Principles of Microeconomics by MIT University

This Principles of Microeconomics by MIT University free MIT course teaches the fundamentals of microeconomics. It covers theories, models, and real-world applications using simple economic principles.

Ideal for students, professionals, or anyone curious about how markets, prices, and choices work in society.

Let’s explore each lecture topic in small, easy-to-read parts of Principles of Microeconomics by MIT University course.

🔹 Introduction and Supply & Demand

You’ll learn what economics is.
Understand how supply and demand interact in a market.
Learn how prices are determined by market forces.

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🔹 Preferences and Utility Functions

This part explains consumer preferences.
Learn how people make choices based on what they like.
Utility functions help explain satisfaction from goods.

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🔹 Budget Constraints and Constrained Choice

Understand limited income and how it affects choices.
Consumers must decide between options within their budget.
It’s about making smart trade-offs.

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🔹 Demand Curves and Income/Substitution Effects

Learn how demand changes with price and income.
Explore the substitution effect—people switch to cheaper goods.
See how income affects purchasing power.

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🔹 Production Theory

This topic explains how firms produce goods.
Inputs like labor and capital are used to create outputs.
Understand production functions and efficiency.

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🔹 Costs

Know how firms calculate production costs.
Fixed costs stay the same, variable costs change.
Marginal cost is the cost of one more unit.

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🔹 Competition I

Explore perfect competition.
Firms are price takers, not price setters.
Understand how markets achieve efficiency with many sellers.

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🔹 Competition II

Look deeper into competitive markets.
Learn how firms maximize profits.
Study short-run and long-run decisions in competition.

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🔹 Consumer and Producer Surplus

Understand the benefits buyers and sellers get from trade.
Consumer surplus = value over price.
Producer surplus = price over cost.

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🔹 Welfare Economics

This topic looks at total well-being in a market.
Efficient markets maximize social welfare.
Understand how government policy can improve or reduce welfare.

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🔹 Monopoly I

Study markets with only one seller.
Monopolies set prices above cost.
See why monopolies lead to inefficiency.

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🔹 Monopoly II

Learn more about monopoly behavior.
Understand price discrimination.
Explore how monopolies adjust for different consumer types.

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🔹 Oligopoly I

Oligopolies are markets with few firms.
Firms react to each other’s moves.
Game theory helps explain competition and cooperation.

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🔹 Oligopoly II

Continue exploring strategies in oligopolies.
Understand collusion and cartels.
Learn about the Nash equilibrium in economic games.

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🔹 Input Markets I: Labor Market

Firms demand labor; workers supply it.
Wages are determined by productivity and supply.
Understand labor supply decisions.

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🔹 Input Markets II: Labor and Capital

Learn how firms decide between labor and machines.
Understand the role of capital in production.
Explore returns to capital and investment.

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🔹 Making Choices Over Time

People make decisions about the future.
Learn about interest rates and present value.
Understand how people value future income or costs.

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🔹 Increasing Savings & Trade Introduction

See how incentives affect saving behavior.
Explore how trade improves efficiency.
Specialization leads to gains from trade.

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🔹 International Trade: Welfare and Policy

Learn how trade affects countries.
Understand winners and losers from trade.
Explore tariffs and other trade policies.

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🔹 Uncertainty

Life is uncertain.
This part explores how people make risky decisions.
Learn about expected utility and insurance choices.

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🔹 Efficiency and Equity

Markets are efficient but not always fair.
Explore how policies can balance fairness and economic efficiency.
Understand trade-offs in policy design.

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🔹 Government Redistribution and Taxation

Governments redistribute income to reduce inequality.
Learn about taxes and transfers.
Understand how taxation affects incentives and markets.

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🔹 Market Failures I: Externalities

Some actions affect others.
Pollution is a negative externality.
Markets fail without government intervention.

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🔹 Market Failures II: More on Externalities

Explore more types of externalities.
Understand how subsidies and taxes can correct them.
See the role of property rights.

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🔹 Market Failures III: Informational Asymmetry

Sometimes, one side knows more than the other.
This causes problems in markets.
Understand adverse selection and moral hazard.

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🔹 Health Economics

Health care has unique market features.
Explore why government and insurance matter.
Understand spending, outcomes, and market failures in health.

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Final Thoughts of Principles of Microeconomics by MIT University free course

MIT 14.01 Principles of Microeconomics, Fall 2018 is a complete introduction to economic thinking.

This Principles of Microeconomics by MIT University course helps you understand:
✔ How markets work.
✔ Why prices matter.
✔ How people make choices.
✔ How government can fix problems.
✔ The trade-offs in policy decisions.

It’s a great starting point for learning economics—whether you’re in school or just curious about how the world works.

✅ Free, structured, and beginner-friendly.
✅ Learn at your own pace.
✅ Taught by top MIT professors.

📚 Take the first step to mastering economics with this free course from MIT!

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