Graduate Microeconomics Readings

Econ 80a: Microeconomic Theory

Brandeis University Spring 2011

Syllabus Instructor: Nabeela N. Alam (PhD Candidate, Department of Economics) [email protected] Class times: Section 1 MW 3:40 – 5:00pm Section 2 MW 5:10 – 6:30pm Recitation M 6:40 – 8:30pm Class location: Lemberg 54 Office hours: Tue 10:30am – 12:30pm Office location: Sachar, PhD Room Teaching Assistants:

Section 1: Neelanjana Gupta ([email protected]) Tues 6-7pm @ Upper Green Room)

Section 2 Traci Gordon ([email protected]) Wed 1:30-2:30pm @ Upper Green Room

Prerequisites: ECON 8b, MATH 10a (or equivalent) Please note that this class requires knowledge of calculus, and assumes

knowledge of basic microeconomic concepts covered in Econ 2a Course website available on Latte (http://moodle.brandeis.edu). Announcements, assignments, solutions, handouts and all other information will be communicated through course website. Course description: In this course we will study the individual behaviour of economic units such as households and firms. How do consumers make a choice between two goods? How does a firm decide how much to produce and what price to charge? How does firm behaviour change when moving from a competitive market to a monopolistic one? How does the availability of information affect behaviour in markets? The primary tool for analyzing these questions is optimisation theory, and we will apply this in game theory as well. Finally, we will cover some topics in the exciting and rapidly growing field of behavioural economics. Course materials: Required : Hal R. Varian, “Intermediate Microeconomics: A Modern Approach”, 8th edition, Norton Recommended: Robert S. Pindyck and Daniel L. Rubinfeld, “Microeconomics, 7th edition (2008), Prentice Hall

Course requirements and expectations: There are 12 problem sets for this course. These are due at the beginning of class. Late problem sets, meaning those turned in once lecture has begun, will not be graded. In addition there are three exams – 2 midterms and a final exam. The two midterms will take place during recitation hours. The final exam date, time and location are to be determined by the registrar. The exams are non-cumulative, but build heavily on the material covered in prior sections. (See Course Schedule for dates.) Grading: Class Participation (includes attendance) 5% Problem Sets 20% Exam 1 25% Exam 2 25% Exam 3 25% Policy on lateness and missing class: No late problem sets are accepted. Solutions will be posted online as soon as problem sets are due. As a result, flexibility will be in the form of automatically dropping the scores of the two lowest-scoring problem sets. The material covered in class will not necessarily be found in the book, and so it is important not to miss classes. This is not a course where you can expect to ace the exams without coming to class. However, sometimes situations are beyond our control and so you are allowed two unexcused absences from class. Any unexcused absences beyond will cost you credit in the course. Academic Honesty: You are expected to be honest in all your academic work. It is your responsibility to be familiar with Brandeis policies regarding academic honesty as described in the Rights and Responsibilities handbook available at http://www.brandeis.edu/studentlife/sdc/rr/. If you have any questions regarding expectations, please contact me. Disability Information: If you are a student with a documented disability on record at Brandeis University and you wish to have a reasonable accommodation made for you in this class, please see me immediately.

Course Schedule Date L/ R Topic Reading Assignment

Wed, Jan 19 LEC 1 Introduction to Intermediate Micro Ch 1

I. Consumer Theory

Mon, Jan 24 LEC 2 Budget constraints – a form of scarcity Ch 2 PS #1 posted

” REC 1 Math Review Handout

Wed, Jan 26 LEC 3 Preferences Ch 3

Mon, Jan 31 LEC 4 Utility Ch 4

” REC 2 Practice problems/ Problem Set Review

Wed, Feb 2 LEC 5 Choice – Utility maximisation w/ budget constraints

Ch 5 PS #1 due PS #2 posted

Mon, Feb 7 LEC 6 Individual Demand Ch 6


Wed, Feb 9 LEC 7 Slutsky Equation – Income & Substitution Effects

Ch 8 PS #2 due PS #3 posted

Mon, Feb 14 LEC 8 Consumer Surplus Ch 14


Wed, Feb 16 LEC 9 Market Demand Ch 15 PS #3 due

PS #4 posted

Mon, Feb 21 No Class – Midterm Break

Wed, Feb 23 No Class – Midterm Break

Mon, Feb 28 LEC 10 Partial Equilibrium Ch 16 PS #4 due

Mon, Feb 28 EXAM Midterm #1

II. Producer Theory

Wed, Mar 2 LEC 11 Technology – or the Production Function Ch 18 PS #5 posted

Mon, Mar 7 LEC 12 Profit maximization Ch 19

” REC 5 Practice problems/ Midterm #1 Review

Wed, Mar 9 LEC 13 Cost Minimization Ch 20 PS #5 due

PS #6 posted

Date L/ R Topic Reading Assignment

Mon, Mar 14 LEC 14 Cost Curves Facing a Firm Ch 21


Wed, Mar 16 LEC 15 The Supply Decision of Competitive Firms Ch 22 PS #6 due PS #7 posted

Mon, Mar 21 LEC 16 Industry Supply Ch 23


III. Markets

Wed, Mar 23 LEC 17 Monopoly Ch 24 PS #7 due

PS #8 posted

Mon, Mar 28 LEC 18 Price Discrimination by a Monopolist Ch 25 PS #8 due

Mon, Mar 28 EXAM Midterm #2

Wed, Mar 30 LEC 19 Oligopoly Ch 27 PS #9 posted

Mon, Apr 4 LEC 20 General Equilibrium in an Exchange Economy

Ch 31

” REC 8 Practice problems/ Midterm #2 Review

IV. Market Failure

Wed, Apr 6 LEC 21 Externalities

Ch 34 PR Ch18

PS #9 due PS#10 posted

Mon, Apr 11 LEC 22 Public Goods Ch 36 PR Ch18


V. Game Theory and Behavioural Economics

Wed, Apr 13 LEC 23 Game Theory Ch 28 PS #10 due

PS#11 posted

Mon, Apr 18 No Class – Spring Break/Passover

Wed, Apr 20 No Class – Spring Break/Passover

Mon, Apr 25 No Class – Spring Break/Passover

Wed, Apr 27

LEC 24 Game Applications

(Mon schedule) Ch 29 PS #11 due

PS#12 posted

Date L/ R Topic Reading Assignment


Mon, May 2 LEC 25 Behavioural Economics Ch 30


Wed, May 4 LEC 26 Reserve Day PS #12 due

TBD EXAM Final Exam

Graduate Microeconomics Readings

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