Microeconomic Theory I

RECO 710    Fall 2009

Prof. Kilkenny

Week

topic

Reference  chapter; pages

1

Preliminaries

Logic, notation, functions, derivatives, concavity, convex sets.  Implicit Function Theorem, Envelope Theorem, unconstrained and constrained optimization. FONCs, SOCs.  Value functions.  Reduced forms.

MCWG  Math Appendices Silberberg 1

Chiang   p88

 

2-3

Production Technology

Production possibility set.   Netput vectors, inputs, outputs, transformation and production functions.  Level sets, isoquants, substitution.   Scale.

MCWG   ch 5

J&R  117-126

Varian  ch 1

4

Profit Maximization

Unconstrained optimization. Input demand and output supply functions.   Comparative statics.

MCWG  ch 5

J&R   ch3; 126-137,140-141

Varian  ch2

5

Profit Function

Monotonicity, homogeneity, convexity.  Fundamental propositions about firm behavior.  Hotelling’s Lemma.

MCWG  ch 5

J&R 138-141

Varian  ch 3

6-7

Cost Minimization 

Conditional factor demands.  Shepard’s Lemma. Euler’s Theorem.  Homotheticity and homogeneity.  Returns to scale.

MCWG  ch 5

Varian ch 4-5

J&R ch 3

 

Exam 1 

 

9-10

Utility

Preference axioms, utility function, MRS.  Revealed Preference, WARP, SARP.

MCWG   ch 1; 3; some Ch6

J&R ch1 3-27

Varian ch 7

11

Individual Choice

Budget set.  FONCs, SOCs.  Walrasian and Marshallian demand functions. Comparative statics.

MCWG ch 2

Varian ch 8

12

Expenditure  Minimization

Value function, indirect utility function.  Roy’s Identity, Shepard’s Lemma. Hicksian demand functions.  Income and substitution effects; Slutsky equation and matrix.

MCWG   ch 3

J&R 27-60

Varian ch 9

13-14

Demand Topics

Aggregate and market demand.  Endowments.  Leisure demand and labor supply.

MCWG ch 4: 105-108

Varian 144-154

B&H Ch 17

 

Thanksgiving

 

15

Duality

Integrability. Inverse demand.

J&R ch 2; 71-86

Varian 81-87; 129-131

 

Exam 2   Tues. Dec. 1

 

16

Additional topics:

Competitive Markets, PO & CE. Social Choice

J&R ch 2

MCWG ch 1-2-3, 10, 18, 21

Varian ch 13

 

FINAL  Thurs Dec 10, 9am  

 

Reference acronym key:

B&H                Binger and Hoffman Microeconomics with Calculus

J&R                 Jehle and Reny Advanced Microeconomic Theory

MCWG            Mas-Colell, Whinston, and Green:  Microeconomic Theory