Nir Dagan / Teaching

Economic Theory I

Academic year 1997/98

Nir Dagan, Esther Hauk, and Albrecht Ritschl

• Solution of the final exam
• The TAs for my class are Mr. Masanori Sakurai and Mr. Yury Yegorov.
• Syllabus
• Problem sets:
  • Problem set 8. Due June 15, 1998
  • Problem set 7. Due June 8, 1998
  • Problem set 6. Due May 25, 1998
  • Problem set 5. Due May 18, 1998
  • Problem set 4. Due May 11, 1998
  • Problem set 3. Due May 4, 1998
  • Problem set 2. Due April 27, 1998
  • Problem set 1. Due April 20, 1998

Syllabus

Consumer theory

The consumer's problem: Basic setup

The budget constraint, preferences, and the presentation of preferences with a utility function.

The consumer's choice

Preference maximization, and the demand function

Revealed preferences and the Slutsky equation

The weak and strong axioms of revealed preferences. Price indices, Slutsky equation. The substitution and income effect.

Consumer surplus and market demand

Consumer surplus: indivisible and perfectly divisible goods. Quasi-linear utility functions. Aggregation of individual demand functions. The price elasticity of demand, and its relation to revenue.

Firms and Production

Production

Technology: production functions. Marginal productivity and the rate of technical substitution. Returns to scale.

Profit Maximization

Profit maximization and cost minimization. Cost functions. Marginal and average cost.

Supply functions

Supply of a competitive firm. The relationship between supply and marginal cost. Producer surplus. The industry supply curve.

Equilibrium

Equilibrium

Competitive equilibrium in a market. Entry and "normal" profits. Comparative statics, welfare, taxation, and redistribution.

Major Textbook

• Hal R. Varian, Intermediate Microeconomics: A Modern Approach (3rd edition) W.W. Norton & Company, New York, NY. 1993.