functions, cost functions, and supply
  5. Competitive market model in the long-run
  6. Monopoly market model (Exp)
  7. Duopoly market model (Exp)

 
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