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Principles of Economics for Scientists

Quantitative and model-based introduction to basic ideas in economics, and applications to a wide range of real world problems.

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Course at a Glance

About the Course

The impact of economic forces in our lives is sizable and pervasive. For this reason, it is impossible to understand the social and economic forces shaping our lives without a good understanding of basic economic principles. This course provides a quantitative and model-based introduction to such principles, and teaches how to apply them to make sense of a wide range of real world problems. Examples of applications include predicting the impact of technological changes in market prices, calculating the optimal gasoline tax, and measuring the value of new products.

This is a real Caltech class. It will be taught concurrently to Caltech and on-line students. This has two implications. On the costs side: the class is challenging, highly quantitative, and will demand significant effort. On the benefit side: successful completion of the class will provide you with an in-depth understanding of basic economics, and will permanently change the way you see the world.

Course Syllabus

Week 1. Principles of optimizing behavior.
Week 2. Consumer Theory.
Week 3. Producer Theory.
Week 4. Outcome of competitive markets. 
Week 5. Effects of government intervention in competitive markets: taxes and regulation. 
Week 6. Imperfect competition 1: monopolistic markets.
Week 7. Imperfect competition 2: oligopoly and monopolistic competition.
Week 8. Externalities with and without government intervention.
Week 9. Markets with asymmetric information.

Recommended Background

A strong quantitative background, and basic (univariate) calculus (equivalent of Caltech’s Math 1a).

Course Format

The course consists of video lectures, practice problems, problem sets and a final exam. Every week we will post about 2 hours of video lectures. These videos will include multiple quizzes to help you assess and push your understanding.

The course also includes web-based labs. In each of these labs, students login into a website to participate in a market in which they trade for course credit. The labs are designed to carry out quantitative tests of the theories that we  study in the class. 

Grades will be based on your performance on the weekly problem sets, the labs, the final exam.

You should expect to spend 8-10 hours on the course every week.

FAQ

  • Do I need to buy a textbook?

    No, the course is self-contained. 

  • How much math do I need to know to do well in the course?

    You should have a good understanding of basic calculus including derivation, integration, and maximization of functions. You should also find math enjoyable. If you don’t, this course is not for you.

  • Will I get a certificate after completing this class?

    Students who complete all of the assignments for the course will receive a Statement of Completion from the instructor by email. Important: These statements are not equivalent to receiving official Caltech credit.

  • Can online students interact with the professor and TAs?

    Yes, the professor and TAs will actively participate in the class discussion forum. We will not, however, be able to interact with non-Caltech students through other formats.

  • How will the final exam and problem sets be graded?

    You will enter the answers in the on-line system and they will be graded by the machines.

  • What is the difference between the Caltech and the online version of the course?

    There is no difference in terms of content or grading. However, Caltech students will have access to live office hours and will be able to interact one-on-one with the course staff during the labs.

  • How is this course different from a regular Principles of Economics class?

    The use of calculus allow us to dig deeper into basic economic ideas than in typical introductory economics class.