Ec 10a: Principles of Economics
Harvard's Ec 10a, the microeconomics half of Mankiw's course: markets, welfare, taxation, trade, and the policy debates built on it.
22 units · 112 topics · 493 questions
Ten one-line ideas that quietly run every argument in the rest of the course, from budget lines to a nation's growth rate.
Trade-offs and the Cost of a Free Lunch · Opportunity Cost · Thinking at the Margin · How People Respond to Incentives · +4 more
The scientist's toolkit before the models start: assumptions, circular diagrams, production frontiers, positive vs normative claims.
The Economist as Scientist · The Circular-Flow Diagram · The Production Possibilities Frontier · Positive Analysis, Normative Analysis, and Why Economists Disagree
Why a country that is worse at making everything still gains from trading, once opportunity cost enters the picture.
Absolute Advantage vs Comparative Advantage · How the PPF Moves Once Trade Opens Up · Setting a Price Both Trading Partners Will Accept · Why a Poorer Trading Partner Doesn't Make a Country Worse Off
The single most-used diagram in economics: two curves, where they cross, and the difference between sliding along one and shifting it.
The Demand Curve and the Law of Demand · A Shift in Demand vs a Movement Along It · The Supply Curve and the Law of Supply · A Shift in Supply vs a Movement Along It · +1 more
How much buyers and sellers actually budge when a price moves — the number behind whether a tax collects revenue or kills a market.
Price Elasticity of Demand · What Makes a Good's Demand Elastic or Inelastic · Elasticity and Total Revenue · Price Elasticity of Supply, Income Elasticity, and Cross-Price Elasticity
What happens when a law overrides the price a market would have found on its own, and who actually ends up paying a tax.
Price Ceilings and Rent Control · Price Floors · The Minimum Wage Debate · Who Really Pays a Tax · +1 more
Turning willingness to pay and willingness to sell into areas on a graph, and why the free-market quantity turns out to maximize the total.
Consumer Surplus · Producer Surplus · Why the Market Equilibrium Maximizes Total Surplus · Efficiency vs Equity, a First Look
Every tax loses a little to the deals it prevents from happening at all — the deadweight loss that grows faster than the tax itself.
Deadweight Loss · Deadweight Loss and Elasticity · Tax Size, Deadweight Loss, and Tax Revenue · Calculating Deadweight Loss · +1 more
What a country's price does the moment it opens to world trade, the four pieces of a tariff's welfare cost, and why economists mostly reject import quotas.
The World Price and Opening a Market to Trade · Winners and Losers from Opening to Trade · A Tariff's Four Welfare Areas · Import Quotas · +1 more
When a trade's costs or benefits spill onto people who never agreed to the deal, and the three ways economists try to price the spillover back in.
Negative Externalities · Positive Externalities · Pigouvian Taxes and Subsidies · The Coase Theorem and Private Bargaining · +2 more
Goods nobody can be kept from using, and why that single fact explains everything from underfunded fireworks displays to overfished oceans.
Classifying Goods by Excludability and Rivalry · The Free-Rider Problem · Cost-Benefit Analysis for Public Goods · The Tragedy of the Commons · +1 more
Two rival principles for who should pay, average vs marginal rates, and the trade a society makes between a bigger pie and a fairer slice.
The Benefits Principle vs the Ability-to-Pay Principle · Average Tax Rates vs Marginal Tax Rates · Progressive, Regressive, and Proportional Taxes · The Efficiency-Equity Trade-off in Tax Design · +1 more
The cost curves every firm decision in the rest of the course leans on, and the one point where marginal cost always crosses average cost.
Fixed Costs and Variable Costs · Marginal Cost · Average Total Cost and Where Marginal Cost Crosses It · Economies and Diseconomies of Scale
A price-taking firm's whole decision compressed into one rule, and the two exits it can take when the numbers turn against it.
The Characteristics of a Perfectly Competitive Market · Profit Maximization Where Marginal Revenue Equals Marginal Cost · The Marginal Cost Curve as the Firm's Supply Curve · The Shutdown Decision vs the Exit Decision · +1 more
The one seller with no competitors, the price it actually chooses instead of the highest one imaginable, and the profit it squeezes out by price discrimination.
Why Monopolies Arise · A Monopolist's Demand Curve and Marginal Revenue · Monopoly Profit Maximization · Deadweight Loss from Monopoly · +2 more
Many sellers, each with a slightly different product and a sliver of its own pricing power, competing away their profit through variety instead of price alone.
The Characteristics of Monopolistic Competition · Entry, Exit, and Long-Run Zero Profit · Excess Capacity and the Markup over Marginal Cost · Advertising and Brand Names
A handful of firms who each know a rival will react to every move — modeled with the payoff matrix that explains why cartels keep cheating on themselves.
Duopoly and Strategic Interaction · Collusion and Cartels · The Prisoners' Dilemma and the Payoff Matrix · Nash Equilibrium · +2 more
The same supply-and-demand machinery, run on labor, land, and capital — where a wage or a rent comes from the value of what an extra worker or acre produces.
The Derived Demand for Labor · Marginal Product of Labor and the Value of the Marginal Product · The Labor Demand Curve and the Labor Supply Curve · The Markets for Capital and Land
Why two workers doing similar-looking jobs can earn very different wages, and what the data can and can't tell you about how much of that gap is discrimination.
Compensating Differentials · Human Capital and the Education Wage Premium · Wage Differences from Ability, Effort, and Chance · Measuring Labor Market Discrimination · +1 more
How to actually measure a gap that big — quintiles, a bowed curve, a poverty line — and the leaky bucket every attempt to close it carries.
Measuring Inequality with Income Quintiles · The Lorenz Curve · The Poverty Rate and the Poverty Line · Policies to Reduce Poverty · +2 more
Where the demand curve itself comes from: a budget line pivoting against an indifference map until the best affordable bundle locks into place.
The Budget Constraint · Indifference Curves · The Consumer's Optimal Choice · How a Change in Income Shifts the Budget Line · +2 more
Dropping the assumptions the rest of the course made: shared information, votes aggregating like prices, and people acting perfectly rationally.
Asymmetric Information and Adverse Selection · Moral Hazard · Signaling and Screening · Political Economy and the Median Voter · +2 more