This is a course for undergraduates. In the spring semester we will cover production theory. We will go over the supply curve in the competitive market. Then we will analyze markets where firms have some price-setting power. This naturally leads us to the basics of game theory. We will intuitively understand why a competitive market is efficient. After that, we will see how externalities, public goods and asymmetric information may lead to inefficiency and how to alleviate some of it.