Master degree Economics - International student | Erasmus Mundus QEM » Study programme » First Year » Microeconomics 1
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Quantitative Economics Master - QEM:

 

Microeconomics 1



Number of Credits: 7 credits

 

Hours: 48 hours of Lectures and 36 hours of Tutorials including exams

 

General Presentation. The course deals with individual decision making by consumers and producers, and competitive equilibria and Pareto optimal allocations in pure exchange economies and in production economies.

 

Course Content


- Consumers. Consumption set, preferences, properties of preferences, utility representation, properties of utility functions, examples. Budget constraint, utility maximization problem, competitive demand, properties and computation on some examples. Differential characterization of the demand for a differentiable utility function.

- Producers. Production set, transformation function, production function, examples. Competitive behavior, profit maximization, profit function, supply function, properties. Differential characterization of the supply for a differentiable transformation function. Cost minimization, cost function, demand function, properties. Relationship between profit maximization and cost minimization.

- Pure exchange economies. Definition of competitive equilibrium, properties. An example with two commodities-two consumers: the Edgeworth box. Differential characterization of competitive equilibria. Existence of competitive equilibria. Feasible allocations, Pareto optimal allocations. Existence of Pareto optimal allocations. Differential characterization of Pareto optimal allocations. Pareto optimality conditions in terms of marginal rates of substitution. First and second theorems of welfare economics. 

- Production economies. Private ownership economies, definition of competitive equilibrium, properties. Differential characterization of competitive equilibria. Existence of competitive equilibria. Production economies, feasible allocations, Pareto optimal allocations. Existence of Pareto optimal allocations. Differential characterization of Pareto optimal allocations. Pareto optimality conditions in terms of marginal rates of substitution and marginal rates of transformation. First and second theorems of welfare economics.

 

Books: Mas-Colell, A., Whinston, M.D., Green, J., Microeconomic Theory, Oxford University Press, 1995. Chapters 1-5, 10 and 15-17.

 

Prerequisites: Logic and Sets, Multivariable Calculus and Optimization (concurrently).