14.04 - Intermediate Microeconomic Theory
14.04 Intermediate Microeconomic Theory (Fall 2020, MIT OCW). Instructor: Prof. Robert M. Townsend. This course provides an introduction to theory and data designed to meet the needs of students interested in economic science. It provides an introduction to consumer choice, the theory of the firm, and general equilibrium models, with an overview of the main results and tools used in studying these topics, both directly in economics and indirectly in various other fields. This includes analysis of consumer and producer decisions, partial and general equilibrium analysis, insurance, the welfare theorems and failures of these theorems as with externalities but with resolutions, contract theory and mechanism design, policy analysis, the content of theory for data, and the design of media of exchange as with Bitcoin and markets made possible by distributed ledgers. (from ocw.mit.edu)
| Lecture 04 - Production and Profit Maximization |
Instructor: Prof. Robert M. Townsend. How do profit maximizing firms decide on the level of employment, and on their input/output mix more generally? The problem is broken down into its component parts: feasible production technology, and the prices of inputs and outputs. Predictions are made for individual firms' responses to domestic price changes with implications for profits. Surprisingly, the same constructs can be used for economy-wide responses to international tariffs, with implications for household welfare.
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