Advanced Microeconomics I (2011)

Last up-dated: July 3, 2011

Office Hours:

Instructor, Yosuke YASUDA: Mondays 10:00-11:30 or by appointment (Room C911)

TA: Ryoko SUSUKIDA: TBA (TBA)

1. Important Announcement

• I finally finished grading the final exam; average/ maximum / minimum scores (out of 200) are 139.2 / 172 / 106.5. Your answer sheets will be returned to your mail-box very soon. Your course grade is A, if your total score is 150 or above, B if 115-149, or C if below 115. Nobody receives D or E. July 3

  • In the final exam, there was a mistake in Question 5 (about envy-freeness). I gave 10 extra-points everyone to correct this problem. Sorry about this.. July 3

  • The final exam solution (file) and the complete solutions for PS3 (file) are uploaded. June 7

  • Solution keys (still incomplete) for PS3 is uploaded (file). June 3

• The third assignment is uploaded (file), which is due on June 3 (TA session). May 26

  • Solutions for PS 2 is uploaded (file). May 25

  • There will be a Final Exam on June 5 (SUN) from 10:00 to 12:00 at room 5F. May 25

  • There will be a TA session on June 3 (FRI) from 10:40 at room 5F. May 25

  • Solutions for PS 1 is uploaded (file). You may bring it to the TA session on May 19. May 14

  • There was a typo in question 3(a) of Problem Set 2: "quasi-concave" => "quasi-convex". (now the file is fixed) May 11

  • There will be a TA session on May 20 (FRI) from 10:40 at room 5F. May 11

  • There will be a TA session on May 19 (THU) from 16:40 at room 5F. May 11

  • The second assignment is uploaded (file), which is due on May 18. May 11

  • The first assignment is uploaded (file), which is due on May 11. April 27

  • There will be a make-up class on May 9 (MON) from 16:40 at room 5F. April 27

  • There will be a TA session on May 2 (MON) from 16:40 at room 5F. April 27

  • There will be NO class on May 5 (Holiday). April 27

  • There will be a make-up class on April 22 (FRI) from 10:40 to 12:10 at room F. April 20

  • The lectures on April 13 will be taught by Ryoko (TA), which complements the first two lectures. April 6

  • The lecture notes 1 and 2 are (slightly) revised and updated. April 6

• The first lecture starts from 9:00 on April 6 (Wed) in room 5F. Look forward to seeing you there! March 29

2. Course Description syllabus

This is an advanced course in microeconomics, emphasizing the applications of mathematical tools and models to the study of individual economic decisions and their aggregate consequences. We begin with a parsimonious set of hypotheses about human behavior and the ways in which individual choices interact, and then examine the implications for markets. This entails treatments and applications of consumer theory and theory of the firm, under the ideal conditions implied by our hypotheses. Course grade will be determined by three homework assignments (45%) and a final exam (55%).

3. Course Outline

1. Logic, sets, and mappings April 6

   1. 1. [JR] Ch.A1

• 1. Topology April 6

     1. • [JR] Ch.A1

• • TA (1): Review on Lectures 1 and 2 April 13

    • • Reading: Ch.1 of Rakesh V. Vohra (2005), Advanced Mathematical Economics.

2. Preferences April 20

• • 1. [NS] Ch.3; [JR] Ch.1; [R] Ch.1

3. Consumer preferences April 20

• • 1. [NS] Ch.3; [JR] Ch.1; [R] Ch.2, Ch.4

4. Demand April 22

• • 1. [NS] Ch.3; [JR] Ch.1, Ch.2; [R] Ch.4, Ch.5

5. Optimization April 27

• • 1. [NS] Ch.2; [JR] Ch.A2

    2. Assignment 1 (due May 11)

6. Consumer problem April 27

• • 1. [NS] Ch.4; [JR] Ch.1, Ch.2; [R] Ch.6

    2. Reading: Ch.2 of Angus Deaton and John Muellbauer (1980), Economics and consumer behavior.

• 1. TA (2): Demand and optimization May 2

     1. [NS] Ch.4; [JR] Ch.A2

     2. Reading: Ch.1 of Ken Binmore (2008), Rational Decisions.

7. Duality May 9

• • 1. [NS] Ch.5; [JR] Ch.2, [R] Ch.6; [JR] Ch.1

8. Production and cost functions May 11

• • 1. [NS] Ch.9, Ch.10; [JR] Ch.3; [R] Ch.7

    2. Assignment 2 (due May 18)

9. Profit maximization May 11

• • 1. [NS] Ch.11; [JR] Ch.3; [R] Ch.7

10. Expected utility May 18

• • 1. [NS] Ch.7; [JR] Ch.2; [R] Ch.8, Ch.9

11. Risk aversion May 18

• • 1. [NS] Ch.7; [JR] Ch.2; [R] Ch.8

• • TA (3): Assignment 1 May 19

  • TA (4): Assignment 2 May 20

• 1. Welfare and allocation May 25

     • [NS] Ch.13; [JR] Ch.5

  2. General equilibrium May 25

     • [NS] Ch.13; [JR] Ch.5

     • Assignment 3 (due June 3)

     • TA (5): Assignment 3 June 3

12. Final exam June 5 120 minutes, 55 points

• 1. Files: exam (solution)

4. Textbooks

Advanced Microeconomics (I and II) does not use specific textbooks. Instead, I provide my own lecture notes, which is downloaded from above course outline.

There are three textbooks which you may find useful to complement my lecture notes. You are encouraged to purchase the first one ([NS]), since it will serve as the main textbook for Advanced Microeconomics III and IV.

[NS] Walter Nicholson and Christopher Snyder, Microeconomic Theory: Basic Principles and Extensions, 10th edition, 2007

[JR] Geoffrey Jehle and Philip Reny, Advanced Microeconomic Theory, 3rd edition, 2011 The copies of related chapters will be distributed in class.

[R] Ariel Rubinstein, Lecture Notes in Microeconomic Theory, 2006. Latest version downloadable from author's page for free

A standard graduate level textbook with full of intuitive explanation is:

[V] Hal Varian, Microeconomic Analysis, 3rd edition, 1992

Those of you look for more lucid treatment than the above textbooks may consult with the following authoritative sources. The former comprehensively incorporates game theoretical perspectives into microeconomics, and the latter is most widely used for microeconomics courses for economics Ph.D. students.

[K] David Kreps, A Course in Microeconomic Theory, 1990

[MWG] Andreu Mas-Colell, Michael Whinston and Jerry Green, Microeconomic Theory, 1995

A classic but still useful textbook for consumer theory and its applications is:

Angus Deaton and John Muellbauer, Economics and Consumer Behavior, 1980

A well-written and highly readable book for optimization techniques is:

Avinash Dixit, Optimization in Economic Theory, 2nd edition, 1990

A more advanced, yet readable book on optimization is:

Rangariajan Sundaram, A First Course in Optimization Theory, 1996

The followings are comprehensive and rigorous textbooks on mathematics for economics, both of which contain variety of economic applications.

Angel de la Fuente, Mathematical Methods and Models for Economists, 1999

Efe Ok, Real Analysis with Economic Applications, 2007

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