Laurent Alexandre Mathevet

A SURVEY OF NEOCLASSICAL AND CONTEMPORARY THEORIES OF THE PRINCIPAL DETERMINANTS OF PRICES AND OF THE ROLE OF PRICES IN ECONOMIC ORGANIZATION. REQUIRED OF STUDENTS MAJORING IN ECONOMICS. STUDENTS MAY NOT ATTEMPT ECONOMICS 420K MORE THAN TWICE.

PREREQUISITE: ECONOMICS 304K AND 304L WITH A GRADE OF AT LEAST C- IN EACH, AND MATHEMATICS 408C AND 408D, OR MATHEMATICS 408K AND 408L, WITH A GRADE OF AT LEAST C- IN EACH.

RESTRICTED ENROLLMENT; SEE HEADNOTE.

The primary objective of the course is to study contemporary theories of the principal determinants of prices and the role of prices in economic organization. The course will emphasize the fundamental concepts of microeconomics and provide concrete examples of their application. The course will cover the demand and supply theories for competitive markets, some instances of market power, basics of the game theory, choice under uncertainty, and equilibrium in an exchange and production economy.

Intermediate Microeconomics

University of Texas, Austin

Fall 2009

MEETS WITH ECO 420K UNIQUE#33730

Instructor :

Dr. Laurent Mathevet

Office: 3.118 BRB (Econ. Building)

lmath@mail.utexas.edu

Office hours : TBA

F UTC 1.116 2-3.00pm

F UTC 1.116 3-4.00pm

Lectures : MW 2-3.30pm UTC 3.124

Course Description: The objective of this course is to provide analytical tools of

microeconomic theory, and to develop the ability to apply these tools and ideas to

economic situations. We will start by analyzing consumer's choice and behavior. Then

we will study competitive markets, where the interaction between agents takes place.

This will also involve a treatment of the supply side of the economy. Finally, we will

extend the analysis to imperfect competition. To this end, we will cover topics of game

theory and market failures.

Prerequisites: Economics 304K and 304L, or the equivalent, and Mathematics 408C

and 408D, or the equivalent.

Texts:

1. (Required) Varian, Hal R., Intermediate Microeconomics, A Modern Approach,

7th Edition, 2006.

2. (Optional - highly recommended) Bergstrom, Theodore C. and Hal Varian, Workouts

in Intermediate Microeconomics, 7th Edition, 2006.

3. (Optional) Perloff, Jeffrey M., Microeconomics, 5th Edition, 2008.

Grading: There will be weekly homework sets, two mid-term exams (in class, not

cumulative) and a cumulative final exam. All exams are closed-books. Homework

counts for 10%, each mid-term exam counts for 25%, and the final exam counts for

40%. I do not put letter grades on exams or works; instead, they will be graded on a

scale of 100 points. Final grades, however, will be plus/minus letter grades.

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Exam Dates : Midterm 1: Wednesday, October 12th.

Midterm 2: Wednesday, November 16th.

Final Exam: ??

Please make sure that you will be able to attend class on all of the exam dates. Missed

exams will not be rescheduled, and will only be excused without penalty if the absence

is due to a verifiable emergency or some other reason that the university officially

recognizes as legitimate. In this case, the weight of all future exams in the course will

be scaled up proportionally. Exams missed for unexcused reasons will receive a score

of 0.

Homework sets are an important, indispensable part of the course. There is no way

to understand the material without them. I encourage you to work on the problem sets

in study groups, but you should spend time thinking about them on your own as well.

To get any credit, everyone must write up their own solutions.

Other Issues: Attendance in lectures is highly recommended but it is not used in

determining grades. Late homework assignments are not accepted under any circumstances

other than for legitimate reasons. There will be no extra credit work.

UT provides upon request appropriate academic adjustments for qualified students with

disabilities. For more information, contact the Office of the Dean of students at 4716259,

471-4641 TTY.

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Outline of The Class

Day Topic Reading

Demand Theory

Aug. 26 Introduction Chapter 1

Sept. 2, 9 Consumption Set and Budget Constraint Chapter 2

Sept. 9 Preference Relations Chapter 3

Sept. 14 Preferences and Utility Chapter 4

Sept. 14, 16 Choice Chapter 5

Sept. 16, 21 Comparative Statics of the Demand Function Chapter 6

Sept. 21, 23 Revealed Preferences Chapter 7

Sep. 23 Slutsky's Equation Chapter 8

Sep. 28, 30 Consumer's Surplus Chapter 14

Oct. 5 Market Demand Chapter 15

Oct. 7 Choice over Time/Under Risk Chapters 10, 13

Oct. 12 Midterm 1 Material through Oct.7th

Oct. 14 Choice over Time/Under Risk Chapters 10, 13

Oct. 14, 19 Competitive Eq. in an Exchange Economy Chapter 31

Production

Oct. 19, 21 Technology Chapter 18

Oct. 21 Cost Minimization Chapter 20

Oct. 26, 28 Cost Curves Chapter 21

Oct. 28 Firm Supply Chapter 22

Nov. 2 Industry Supply Chapter 23

Nov. 2, 4 Competitive Eq. in a Production Economy Chapter 10 in MWG

Imperfect Competition

Nov. 4, 9 Monopoly Chapter 24

Nov. 9, 11 Oligopoly Chapter 27

Nov. 16 Midterm 2 Material through Nov.11th

Nov. 18 Dominant and Dominated Strategies Chapter 28

Nov. 18, 23 Mixed Strategies Chapter 28

Nov. 23 Nash Equilibrium Chapter 28

Nov. 25 Dynamic Games Chapter 28

Market Failures

Nov. 30 Externalities Chapter 34

Dec. 2 Public Goods and Asymmetric Info Chapters 36-37

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