Principles of Microeconomics – OCW 14.01
As I grow closer to ready to start the MIT DEDP Micromasters program, I need to start shoring up other skillbases so that I’m confident and strong rather than scrambling when the starting pistol fires. Microeconomics is suggested as a DEDP foundation, and OCW’s 14.02, Principles of Microeconomics, is specifically cited as the go-to resource for brushing up. So, I chose to tackle that course next.
I took an introductory Microeconomics course in community college more than 25 years ago. I remember it as both interesting and fairly easy. In fact, I really enjoyed both Macro and Micro, to the extent that I’d planned on studying Economics for my undergraduate major before I got sidetracked for a quarter century in Southeast Asia. Not that it should come as a surprise to anyone, but I’ll emphasize nonetheless: community college courses are NOT the same as MIT. That couldn’t be better illustrated than by Professor Jonathan Gruber in Principles of Microeconomics.
Professor Gruber eases students into the course in Lecture 1. As one might expect, we touch on what economics is, opportunity costs, supply and demand, positive vs normative economics, and so on. OK, no problem. Then in Lecture 2: Preferences and the Utility Function, we see what a real Econ course (albeit introductory) is at MIT. Theory is explained in terms of pizza and cookies, and substantiated by functions, calculations, and graphs. No time is wasted on verbose pedantry, so the lecture is packed from one end to the other with what you need to know.
Initially, I mapped out the course sequence, identifying which lectures and problem sets coincided, and when to expect the exams. In this way, I stormed through the following 6 lectures:
- Introduction to Principles of Microeconomics and Supply and Demand
- Preferences and Utility Function
- Budget Constraints and Constrained Choice
- Demand Curves and Income/Substitution Effects
- Production Theory
- Costs
I took notes, studied curves, reviewed handouts, and prepared. The course does not provide the recitation videos or notes, which would provide practice applying the concepts covered over each lecture. Upon diving into the first problem set, I realized how important said recitations would be, and how I’d need to make up for not having them.
Each new topic builds upon the previous concepts, and requires proficiency in producing functions, graphing those functions, and quantifying key metrics. None of the math thus far is anything intimidating – basic algebra with some partial derivatives thrown in. But it’s critical to understand how the pieces fit together so that calculations can be executed.
For example, you might be given a utility function and asked to calculate the optimum bundle, i.e. x* and y*. This is done by finding the marginal rates of utility, MUx and MUy, setting the Marginal Rate of Substitution (MRS) -MUx/MUy (simple partial derivatives) to the Price ratio -Px/Py to find the Tangency Condition. With this, you then calculating the value of x or y and then substitute that back into the Budget Constraint m = xPx + yPy to find x* and y*. Again, none of this, at least at this level, is difficult math. But the process must be understood sufficiently to calculate and reflect.
I want to make sure I know all of this. So I’ve fed all my handouts, lecture summaries, and problem sets into ChatGPT Sol and had it design me a study guide, replete with fill in the blank, practiced quizzes, and now, importantly, practice problems for drilling problem sets, each with decreasing scaffolding. ChatGPT is very useful at helping explain concepts, identify gaps in my understanding, and develop study guides. Now, despite lacking the recitations, I’m feeling good. I believe I have a good model in place to move through the lectures and corresponding topics, studying to full understanding. And if I score anything less than a 95% on the mid-term, I’ll go back and drill.
So far, I really enjoy this course. Professor Gruber, despite his poor penmanship, is excellent. He doesn’t dilly-daally or bloviate. He’s rapid fire, but uses great examples, explains sufficiently, and is very clear about what we need to know. So, I’ve not got Economics layered into the study. I’m very excited and very grateful. More good things to come. Stay tuned.