MICROECONOMIC THEORY 1

CEU, Economics Department, Fall 2005

Instructor: Prof.
Peter Grajzl

Teaching Assistant:
TBA

Course: 4 credits

**Course Description**

Microeconomic Theory 1 is the first half
of the two-semester core microeconomics sequence

in the MA program. The course aims at
introducing you to graduate-level microeconomic theory.

Topics discussed include producer and
consumer theory, competitive markets, monopoly, and

general equilibrium.

**Class Times**

Class time will be devoted to lectures
and seminars. Twenty-four 75-minute lectures will be spread

over eleven weeks. This amounts to two,
and in two out of eleven weeks three, lectures per week.

You will also attend six 100-minute seminars
devoted to discussion of solutions to homework

assignments (see Course Requirements below)
and review sessions. Seminars will be held in weeks

two, four, six, eight, ten and eleven.

**Course Readings**

The lectures will be based on Varian, Hal
R. Microeconomic Analysis, Third Edition, W.W. Norton, 1992.

The relevant chapters from the textbook
have been collected in the class reader.

Attending the lectures and reading the
corresponding chapters from the textbook will help you gain understanding
of the concepts. Working on the homework assignments (see Course Requirements

below) will help you make the crucial
step from understanding the concepts toward being able to solve problems.
Learning to solve problems is key to doing well in this course.

**Course Requirements**

There will be five homework assignments, a midterm exam and the final exam.

Homework assignments will consist of problems
similar to those that you will encounter on the exams.

While you should tackle the assigned problems
first on your own, you are encouraged to discuss them

with your fellow classmates. Each of you,
however, must turn in their own copy of each homework.

Homeworks will be graded on effort. Solutions
will be presented during the periodic discussion

sessions.

The dates of the midterm and the final
exam will be announced in class. All material covered in the class

will be pertinent for the final exam.

The course grade will be determined as a weighted average of the problem set and exam scores:

Homework assignments 10%

Midterm exam 15%

Final exam 75%

**Course Outline**

The following is a brief outline of topics* and relevant chapters from Microeconomic Analysis.

Producer theory

Technology
Ch. 1

Profit maximization
Ch. 2.1-2.4

Profit function
Ch. 3

Cost minimization
Ch. 4.1-4.4

Cost function
Ch. 5

Consumer theory

Utility maximization
Ch. 7

Consumer demand: comparative statics
Ch. 8.1-8.4

Consumer demand: further topics
Ch. 8.7, 9.4, 10.1-10.6

Choice under uncertainty
Ch. 11.1-11.7

Market structure

Competitive markets
Ch. 13

Monopoly Ch. 14

General Equilibrium

Exchange economy Ch.
17.1-17.7

Economy with production
Ch. 18.1-18.8

* I reserve the right to
minor modifications of these as the semester proceeds.