Economics is about more than markets and money. It is a way of understanding how people, businesses, and governments make choices when resources are limited. In Principles of Economics: Supply, Demand, and Optimization, you will develop an economic lens for examining decisions ranging from how you spend your time and money to how global events, public policies, and technological change shape markets and society.

Guided by Harvard Professors David Laibson and Jason Furman, you will explore foundational economic concepts including scarcity, trade-offs, supply and demand, market equilibrium, and optimization at the margin. You will learn to distinguish objective economic claims from value-based judgments, examine how individuals and institutions make decisions, and analyze how changes in economic conditions affect prices and behavior.

Throughout the course, you will also consider how economists evaluate evidence, distinguish correlation from causation, and use tools such as randomized controlled trials and natural experiments to test economic theories. Rather than memorizing ready-made answers, you will build a framework for asking better questions, evaluating evidence, and approaching personal and public decisions as a skeptical, informed citizen.

Syllabus

Apply economic thinking to decisions and trade-offs

Analyze how individuals, firms, and governments allocate scarce resources, including time, health, and financial wealth, to navigate competing priorities.
Apply optimization at the margin by comparing marginal benefits and marginal costs to determine when an activity or investment is worth continuing.
Distinguish between positive economic statements, grounded in testable evidence, and normative statements, shaped by values and judgments.

Analyze how supply and demand shape markets

Construct and interpret supply and demand curves based on willingness to pay and willingness to accept.
Identify how supply and demand interact to determine competitive equilibrium price and quantity.
Predict how external shocks, including technological advances, geopolitical events, policy changes, and global disruptions, can shift supply and demand and alter market outcomes.

Evaluate economic claims using evidence

Differentiate between correlation and causation when interpreting economic data and real-world outcomes.
Assess the causal validity of economic claims using evidence from approaches such as randomized controlled trials and natural experiments.
Use economic frameworks and empirical evidence to critically evaluate claims about individual behavior, markets, and public policy.