COURSE AIMS AND OBJECTIVES:
Fundamental concepts of economic science, building of fundamental models according to which economic entities behave, equilibrium on the markets of individual factors and products, understanding of general equilibrium, understanding of relation between individual and public interest.
SYLLABUS:
Tool of Analysis
- Demand analysis: deriving demand functions based on the assumption of cardinal measurability of utility, deriving demand functions based on ordinal measurability and assumptions about consumer preferences, deriving demand curves based on revealed preferences, deriving aggregate demand curves, various applications of demand curves, Pareto efficiency in exchange.
- Production analysis: properties of horizontal and vertical intersections of the neoclassical production function, homogeneous production functions, optimal combination of production factors, long-term and short-term expansion curves, returns to scale, economies of scale, Pareto efficiency in production, and derivation of production possibility curves.
- Cost analysis: deriving the long-term total cost curve from the cost minimization model for a given production, properties of the indirect total cost function, using the envelope theorem in comparative static cost analysis, the relationship between long-term and short-term costs, relationships between different cost functions and corresponding returns to scale, and relationships between different cost functions and economies of scale.
Market Structures
- Perfect competition: profit maximization models in the firm in the short and long run, supply functions of the firm and industry in the short and long run, demand for production factors in the short and long run in the firm and industry, efficiency of perfect competition, production efficiency, and general equilibrium under perfect competition.
- Monopoly: profit maximization under monopoly in the short and long run, comparison with perfect competition, price discrimination, natural monopoly, and demand for production factors in the long and short run.
- Classical Oligopoly: (a) non-collusive oligopoly, Cournot model, Bertrand model, Chamberlin model, Stackelberg model, (b) collusive oligopoly: cartels and price leadership.
General Equilibrium and Welfare Economics
- General equilibrium: General equilibrium model with two producers, two production factors, and two consumers, static properties of the model, resource allocation, prices of goods and factors, ownership, and income distribution.
- Welfare economics: criteria for social welfare, maximization of social welfare, determination of the product structure, distribution of goods, and resource allocation that maximize welfare.
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Advanced Microeconomics Theory, G. A. Jehle, P. J. Reny, Addison-Wesley, 1998.
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Microeconomic Theory, A. Mas-Colell, M. D. Whinston, J. R. Green, Oxford University Press, Oxford, 1995.
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Microeconomic Analysis, H. R. Varian, W. W. Norton & Company, 1992.
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Pristupačnost
