Магистратура
2018/2019
Микроэкономика I (продвинутый уровень)
Статус:
Курс обязательный (Финансовая экономика)
Направление:
38.04.01. Экономика
Кто читает:
Международный институт экономики и финансов
Где читается:
Международный институт экономики и финансов
Когда читается:
1-й курс, 1 семестр
Формат изучения:
без онлайн-курса
Прогр. обучения:
Финансовая экономика
Язык:
английский
Кредиты:
5
Контактные часы:
60
Course Syllabus
Abstract
Microeconomics I is the first part of the two-semester graduate-level course which provides a rigorous treatment of microeconomic theory and its applications. We first study the decisions of individual economic agents, beginning with the theory of consumer choice and the producer theory. We introduce the concept of duality and analyze it in the context of consumption and production decisions. Afterwards, we study decision-making under uncertainty and introduce the expected utility theory. We also discuss its critiques. The course proceeds with the study of competitive equilibrium and its welfare properties in a general equilibrium setting. Prerequisites: Intermediate Microeconomics, Calculus, Linear Algebra, Probability Theory.
Learning Objectives
- The objective of the course is to provide the students with a thorough knowledge and understanding of the foundations of modern economic analysis. The students will be introduced to the classical results and recent developments in microeconomic theory but the main focus will be on developing their modeling skills and encouraging them to think analytically about realworld phenomena.
Expected Learning Outcomes
- Set up and solve models of consumer choice theory to obtain individual and aggregate market demands for goods
- Analyze properties of demand functions.
- Explain the relationship between observed choices and unobserved consumer preferences
- Set up and solve firm problems, derive and analyze individual and aggregate market supply functions
- Analyze the relationship between properties of technologies and firm production decisions
- Discuss and apply the standard approach to modelling uncertainty in the economics and finance literature
- Set up and solve decision problems involving uncertainty
- Apply the key efficiency concept – Pareto efficiency to evaluate market and non-market allocations of goods and resources
- Set-up and solve the benchmark general equilibrium model, find the equilibrium prices and allocations of goods and compare these allocations to the socially optimal outcomes
Course Contents
- Consumer Choice TheoryThis chapter studies in detail the individual decisions of consumers. First, we consider individual decision making in an abstract setting: the preference-based vs. the choice-based approach. Then, we focus on the optimal decisions of individual consumers. We derive individual demands and work out their properties. We further discuss the duality of utility maximization and expenditure minimization, study the problem of integrability, and analyze the relation between the earlier results and the choice-based approach. We conclude with the issues of demand aggregation.
- Producer TheoryThis part of the course studies the behavior of the firm and develops a theory parallel to the theory consumption analyzed earlier. We study profit maximization and cost minimization, work out the properties of firm’s supply, discuss efficiency in production. The chapter finishes with supply aggregation
- Choice Under UncertaintyWe start by learning how to represent risky alternatives by means of lotteries. Then, by imposing rationality, continuity, and independence on individual preferences we obtain a central result known as the expected utility theorem. We analyze the attitude of different individuals towards risk and discuss some classical measures of risk aversion. We then move to comparing alternative distributions of monetary returns in terms of stochastic dominance. We consider the limitations of the expected utility theory and we provide Savage’s foundation for subjective expected utlity theorem. Violations of Savage axioms lead to a brief discussion of Ellsberg’s paradox and ambiguity aversion.
- General EquilibriumIn this part of the course we consider a competitive market economy in a general equilibrium setting. We formally introduce the notions of Pareto optimality and competitive (or Walrasian) equilibrium and analyze their interrelation summarized in the two fundamental theorems of welfare economics. We study in detail the 2 by 2 exchange economy model and the 2 by 2 (two products, two factors) production economy model.
Interim Assessment
- Interim assessment (1 semester)0.05 * class attendance + 0.61 * exam + 0.05 * homeworks + 0.29 * midterm exam
Bibliography
Recommended Core Bibliography
- Mas-Colell, A., Whinston, M. D., & Green, J. R. (1995). Microeconomic Theory. Oxford University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.oxp.obooks.9780195102680
Recommended Additional Bibliography
- Gibbons, R. (1992). Game Theory for Applied Economists. Princeton: Princeton University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=390677
- Mathematics for economists, Simon, C. P., 1994