ECON41840

Learning Outcomes:

Following completion of this module, students will be able to derive firm and individual demand and supply functions. Students will also be able to use these concepts to evaluate the welfare effects of various policy reforms, using concepts such as equivalent and compensating variation. Students will understand the principles lying behind choice under uncertainty. Applied examples will provide key context.

Student Effort Hours:

Approaches to Teaching and Learning:

Lectures will be delivered face to face. There will also be tutorials addressing the problem sets. Problem sets and exercises will be distributed prior to the tutorials and this material will then be covered in a tutorial.

Online office hours via Brightspace will be provided on request and immediately before exams

Requirements, Exclusions and Recommendations

Learning Recommendations:

It is recommended that students have completed an advanced course in undergraduate microeconomics. Ii is also recommended that students take the bootcamp course in mathematics for economists. Students coming to the course without prior training in economics should preferably have a background in a quantitative discipline such as engineering, physics or mathematics.

Module Requisites and Incompatibles

Not applicable to this module.
 

Assessment Strategy

 

Please see Student Jargon Buster for more information about remediation types and timing. 

Feedback Strategy/Strategies

• Feedback individually to students, post-assessment
• Group/class feedback, post-assessment
• Self-assessment activities

How will my Feedback be Delivered?

Throughout the year, on request, students will get feedback on their tutorial assignments and be provided with details of corrections. For the final exam, on request, students will be given feedback on their exam performance.

Course Textbook: Microeconomic Analysis by H. Varian (3rd ed.). Students are recommended to have regular access to this book.

As secondary coursebooks I will be using Microeconomic Theory by A. Mas-Colell, M. Whinston and J. Green,

and

G. Jehle and P. Remy, Advanced Microeconomic Theory (the first two chapters of this book contain some very useful mathematical background required for graduate level microeconomics).

Other general texts which are useful include:

A. Deaton and J. Muellbauer, Economics and Consumer Behaviour (so old that at this stage it is regarded as a classic text but excellent on consumer theory).

A. Dixit, Optimisation in Economic Theory.

D. Kreps, Microeconomic Theory.



Topics 1-4. Technology, Profit Function, Cost Function, Duality.


Varian, Chp. 1-6.

D. Mc Fadden "Cost, revenue and profit functions" in M. Fuss and D. McFadden Production Economics: A Dual Approach to Theory and Applications.

Mas-Colell et al. Chp. 5.

Jehle and Remy, Chapter 5.


Topic 5. Theory of the Consumer


Varian, Chp. 7-10.

Mas-Colell et al. Chp. 1-4.

Deaton and Muellbauer Chp. 1-2, 8.

Brown, A. and A. Deaton (1972): "Models of Consumer Behaviour: Survey No. 4 in Applied Economics", Economic Journal, Vol. 82, pp. 1145-1236.

Blundell, R (1988): "Consumer Behaviour: Theory and Empirical Evidence - A Survey", Economic Journal, Vol. 98, pp. 16-65.

Jehle and Remy, Chapters 3-4.



Topic 6. Applied Examples (from theory of consumer)

Varian, Chp. 12.

Deaton and Muellbauer Chp. 3.

Deaton, Angus, and John Muellbauer. "An almost ideal demand system." The American Economic Review 70, no. 3 (1980): 312-326.

Banks, James, Richard Blundell, and Arthur Lewbel. "Quadratic Engel curves and consumer demand." Review of Economics and statistics 79, no. 4 (1997): 527-539.

Lewbel, Arthur, and Krishna Pendakur. "Tricks with Hicks: The EASI demand system." American Economic Review 99, no. 3 (2009): 827-863.


Topic 7. Measures of Welfare Change

Varian, Chp. 10.

Mas-Colell et al, Chp. 3.

Deaton and Muellbauer, Chp. 7.4.

Ahmad, E. and N. Stern (1987): "Alternative Sources of Government Revenue: Illustrations from India, 1979-80", in The Theory of Taxation for Developing Countries, eds. D. Newbery and N. Stern, Oxford University Press.

Blundell R., I. Preston and I. Walker (1994): "An Introduction to Applied Welfare Analysis" in The Measurement of Household Welfare, eds. R. Blundell, I. Preston and I. Walker Cambridge University Press.

King, M.A. (1983): “Welfare Analysis of Tax Reform Using Household Data”, Journal of Public Economics, Vol. 21, pp. 183-214.



Topic 8. Economics of Uncertainty.

Varian, Chp. 11.

Deaton and Muellbauer, Chp. 14.

Mas-Colell et al., Chp. 6.

K. Arrow, Essays in the Theory of Risk Bearing, 1970.

Barberis, N., (2013): “Thirty Years of Prospect Theory in Economics: A Review and Assessment”, Journal of Economic Perspectives, Vol. 27, pp. 173-196.

Holt, Charles A., and Susan K. Laury. "Risk aversion and incentive effects." American Economic Review 92, no. 5 (2002): 1644-1655.

Machina, M. (1987): "Choice Under Uncertainty: Problems Solved and Unsolved", Journal of Economic Perspectives, Vol. 1.

--------------- (1982): “‘Expected Utility’ Analysis without the Independence Axiom”, Econometrica, Vol. 50, pp. 277-323.

Pratt, J. (1964): “Risk Aversion in the Small and the Large”, Econometrica, Vol. 32, pp. 122-136.

Rabin, Matthew. “Risk Aversion and Expected-Utility Theory: A Calibration Theorem.” Econometrica 68, no. 5 (2000): 1281–92.

Rabin, Matthew, and Richard H. Thaler. "Anomalies: risk aversion." Journal of Economic Perspectives 15, no. 1 (2001): 219-232.

Timetabling information is displayed only for guidance purposes, relates to the current Academic Year only and is subject to change.