Simon Fraser University
Engaging the World

Course Outlines

Fall 2024 - ECON 804 G100

Advanced Topics in Microeconomic Theory (4)

Class Number: 3819

Delivery Method: In Person

Overview

  • Course Times + Location:

    Sep 4 – Dec 3, 2024: Fri, 9:30 a.m.–12:20 p.m.
    Burnaby

    Sep 4 – Dec 3, 2024: TBA, TBA
    Burnaby

  • Prerequisites:

    ECON 802 and 803 or equivalent.

Description

CALENDAR DESCRIPTION:

The course following ECON 802 and 803 which covers such topics as equilibrium theory, axiomatic analysis, stability analysis, income distribution, dynamic micro models, and models of non-market economics.

COURSE DETAILS:

Description:  This a core course in the first-year Ph.D. program.  Accordingly, it covers portions of microeconomic theory which are needed to do research in any field of economics.  This particular course covers consumer theory, general equilibrium without production, producer theory, general equilibrium with production, and finally, stochastic choice theory.

Content:

Examinations will be based solely on the main text (Mas-Colell, Whinston, and Green (1995)), lectures (lecture notes) and the problem sets. However, students can supplement their understanding with the following material.  Readings have been arranged from the least challenging to the most challenging.

 

The bookstore carries Jehle and Reny (2011) (an advanced undergraduate text), and Debreu (1959) (a challenging and impeccable classic).  None of these books are required.  In addition, Varian (2014b) and Varian (2014a) are available in the bookstore for undergraduate courses (these two books appear to be close substitutes).

 

The content of each lecture is just a guide (i.e., we may need more time in one topic if needed and less in others) however we are going to cover all topics mentioned in this syllabus.

  • Class 1: Choice-based consumer theory. Walrasian demand.
  • Class 2: Comparative statics of demand. The weak axiom of revealed preference (WARP).
  • Class 3: Implication of the WARP. Slutsky matrix.
  • Class 4: Classical preference-based demand theory. Preference relations.
  • Class 5: Utility representation of preferences.
  • Class 6: The utility maximization problem. Walrasian demand correspondences. The indirect utility function.
  • Class 7: Properties of the indirect utility function. Expenditure minimization problem. The expenditure function properties.
  • Class 8: Relationship between the expenditure and indirect utility functions. Hicksian demand correspondence. Properties of the compensated demand. Slutsky matrix for the rational case. Roy's identity.
  • Class 9: Integrability. Recovering expenditure from demand. The strong axiom of revealed preferences SARP. Afriat's Theorem.
  • Class 10: Aggregate demand. Gorman forms. WARP in the aggregate. The representative consumer assumption.
  • Midterm Exam (May change its position depending on the pace of the class).
  • Class 11: Producer Theory. Production set and its properties. The profit maximization problem. Supply correspondence and profit function.
  • Class 12: Properties of supply and profit function. Hotelling's lemma. Matrix of price effects and the law of supply. Cost minimization problem. Conditional input demands, the cost function and properties. Sheppard's lemma. Aggregation theory of the producer.
  • Class 13: Partial Equilibrium Model. Basics of General Equilibrium. Exchange and production functions. Pareto efficiency. The Walrasian competitive equilibrium. The core.
  • Class 14: The first welfare theorem. Price equilibrium with transfers.
  • Class 15: The second welfare theorem.
  • Class 16: Existence of Equilibrium. Properties of aggregate excess demand.
  • Class 17: Local uniqueness of equilibrium. Regular economies. The Sonnenschein-Mantel-Debreu theorem.
  • Class 18: Uniqueness of equilibrium. WARP in the aggregate. Gross substitutes property. Comparative statics and stability of equilibrium.
  • Class 19: Expected Utility Theory. General equilibrium under uncertainty. Arrow-Debreu Equilibrum.
  • Class 20: Sequential trade. Ex-ante and ex-post efficient allocation of risk in the Arrow-Debreu Equilibrium. Arrow securities. Radner equilibrium. Equivalence of Arrow-Debreu equilibria and Radner equilibria under Arrow securities. Market incompleteness.
  • Class 21: Matching.
  • Class 22: Random utility and Logit.
  • Class 23: Behavioral Consumer Theory.

Class 24: Behavioral General Equilibrium.

Grading

  • Problem Sets 10%
  • Midterm Exam 40%
  • Final Exam 50%

Materials

REQUIRED READING:

Mas-Colell, A., Whinston, M.D. and Green, J.R., Microeconomic Theory, Oxford University Press, 1995.  ISBN 9780195102680


REQUIRED READING NOTES:

Your personalized Course Material list, including digital and physical textbooks, are available through the SFU Bookstore website by simply entering your Computing ID at: shop.sfu.ca/course-materials/my-personalized-course-materials.

Graduate Studies Notes:

Important dates and deadlines for graduate students are found here: http://www.sfu.ca/dean-gradstudies/current/important_dates/guidelines.html. The deadline to drop a course with a 100% refund is the end of week 2. The deadline to drop with no notation on your transcript is the end of week 3.

Registrar Notes:

ACADEMIC INTEGRITY: YOUR WORK, YOUR SUCCESS

SFU’s Academic Integrity website http://www.sfu.ca/students/academicintegrity.html is filled with information on what is meant by academic dishonesty, where you can find resources to help with your studies and the consequences of cheating. Check out the site for more information and videos that help explain the issues in plain English.

Each student is responsible for his or her conduct as it affects the university community. Academic dishonesty, in whatever form, is ultimately destructive of the values of the university. Furthermore, it is unfair and discouraging to the majority of students who pursue their studies honestly. Scholarly integrity is required of all members of the university. http://www.sfu.ca/policies/gazette/student/s10-01.html

RELIGIOUS ACCOMMODATION

Students with a faith background who may need accommodations during the term are encouraged to assess their needs as soon as possible and review the Multifaith religious accommodations website. The page outlines ways they begin working toward an accommodation and ensure solutions can be reached in a timely fashion.