Microeconomics 1

Main course materials

The main reference for my half of the course is my lecture notes. Please regularly check that you have the latest version. I last updated the notes at 12:00AM, Wednesday 07 of May. You can see what changed using Adobe Acrobat Pro on the uCreate computers. Choose Tools -> Compare Documents, and select the PDFs containing the old and new versions of the notes. You can download the Latex source if you want to annotate or contribute improvements to the notes.

You can read the practice exam questions and sample solutions with commentary.

To watch lecture videos, first log into Learn, and then select "Watch Lecture Recordings" on the Microeconomics 1 page

You can browse last year's course materials.

News

• January 22nd:
  • The mark distribution for my part of the December exam is: 11 students got 40-49, 22 students got 50-59, 34 students got 60-69, 9 students got 70-79.
• January 17th:
  • Exam marks are now available.
  • You can come to my office hours to review your exam script, and take photos.
  • I have published sample solutions and commentary in the practice questions file above.
• November 3rd: I added some sample marked exam scripts below.
• Week 5:   lecture whiteboard notes   bonus whiteboard notes
  • We did 4.6 and 4.7, and did bonus section C.8 and started C.9.
  • Homework: practice questions 6, 10, 26.
  • I have corrected the sample solutions for question 30.
• Week 4:   lecture whiteboard notes   bonus whiteboard notes
  • We did 3.4, 3.5, 3.6, 4.1, 4.2, 4.3, 4.4, 4.5, and did bonus section C.7 and started C.8.
  • Homework: 3.10, 4.1, 4.2, 4.3.
• Week 3:   lecture whiteboard notes   bonus whiteboard notes
  • We did 2.5, 3.1, 3.2, 3.3 and started 3.4, and bonus sections C.5 and started C.6.
  • Homework: 2.17, 3.1, 3.6, and past exam questions 11.iii, 13.iii, and 13.iv.
• Week 2:   lecture whiteboard notes   bonus whiteboard notes
  • The main lecture covered 2.3, 2.4 and some of 2.5. The bonus lecture covered C.2, C.3, C.4 and some of C.5.
  • Homework: 2.9, 2.10, 2.11, 2.13, 2.14
• Week 1:   lecture whiteboard notes
  • The first hour every week (until 10am) contains bonus material which is entirely optional. Throughout these bonus lectures, I will cover some of the material from Appendix C, which is about Metric Spaces. It is primarily for students who want to do PhDs.
  • The main lecture covered Chapter 1, Sections 2.1 and 2.2, and Appendix D. The bonus material covered C.1 and started C.2.
  • This course uses quite a lot of mathematics notation and terminology. I will explain the notation in lectures, but you might also find reading Appendix A this week to be helpful.
  • Homework: Questions 2.1, 2.2, 2.6, 2.7 and 2.8 from the lecture notes.

Assessment

Details on the assessment (including the marking criteria) are included in the practice question file. Two students kindly donated their marked exam scripts in 2017-8. Note that the December and May exams are marked on the same scale.

Extra Reference

Some students like an extra reference, although it is unnecessary. I will only test knowledge from my notes. The references below are also available as a clickable reference list via the library.

Material marked with a star in the notes will only be tested in bonus questions; it is possible to get a distinction in the class without learning the starred material. My notes are closer to Varian and Kreps than MWG, but quite different from all of them. Ambitious students who would like a strong background in mathematics might want to read Maxwell Rosenlicht's (1968) "Introduction to Analysis" or Luenberger's (1969) "Optimization by Vector Space Methods". Angel de la Fuente's (2000) "Mathematical Methods and Models for Economists" is also helpful.

MWG means Mas-Colell, Whinston and Green's (1995) "Microeconomic Theory". V means Varian's (1992) "Microeconomic Analysis". K means Kreps' (1990) "A Course in Microeconomic Theory". KK means Kreps' (2013) "Microeconomic Foundations 1: Choice and Competitive Markets". SL means Stokey and Lucas (1989), "Recursive Methods in Economic Dynamics". Debreu (1960) is Topological methods in cardinal utility theory.

1. Introduction
2. Production
   1. Production Functions   See: V1, MWG5, K7.1
   2. Profit Maximization   See: V2, MWG5, K7.2
   3. Upper Envelopes and Value Functions   See: V3, SL4, MWG5, K7.2
   4. Cost Functions and Dynamic Programming   See: V4, SL4, MWG5, K7.3, K.A.2
   5. Upper Envelopes with Constraints   See: V5, SL4, MWG5, K7.3
3. Consumption
   1. Utility Functions   See: V7, MWG3, K2.1
   2. Time Preference   See: Debreu (1960), V19, SL4, SL5, MWG20, KK2.5
   3. Utility Maximization   See: V7, MWG3, K2.2
   4. Consumer’s Value and Policy Functions   See: V7, MWG3, K2.2, K2.3
   5. Expenditure Function and Policy Functions   See: V7, MWG3, K2.2, K2.3
   6. Slutsky Decomposition   See: V8, MWG3, K2.3
4. Equilibrium
   1. Economies   See V17, V18, V19, MWG16, K6.1, K6.2
   2. Efficient Allocations   See V17, V18, V19, MWG16, MWG22, K5.2
   3. Equilibrium   See V17, V18, V19, MWG16, K6.1
   4. Characterising Equilibria   See V17, MWG15, MWG16, MWG20, K2.2
   5. Efficiency of Equilibria   See V17, MWG16, K6.3
   6. *Existence of Equilibria   See V17, MWG17, K6.4
   7. Implementation of Efficient Allocations   See V17, MWG16, K6.3