DEPARTMENT OF ECONOMICS
ECONOMICS 2113
Intermediate Microeconomic Theory 1
Fall 2013
TIME:
Mon, Wed, Fri at 9:30am – 10:30am
Instructor:
Oluyele Akin. Akinkugbe
Office:
BAC 344
Phone:
585 1240
E-mail:
oluyele.akinkugbe@acadiau.ca
Office Hours:
Tuesdays and Thursdays: 3:00 – 5:00PM
CLASSROOM: BAC 204
Course Description: This course builds on the basic knowledge of consumer and producer
theory that students have obtained earlier, by examining seven to eight important topic areas that
often form the bases of higher levels of economic analysis. Undergraduate level microeconomics
equips students with understanding microeconomic theory using graphical analysis, and to a
limited extent, functional relationships. Because of the simplifications adopted however, students
are not yet able to actually test these relationships. Intermediate level microeconomic theory
bridges this gap. Microeconomics is also made more realistic at this level by relaxing some of
the assumptions used at lower levels, such as the static assumption, and by introducing the
element of time. This course therefore provides a more rigorous grounding in Microeconomic
theory with some real world applications.
Synopsis: Topics to be covered include:- Consumer Theory and Markets; Intertemporal decision
making; Uncertainty and its implications in the decision making processes; Producer Theory;
General equilibrium analysis, the effects of market power and market failure; Externalities and
Public goods; Welfare and social choice.
Please note that materials are generally widely covered in the required text for this course; we
will be as swift and efficient with time as possible in class. We certainly cannot attempt to talk
about everything in the textbook.
The text is well stocked in the bookstore; also widely available. I similarly have posted a soft
copy on ACORN for your use. Further, a number of substitutes exist and have been listed;
however they do vary in their mathematical sophistication and notations. As much as practically
feasible, a selection of readings and course materials will be made available via ACORN.
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Activities:
Evaluation:
1.
2.
3.
1.
2.
3.
4.
Formal Lectures
Assignments and Presentations
Test/Quizzes
Two midterms 30%
(Friday October 25th and Wednesday November 27th)
Comprehensive Final Exam (TBA):
Surprise In-Class Quizzes (Best 2 out of 4 quizzes @ 5% each):
Assignments/Presentations:
Total:
40%
10%
20%
100%
There will be NO make-up for a missed quiz and/or midterms. If you are unable to write an
in-class quiz or midterm due to illness or for compassionate reasons, please advise me in writing
(along with a doctor’s note, if applicable) stating your name, your student ID and an e-mail
address where you may be contacted within three days of the exam. The weight of missed test for
such cases will be added towards your final exam.
Other Course Requirements: Regular attendance is absolutely necessary to be up-to-date with
the course material. Similarly, all assignments must be handed in by their specified date, and
presentations should of necessity be well-researched and well laid-out. Students are responsible
for keeping track of dates (for assignments, tests, etc.) and also for the material covered in each
class (even when they are absent).
Course Outline: We will cover the following topics during the weeks noted. Note that the
specific weeks and materials covered are subject to change given the pace of this class. Please,
consider this course outline as tentative.
Weeks
1-2
3-4
Topics
A. The Economic Problem briefly Revisited: Resource Allocation
B. Consumer Theory:
Budget Constraint
Preferences
Utility
Texts & references
Hall Varian (8th Edition) Chs. 2 - 4
Consumer Theory…
Choice
Demand and Exchange
Texts & references
Hall Varian (8th Edition) Chs. 5, 6 & 8;
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5-6
Consumer Theory…
Market Demand
Equilibrium
Texts & references
Hall Varian (8th Edition) Chs. 15, 16 and 31;
7
Consumer Theory…
Intertemporal Decision Making – Introduction; The
two-period decision model and intertemporal budget
constraint;
Human Capital and the Demand for
Education; Intertemporal choice and capital markets
Texts & references
Hall Varian (8th Edition) Ch. 10;
H and Q - Ch. 12
Nicholson - Ch. 9
Binger and Hoffman - Ch. 18
Dasgupta & Heal G. - Economic Theory and Exhaustible
Resources
8
9 - 10
Consumer Theory…
Uncertainty – Expected Utility and the vnM index;
Insurance and Gambling.;
Texts & references
Hal Varian, Ch. 12
Hargreaves-Heap et al Chaps 3-4
B. Theory of Production
Technology
Profit Maximization and Cost Minimization
Firm Supply and Industry Supply
Texts & references
Hall Varian (8th Edition) Chs. 18 - 23
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General Equilibrium (Pure exchange system and with
Production) using the Edgeworth Box; Walras’s Law;
Multimarket equilibrium; the first and Second Welfare
theorems.
