北京大學匯豐商學院

Peking University Graduate School of Business

高等微觀經濟學 I

Advance Microeconomics I

Fall 2008

Instructor: Dr. Wei-Min Hu                                                                   

         (a) to acquire a working knowledge of modern microeconomic theory; 

         (b) to develop the ability to model and formally analyze economic issues, and

         (c) to gain familiarity with the use of theoretical tools in empirical work.

Textbook

Andreu Mas-Colell, Michael D. Whinston and Jerry Green, Microeconomic Theory, New York: Oxford University Press, 1995.

                                               OTHER BOOKS

The purpose of this class is to introduce the student to more advanced methods in economic modeling. Some students who do not have enough of a background in mathematics or higher level economics may find this class challenging. However, this insufficiency can be easily remedied by consulting an intermediate microeconomics textbook, such as Hal R. Vrian's "Intermediate Microeconomics" (7th edition, 2005), which provides simpler versions of many of the ideas that will be presented in class. In addition, Hal Varian has also written a graduate level textbook (Microeconomic Analysis) which is a great complement to our class materials.

syllabus

1. Introduction

                Microeconomics. Positive and normative analysis. The choice approach and the preference approach. 

2. Consumer choice

                Consumption sets. Budget sets and the budget equality. Walrasian demand. Cournot and Engel aggregation. Elasticities. The weak axiom of revealed preference. The law of compensated demand and the negative semidefiniteness of the Slutsky matrix.

3. Classical demand theory

                Preferences and utility. Utility maximization. Walrasian demand. The indirect utility function. Expenditure minimization. The duality theorem. Hicksian demand and the expenditure function. The negative semidefiniteness and symmetry of the Slutsky matrix. Jevonsian demand.  Integrability. Evaluation of economic changes: the equivalent and compensating variations. Deadweight losses. 

4. Aggregate demand

                Aggregate demand and aggregate wealth. Indirect utility functions of the Gorman form. Positive and normative representative consumers. Potential compensation. Social welfare functions.

5. Production

                The objectives of firms. Technology: production sets, transformation functions and production functions. The absence of market power. The profit maximization problem. The cost minimization problem. Technology aggregation.

6. Uncertainty

                Actions, outcomes and ex ante preferences. The independence axiom and Allais paradox. Expected utility theory. Risk aversion. Who is more risk averse? Contingent commodities. Insurance and portfolio choice. Absolute risk bearing and wealth. Stochastic dominance. 

grading

9 Homework problem sets @ 2 points each 18 points

1 Midterms @ 37 points                          37 points

1 Comprehensive final examination               45 points

                                               TOTAL 100   points