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Microeconomic Theory I

Module description

This is the first module in microeconomic theory, intended for students who wish to pursue doctoral studies in Economics and related subjects or for students who wish to learn microeconomics at a high technical level. Starting with the classic theory of consumer behavior and production, the module also will cover decision theory and general equilibrium theory.

Module aims - intentions of the module

The aim of the module is to develop the basic tools for formally analysing problems of resource allocation used by economists. After completing this module, you will be able analytically represent and solve economic allocation problems.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

• 1. critically evaluate tractable models that form key ingredients of microeconomic problems.
• 2. formally solve analytical models.

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

• 3. critically evaluate current frontier research.
• 4. acquire the analytical skills necessary to transform preliminary ideas into formal models.

ILO: Personal and key skills

On successfully completing the module you will be able to...

• 5. engage in abstract thinking by extracting the essential features of complex systems to facilitate problem solving and decision-making.
• 6. communicate and present complex formal arguments in written form with clarity and succinctness.

Syllabus plan

The first part of the module covers individual decision making (preference and choice, demand theory) and theory of production. The second part is on decision making under uncertainty, introduction to ambiguity and general equilibrium. Below is an indicative plan:

Part 1:
1. Preferences and choice
2. Demand theory
3. Production theory
Part 2:
4. Decision-making under Risk and Uncertainty, von-Neumann-Morgenstern, Anscombe-Aumann, Savage, introduction to ambiguity
5. Risk and Risk Aversion, 1st and 2nd order stochastic dominance.
6. General equilibrium, existence and uniqueness of equilibrium, first and second theorems of Welfare economics

Learning activities and teaching methods (given in hours of study time)

Details of learning activities and teaching methods

Formative assessment

Summative assessment (% of credit)

Details of summative assessment

Details of re-assessment (where required by referral or deferral)

Indicative learning resources - Basic reading

Part 1:
Mas-Colell, A, Whinston, M, Green, J (1995). Microeconomic Theory. New York, Oxford University Press.

Part 2:
Mas-Colell, A, Whinston, M, Green, J (1995). Microeconomic Theory. New York, Oxford University Press.
Wakker, P., (2010), Prospect Theory, CUP, Cambridge.

Key words search

Preferences, demand, production, supply, prices, wealth, risk, uncertainty.