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Texts & references
Hall Varian (8th Edition) Chs. 31 & 32
Browning, E.K. and Zupan, M.A. – Ch. 14
12
C. Externalities and Public Goods
Smokers and non-smokers; Optimal levels of externalities;
Optimal allocation of externality that affects consumer
utility; Optimal provision of pure public goods; Coase
bargaining and model of the right to pollute; Tragedy of
the commons.
Texts & references
Hall Varian (8th Edition) Chs. 34 & 36
Browning, E.K. and Zupan, M.A. – Ch. 20
Nicholson - Ch. 25
Maddala and Miller - Ch. 19
Mansfield - Ch. 16
Malinvaud - Ch. 9
D.
13
Welfare and Social Choice
Social welfare functions; Welfare maximization; Envy
and Equity.
Texts & references
Hall Varian (8th Edition) Ch. 33
Browning and Browning - Ch. 18
Henderson and Quandt - Ch. 11
Russell and Wilkinson - Ch. 17
TEXTBOOKS
REQUIRED:
Varian Hal, R. Intermediate Microeconomics: A Modern Approach(8th edition), New
York: W.W. Norton 2010.
Supplementary Texts
1.
Binger, B.R. and Hoffman E., Microeconomics with Calculus, Harper Collins, 1998.
2.
Nicholson, W., Microeconomic Theory: Basic Principles and Extensions, (6th ed).
Chicago: Dryden Press 1992.
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3.
Henderson, J.M. and Quandt, R.F., Microeconomic Theory, (3rd ed) New York/London:
McGraw Hill, 1990.
4.
Browning, E.K. and Zupan, M.A. (2006). Microeconomics: Theory and Application (9th
ed.)
5.
Hope, S. (1999). Applied Microeconomics, Willey (4th ed.)
6.
Layard, P.R.G. and Walters, A.A. Microeconomic Theory, New York: McGraw Hill,
1978.
7.
Russell, R.R. and Wilkinson, M. Microeconomics: A Synthesis of Modern and
Neoclassical Theory, New York: John Wiley and Sons Ltd., 1979.
8.
Green, H.A.J. Consumer Theory (revised edition) London: Witherby and Co. 1976.
9.
Phillips, L. Applied Consumptions Analysis (second edition). Amsterdam: North-Holland
Press 1983.
10.
Singh, Squire and Strauss (eds) Agricultural Household Models: Extensions, Applications
and Policy. Baltimore John Hopkins University Press, 1986.
11.
Malinvaud, E. Lectures on Micro-economic Theory (revised edition). Amsterdam: North
Holland Press, 1985.
12.
Friedman, Lee S. (2002). The Microeconomics of Public Policy Analysis, Princeton
University Press.
Academic Regulations and Ethics
It is the responsibility of students to familiarize themselves with the University’s policy on
academic ethics. Copying, plagiarism and other academic offences will not be tolerated.
Penalties are severe and may result in suspension from a program/course and expulsion. A
complete list of Academic Regulations can be found on the Policies page of the University’s
website.
http://www.acadiau.ca/regisrar/Current Calendar/Intro/acade.pdf
It is a serious offence to engage in academic misconduct.
Disability and Access
If you are a student with a documented disability who anticipates needing accommodations in
this course, please inform me after you meet with Jill Davies (jill.davies@acadiau.ca 585-1127)
or Kathy O’Rourke (disability.access@acadiau.ca 585-1823) in Disability Access Services, in
the Student Resource Centre, which is on the lower floor of the Old SUB (Old Student Union
Building).
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