Carleton University

ECON 4200, Microeconomic theory, Fall 2002

 

Instructor: Keith Acheson, E-mail keith_acheson@carleton.ca Office A804 of Loeb Bldg

Office hours: Wednesday 10am 1pm; contact me by email to make appointments at other times.

Basis of class assessment

 

Tests and final exam: There will be two in-class tests, each of one hour and twenty minutes, held on Oct. 1, 2002 (worth 25%) and on Oct. 31, 2002 (worth 25%). The final exam will be three hours and held in the formal exam period (worth 50%). The tests and exam will mostly consist of problems.

Note: Students with disabilities requiring academic accommodations in this course are encouraged to contact a coordinator at the Paul Menton Centre for Students with Disabilities to complete the necessary letters of accommodation. After registering with the PMC, make an appointment to meet and discuss your needs with me at least two weeks prior to the each of the class tests. This is necessary in order to ensure sufficient time to make the necessary arrangements. Please note the following deadlines for submitting completed forms to the Paul Menton Centre: November 1st for fall and fall/winter term courses, and March 7th for winter term courses.

Note: Students must fulfill the course requirements in order to achieve a passing grade. Failure to complete any of the course assignments will result in a grade of F. In order to write a deferred exam students must contact Registrarial Services of Public Affairs and Management. For general information on meeting course requirements, see the 2002/2003 regulations on line.

 

Course outline:

 

The general topics with the readings from the text are listed below. Adjustments in what we cover may occur as we proceed. Class lectures and discussions will give guidance as to the relative importance of different subjects. The classes will combine lectures and discussions of problems.

 

The text is Hal R. Varian, Microeconomic Analysis, 3rd edition, Norton, 1992.

 

Topics and readings:

 

1. Production, technology, cost and supply

 

  1. production functions and other depictions of the technology, elasticities of substitution, homotheticity, economies of scale, profit functions, supply, factor demands, elasticities, comparative statics, envelope theorem: Chs. 1,2,3.
  2. cost functions, conditional factor demands, elasticities, substitution measures, scale, duality: Chs. 4,5, 6.

 

2. Demand:

 

  1. utility functions, indirect utility functions, expenditure function, money metric utility function: Ch 7.
  2. price offer curves, income expansion paths, ordinary demand functions, compensated demand functions, endowment constrained demand functions, the Slutsky equation, elasticities, comparative statics, envelope theorem, duality and Roy's identity, comparative statics of the consumer: Chs 7, 8.
  3. labour supply and the demand for leisure, inverse demand functions: Ch. 9.
  4. the expenditure function, equivalent and compensating variations: Ch. 10.
  5. consumer's surplus, integrability, consumers' surplus as an approximation: Chs. 10, 8.5.
  6. consumer choice under uncertainty, demand for risky assets, interest rates under uncertainty: Ch. 11.

 

3. Interactions between economic agents:

 

  1. price-taking markets, equilibrium, welfare properties Ch. 13.
  2. Walrasian equilibrium, exchange, production, technical issues, welfare properties: Parts of Chs. 17,18,21 to be designated by the instructor.

 

4. Monopoly

 

  1. Simple monopoly: output and price, quality, welfare Ch 14
  2. Price discrimination: first, second and third degree, welfare Ch. 14

 

5. Externalities: definition, property rights and Coase, compensation mechanisms: V: 24.