Aperçu des sections

  • Microeconomics 1

    Elena L. del Mercato (Elena.delMercato@univ-paris1.fr)
    Homepage: http://www.parisschoolofeconomics.eu/en/del-mercato-elena/

    Class:  Every Monday 14:00-15:30 (Course), 15:30-17:30 (TD), and Wednesday 9:30-11:00 (Course), 11:00-13:00 (TD) - Room 117, CES

    General Presentation

    The course deals with individual decision making by producers and consumers, and competitive equilibria and Pareto optimal allocations in pure exchange economies and in production economies.

    References

    • Mas-Colell, A., Whinston, M.D., Green, J., Microeconomic Theory, Oxford University Press, 1995. Chapters 1-5, 10 and 15-17.
    • Microeconomis 1, Class Notes QEM 2016, pages 1-79.
    • Mathematical Appendix for Economics, Class Notes QEM 2016, pages 1-12.
  • Course Content

    •  Part A: Individual Decision Making

    1. Production and Firm Behavior. Production set, transformation function, production function, examples and basic properties. Competitive behavior, profit maximization, profit function, supply function, properties. Differential characterization of the supply for a differentiable transformation function. Cost minimization, cost function, demand of inputs, properties. Differential characterization of the demand of inputs. Relationship between profit maximization and cost minimization.
    2. Consumption, Rational Behavior and Market Demand. Consumption set, preferences, properties of preferences, utility representation, properties of utility functions, examples. Budget constraint, utility maximization problem, competitive demand, properties and computation on some examples. Differential characterization of the demand for a differentiable utility function. Choice rules. The weak axiom of revealed preference.

    • Part B: Equilibria & Optimality

    1. Pure exchange economies. Definition of competitive equilibrium, properties. An example with two commodities-two consumers: the Edgeworth box. Differential characterization of competitive equilibria. Existence of competitive equilibria. Feasible allocations, Pareto optimal allocations. Existence of Pareto optimal allocations. Differential characterization of Pareto optimal allocations. Pareto optimality conditions in terms of marginal rates of substitution. First and second theorems of welfare economics.
    2. Production economies. Private ownership economies, definition of competitive equilibrium, properties. Differential characterization of competitive equilibria. Existence of competitive equilibria. Production economies, feasible allocations, Pareto optimal allocations. Existence of Pareto optimal allocations. Differential characterization of Pareto optimal allocations. Pareto optimality conditions in terms of marginal rates of substitution and marginal rates of transformation. First and second theorems of welfare economics.