Microeconomic Theory
sgifford@business.rutgers.edu
(973) 353-1646
OFFICE HOURS: Mon., 4-5, 129 MEC
or by appointment
Fall 2007 26:223:552:01
Prof. Sharon Gifford
Mon. 5:30-8:20 Hill Hall 208
Newark
SYLLABUS
TEXT: Microeconomic Theory, Andreu Mas-Colell, et al., Oxford University Press, New York
(1995, only edition). A supplementary text is Microeconomic Theory, by Walter Nicholson,
Dryden Press (8th or 9th edition). This book comes with a useful study guide. These books have
been ordered by the bookstores, but you are encouraged to obtain the books on line ahead of
class. In addition, you may want to purchase A Course in Microeconomic Theory by David M.
Kreps, Princeton University Press.
CLASS NOTES AND TRANSPARENCIES: These can be downloaded and printed from
Blackboard 6. If Blackboard is down, you can get the same files from
http://andromeda.rutgers.edu/~sgifford/phdmicro.
GRADE: 2 Midterm exams 20% each, Final exam 40%, Class Participation 20%.
EXAMS: Exams will be problem solving and short essay. There will be sample exams on Bb
with solutions. You will be allowed to bring one sheet of paper (8 1/2" by 11") with notes to the
exams.
CLASS PARTICIPATION: Attendance will be taken each meeting. Each student will be
required to present a problem assignment and explain it to the class. Contributions to class
discussion will also be counted towards the class participation grade. In addition, there is a
discussion board on Blackboard. Contributions to questions (detailed) or answers count toward
participation.
SUGGESTIONS FOR STUDYING: Read the chapter assigned in Mas-Colell before class,
even if you don’t understand it. You will be better prepared to ask questions. Use the other
textbooks as supplementary reading on the same topics. Nicholson provides a simpler exposition
and useful practice problems, with solutions, in each chapter and a mathematical methods review
in Chapter 1. Kreps provides a more intuitive approach to each topic.
FURTHER READING: Fundamental Ideas of Analysis and How to Read and Do Proofs: An
Introduction to Mathematical Thought Processes, Michael C. Reed and Daniel Solow.
ISBN: 0-471-31415-3 Price: $86.95 (for the set of two books)
John Wiley & Sons, Inc.,Distribution Center, 1 Wiley Drive, Somerset, NJ 08875-1272
732-469-4400 (toll free): (800) 225-5945 Fax: 732-302-2300, Email: catalog@wiley.com
COURSE OUTLINE
Week
Week
Week
Week
Week
1
2
3
4
5
Sept. 10
Sept. 17
Sept. 24
Oct. 1
Oct. 8
Week 6
Week 7
Week 8
Week 9
Week 10
Oct. 15
Oct. 22
Oct. 29
Nov. 5
Nov. 12
Week 11
Week 12
Week 13
Week 14
Nov. 19
Nov. 26
Dec. 3
Dec. 10
Preferences and Choice Ch. 1
Consumer Choice Ch. 2
Classical Demand Theory Ch.3
Classical Demand Theory Ch. 3
Midterm Exam 1 (one hour)
Aggregate Demand Ch. 4
Production Ch. 5
Choice Under Uncertainty Ch. 6
Competitive Markets Ch. 10
Competitive Markets Ch. 10
Midterm Exam 2 (one hour)
Market Power Ch. 12
Adverse Selection Ch 13
The Principal-Agent Problem Ch 14
Review
Final Exam
Assignments
(M-C refers to chapters in Mas-Colell, et.al.; N refers to examples in Nicholson)
I. Individual Decision Making
Week 1
Preferences and Choice (M-C: Ch.1) (N: 3.1- 3.4)
Week 2
Consumer Choice (M-C: Ch 2) (N: 4.1, 7.2 - 7.4)
Week 3
Demand Theory (M-C: Ch 3, through section G) (N: 4.2 - 4.5, 5.1 - 5.4)
Week 4
Demand Theory (M-C: Ch 3, through section G) (N: 6.1)
II. Market Analysis
Week 5
Week 6
Week 7
Week 8
Week 9
Week 10
Week 11
Week 12
Week 14
MIDTERM 1 (M-C: Ch 1-3)
Aggregate Demand (M-C: Ch 4)
Production (M-C: Ch 5) (N:11.1 - 11.3, Cases 1-4;12.1 - 12.3)
Choice Under Uncertainty (M-C: Ch. 6) (N: Ch. 8)
Competitive Markets (M-C: Ch 10) (N: 14.1 - 14.4,
Competitive Markets (M-C: Ch 10) (15.1 - 15.3)
MIDTERM 2 (M-C: Ch 4-6, and10)
Market Power (M-C: Ch 12, through section E) (N: 18.1, 19.1, 19.3)
Adverse Selection (M-C: Ch 13) (N: 9.3)
The Principal-Agent Problem (M-C: Ch 14 A and B) (N: 9.2)
FINAL EXAM (M-C: 12-14)
Errata in Microeconomic Theory, Mas-Collel, et. al.
p. 26: Figure 2.E.4, “good 2 is a Giffin good.”
p. 38 (last line): px>w should be p'x>w'
p. 39 (6th line): x'  x(p,w) should be x  x(p,w)
p. 53: equation (3.D.1), “cl” should be “xl”
p. 120: definition of B should be {…:u(x)  u(x-)}
p. 393: Exercise 12.C.6 should be Exercise 12.C.2, etc.