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Microeconomics 1 (ECO-CO-MICRO1)

ECO-CO-MICRO1

Description

The course examines individual choice and competitive markets. In the first part of the course, we analyze the problem of individual choice, and establish properties of
individual and aggregate demand functions. We also analyze individual choice underuncertainty. In the second part of the course, we investigate what economic outcomes
and allocations are feasible and efficient in competitive markets. We analyze the properties of general equilibrium allocations when consumers and firms trade in
competitive markets.

Learning outcomes     
By the end of this module, students should be able to: 
•    Understand and appreciate the distinction between choice-based and preference-based individual behavior. 
•    Be able to characterize demand, utility, and indirect utility functions. 
•    Understand the “Law of Demand” and its implications 
•    Be able to characterize and solve for general equilibrium in competitive markets.
•    Become familiar with the First and Second Fundamental Theorems of Welfare Economics 
•    Understand the concept of the core of a competitive market.

Assessment
•    Final Exam (90%): The final exam will cover all the material covered in the class, TA sessions and the book chapters assigned to each topic. Students are not permitted to use any outside materials or resources. The Exam will consist of proofs covered in the course materials (or very close proofs using the same logic) or variations of the type of questions in the problem sets/ end of the chapters problems in the textbook. 
•    Problem Sets (10%): 5 problem sets will be distributed during the course. Students are encouraged to work in groups to solve them, but answers must be written up and submitted individually.

Module structure

WEEK 1
1.    Preference and Choice
2.    Consumer Choice

MWG chapters 1 and 2

WEEK 2
1.    Classical Demand Theory
2.    Aggregate Demand

MWG chapters 3 and 4

WEEK 3
Choice under Uncertainty

MWG chapter 6

WEEK 4
Equilibrium and Welfare
MWG chapters 15 and 16

WEEK 5
1.    The Positive Theory of Equilibrium
2.    Core and Equilibria

MWG chapters 17 and 18


Solutions will be uploaded to Brightspace after the submission deadlines

Bibliography and further readings

Main Textbook:

¿    Mas-Colell, Whinston and Green (1995): Microeconomic Theory. Oxford, Oxford University Press (MWG) 

Supplementary Reading: 

¿    Jehle and Reny (2011): Advanced Microeconomic Theory. 3rd Edition, London: Pearson
 

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