Spring 2015, ECONOMICS 101A – MICROECONOMIC THEORY
Time
9:30 - 11:00 am
Location
60 Evans Hall
Instructor:
Office:
515 Evans Hall
Office Hours:
Thursday 12:00n - 2:00pm
E-mail:
Instructor:
Office:
Please see location under office hours below
Office Hours:
Tuesday 1:00 - 2:00pm in 640 Evans Hall and
Tuesday 4:00 - 5:00pm in 542 Evans Hall
E-mail:
Instructor:
Office:
636 Evans Hall
Office Hours:
Wednesday 11:00am - 12:00n
E-mail:
Course Description
Welcome to Economics 101A! This course is meant to introduce you to the world of formal
economic modeling. Economic models are typically made of three components:
• Consumers;
• Firms;
• A market in which consumers and firms interact.
We deal with these three components sequentially. The course starts by introducing consumer
preferences and utility function. We then move on to consider firms and production functions, and
finally we study the market-clearing conditions.
Problem Sets and Answers
Lecture Notes
Outline
1. Who are we?
2. Prerequisites for the course
3. A test in maths
4. Optimization with 1 variable
Outline
1. Questions on Syllabus
2. The economics of discrimination
3. Multivariate optimization II
4. Comparative Statics
5. Implicit function theorem
Outline
1. Implicit Function Theorem
2. Envelope Theorem
3. Convexity and concavity
4. Constrained Maximization
Outline
1. Constrained Maximization
2. Envelope Theorem II
3. Preferences
4. Properties of Preferences
Outline
1. Properties of Preferences II
2. From Preferences to Utility (and viceversa)
3. Common Utility Functions
4. Utility maximization
Outline
1. Common utility functions
2. Utility maximization
3. Utility maximization — Tricky Cases
4. Indirect Utility Function
Outline
1. Utility Maximization II
2. Utility maximization — Tricky Cases
3. Indirect Utility Function
4. Comparative Statics (Introduction)
5. Income Changes
6. Price Changes
Outline
1. Price Changes II
2. Expenditure Minimization
3. Slutsky Equation
Outline
1. Slutsky Equation II
2. Complements and substitutes
3. Do utility functions exist?
4. Application 1: Labor Supply
5. Application 2: Intertemporal choice I
Outline
1. Application 2: Intertemporal choice
2. Application 3: Altruism and charitable donations
Outline
1. Introduction to probability
2. Expected Utility
3. Risk Aversion and Lottery
4. Measures of Risk Aversion
5. Insurance
Outline
1. Mid-Term Feedback
2. Investment in Risky Asset
3. Time Consistency
4. Time Inconsistency
Outline
1. Time Inconsistency
2. Health Club Attendance
3. Production: Introduction
4. Production Function
Outline
1. Production Function II
2. Returns to Scale
3. Two-step Cost Minimization
Outline
1. Cost Minimization: Example
2. Cost Curves and Supply Function
Outline
1. Cost Curves II
2. One-step Profit Maximization
3. Second-Order Conditions
4. Introduction to Market Equilibrium
5. Aggregation
6. Market Equilibrium in the Short-Run
Outline
1. Comparative Statics of Equilibrium
2. Elasticities
3. Response to Taxes
4. Producer Surplus
Outline
1. Consumer Surplus
2. Trade
3. Rent Control
4. Market Equilibrium in The Long-Run
Outline 1. Profit Maximization: Monopoly 2. Price Discrimination 3. Oligopoly?
Outline
1. Game Theory
2. Oligopoly: Cournot
3. Oligopoly: Bertrand
Outline
1. Oligopoly: Cournot
2. Oligopoly: Bertrand
3. Second-price Auction
4. Auctions: eBay Evidence
Outline
1. Dynamic Games
2. Oligopoly: Stackelberg
3. General Equilibrium: Introduction
4. Edgeworth Box: Pure Exchange
Outline
1. General Equilibrium: Introduction
2. Edgeworth Box: Pure Exchange
3. Barter
4. Walrasian Equilibrium
Outline
1. Walrasian Equilibrium II
2. Example of General Equilibrium
3. Existence and Welfare Theorems
4. Asymmetric Information: Introduction
Outline
1. Asymmetric Information: Introduction
2. Hidden Action (Moral Hazard)
3. The Takeover Game
Outline
1. The Takeover Game
2. Hidden Type (Adverse Selection)
3. Empirical Economics: Intro
4. Empirical Economics: Home Insurance
5. Empirical Economics: Retirement Savings
6. Some Advice
7. Course Evaluation
Past Exams
Past Exam Solutions
Past Midterm Exams
Past Midterm Exam Solutions
Announcements
Final Exam: Wednesday 5/13/15, 11:30am - 2:30pm