Content and objectives
The basic core of economics lies in micro-economic theory. It provides the underpinnings for the study of virtually all behaviour of economic agents, whether firms or consumers. The basic issue has to do with allocation of scarce resources in order to achieve a goal. For the consumer, the goal is utility maximization; for the firm, profit maximization. In this course, we approach this issue using traditional tools and models. The goal is to provide the students with a solid understanding of the way economists approach these issues, an understanding of how micro-economic models are structured, basic results having to do with firm and consumer behaviour, and a close familiarity with the economist’s traditional toolbox. The course consists of a series of lectures and study sessions. We will have lectures for about an hour which will be followed by study sessions (or tutorials). Due to time constraints we will probably be able to discuss/solve only a few exercises. The remaining exercises are assignment. The first meeting is a lecture. In the study session part of the second meeting we discuss the exercises related to the first meeting (chapter 2). The rest of the meetings are organized in a similar manner. Therefore it is important to do the exercises before the study sessions.

Literature

• Gravelle, H. and R. Rees, Microeconomics. FT Prentice Hall, 2nd edition, 2002. (or 3^rd edition, 2004)

• Chapter 2: Theory of the consumer

• Chapter 3: Duality: the expenditure function and indirect utility function (up to page 55)

• Chapter 4: Sections 4B, The consumer as a supplier of labour; and 4C, Consumption and time

• Chapter 5: Theory of production (up to and including 5D)

• Chapter 6: Cost minimization (up to and including 6D)

• Chapter 9: Monopoly

• Chapter 15: Game Theory

• Chapter 16: Oligopoly