Enseignant responsable :
- MARIA LUISA RATTO
Description du contenu de l'enseignement :
This is an advanced microeconomics course. It will provide a formalized exposition of the optimal consumption and production decisions by consumers and firms, which determine the allocation of scarce resources. It will focus on a competitive economy, where agents are assumed to be price takers. The analysis will provide an understanding of how prices are determined by the interaction of the decisions of consumers and firms. The concepts and techniques developed in the course can be used to examine the behaviour of individuals in other economies, e.g. where the intervention of the state is required or in economies with other institutional frameworks (different market or informational structures), as it will be considered in the microeconomics course in the second semester.
Here is a description of the topics of the course:
The theory of the Consumer:
A. The preference ordering
B. The feasible set
C. The consumption decision
D. The comparative statics of consumer behaviour
E. Offer curves and net demand curves
Consumer Theory: duality
A. The expenditure function
B. The indirect utility function, Roy’s identity and the Slutsky equation
C. Measuring the benefits of price changes
A. The production function
B. Variations in scale
C. Variations in input proportions
A. Long-run cost minimization
B. Short-run cost minimization
A. Long-run profit maximization
B. Short-run profit maximization
C. The multiproduct firm
D. The profit function and comparative statics
The theory of competitive markets
A. Sort-run equilibrium
B. Stability of equilibrium
C. Long-run equilibrium
A. Edgeworth of exchange theory
B. Walrasian equilibrium of a competitive economy with/without production
C. Existence of Walrasian equilibrium
D. Stability of Walrasian equilibrium
A. Pareto efficient resource allocation
B. Pareto efficiency and competitive markets
C. Distribution and markets
Maths (linear algebra and optimization problems)
Coefficient : 1
The objective of the course is to provide a comprehensive exposition of modern economic theory on the way consumers and firms make their consumption and production decisions in a competitive economy and on how prices are determined in the market (partial equilibrium). The strong interactions between markets will then be taken into account in the analysis of general equilibrium. Beginning at an intermediate level, the course will present a more formalized exposition of the concepts, preparing students for a more advanced doctoral course.
Students will be provided an intuitive understanding of the economic content of the models, and of their purpose and nature, as well as a clear account of their mathematics.
Mode de contrôle des connaissances :
50%(midterm test result+participation evaluation)+50% final exam result.
Participation evaluation: overall attendance and participation in class and effort to solve exercises on a weekly basis. The mark for participation can vary from -2/20 to +2/20.
Bibliographie, lectures recommandées
· Hugh Gravelle and Ray Rees, “Microeconomics”, 2004, 3rd Edition, FT Prentice Hall
· H. Varian, “Microeconomic Analysis”, Norton & Company, Inc., 3rd edition, 1992
Other suggested readings :
R. Blundell. “Consumer behaviour: theory and empirical evidence – a survey,
Economic Journal, 98, 1988, 16-65.
R.W. Shephard “Theory of Cost and Production Functions”, Princeton University Press, Princeton, NJ, 1970, chs1-3.
D.G.Davis “A note on Marshallian vs Walrasian stability conditions”,
Canadian Journal of Economics and Political Science, 29, 1963.
P.A. Samuelson “Foundations of Economic Analysis”, Harvard University Press, Harvard, 1948, part II.
K.J. Arrow and F.H. Hahn, “General Competitive Analysis”, Oliver & Boyd, Edinburgh, 1971
G. Debreu, “Theory of Value”, John Wiley, New York, 1959.
W. Hildenbrand and A. Kirman, “Introduction to equilibrium analysis, North-Holland, Amsterdam, 1976.
J. Quirk and R. Saposnick. Introduction to General Equilibrium Theory and Welfare Economics, McGraw-Hill, 1968.
A. Takayama, “Mathematical Economics”, 2nd edn, Cambridge University Press, Cambridge, 1985.