MSc Economics / Course details

The aim of this course is to provide a formal (mathematical) introduction to some of the main
principles and ideas of modern microeconomic analysis.

Pre requisite: Registered on MSc Economics and MSc Economics and Data Science

The aim of this course is to provide a formal (mathematical) introduction to some of the main principles and ideas of modern microeconomic analysis.

At the end of this course, students should be able to demonstrate a graduate-levelunderstanding of the main microeconomic concepts covered during the term, as well as the tools and the modelling techniques used to represent economic behaviour. The students should also be aware of how and when to apply the various existing models, as well as the main limitations of them.

Provisional

During the semester, lectures will focus on the following topics:

1. Consumer Theory: utility maximization; first order conditions; Walrasian (Marshallian) demands;
expenditure minimization; first order conditions; Hicksian demands; Slutsky equation; substitution
(income) effect; normal (inferior) good; demand slope (response to price change).

Recommended Readings:
Jehle, G., Reny, P. Advanced Microeconomic Theory. Pearson 3rd ed. (2011), Ch. 1 & 2.
Mas-Collel, A., Whinston, M., Green, J. Microeconomic Theory. Oxford Univ. Press (1995), Ch. 3.

2. Producer Theory: cost minimization; first order conditions; conditional input demands; competitive firm;
profit maximization; first (second) order condition; output supply function; unconditional input demands;
demand (supply) slopes (response to price change).

Recommended Readings:
Jehle, G., Reny, P. Advanced Microeconomic Theory. Pearson 3rd ed. (2011), Ch. 3.
Mas-Collel et al. Microeconomic Theory. Oxford Univ. Press (1995), Ch. 5.

3. General Equilibrium: exchange economy; feasible allocation; Edgeworth box; Pareto efficiency;
Contract curve; core; market system; Walrasian (competitive) equilibrium; Walras’ law; offer curve;
equilibrium existence; excess demand; properties of the excess demand; uniqueness; first welfare
theorem; second welfare theorem; production possibility set; Walrasian equilibrium with production;
existence with production; Pareto efficiency with production; first and second welfare theorems with
production.

Recommended Readings:
Jehle, G., Reny, P. Advanced Microeconomic Theory. Pearson 3rd ed. (2011), Ch. 5.
Mas-Collel et al. Microeconomic Theory. Oxford Univ. Press (1995), Ch. 16 & 17.

4. Social Choice: majority rule; Condorcet’s paradox; social welfare function; Arrow’s conditions
(unrestricted domain, transitivity, IIA, weakly Paretian, no dictatorship); Arrow’s impossibility theorem;
single-peakedness; Black’s theorem; median voter theorem; Pareto indifference principle; strict
welfarism; anonymity; Hammond equity; Ralws’ maxmin principle; utilitarian principle; social choice
function; dictatorship; strategy-proofness; Gibbard-Satterthwaite theorem.

Recommended Readings:
Jehle, G., Reny, P. Advanced Microeconomic Theory. Pearson 3rd ed. (2011), Ch. 6.
Mas-Collel, A., Whinston, M., Green, J. Microeconomic Theory. Oxford Univ. Press (1995), Ch. 21.

 

Lectures and Tutorials

85% final exam

15% midterm test

 Jehle, G., Reny, P. Advanced Microeconomic Theory. Pearson 3rd ed. (2011).
 Mas-Collel, A., Whinston, M., Green, J. Microeconomic Theory. Oxford Univ. Press (1995).