Spring 2014, Econ 101A

Time

TuTh 9:30-11AM

Location

155 Donner Lab
Office: 
515 Evans Hall
Office Hours: 
Thursday 12-2PM
Office: 
636 Evans
Office Hours: 
Tu 1-2PM, Th 1-2PM
Office: 
636 Evans
Office Hours: 
Monday 11AM-12N

Course Description

This course is meant to introduce you to the world of formal economic modeling. Economic models are typically made of three components:

• Consumers;

• Firms;

• A market in which consumers and firms interact.

We deal with these three components sequentially. The course starts by introducing consumer preferences and utility function. We then move on to consider firms and production functions, and finally we study the market-clearing conditions.

Syllabus

Lecture Notes

Lecture 1: Introduction Motivation Maximization in One Variable (Ch. 2)
Lecture 2: Optimization with 1 Variable, Multivariate optimization, Comparative Statics and Implicit function theorem
Lecture 3: Implicit Function Theorem II, Envelope Theorem, Convexity and Concavity, and Constrained Maximization
Lecture 4: Constrained Maximization II, Envelope Theorem II, Preferences and Properties of Preferences
Lecture 5: Properties of Preferences II, From Preferences to Utility (and viceversa), Common Utility Functions and Utility Maximization
Lecture 6: Common Utility Functions, Utility maximization, Utility maximization — Tricky Cases and Indirect Utility Function
Lecture 7: Utility maximization — Tricky Cases, Indirect Utility Function, Comparative Statics (Introduction), Income Changes and Price Changes
Lecture 8: Expenditure Minimization and Slutsky Equation
Lecture 9: Complements and Substitutes, Do Utility Functions Exist?, Application 1: Labor Supply and Application 2: Intertemporal Choice I
Lecture 10: Application 2: Intertemporal Choice and Application 3: Altruism and Charitable Donations
Lecture 11: Introduction to probability, Expected Utility, Risk Aversion and Lottery, Measures of Risk Aversion and Insurance
Lecture 12: Mid-Term Feedback, Insurance II, Investment in Risky Asset and Time Consistency
Lecture 13: Time Consistency, Time Inconsistency and Health Club Attendance
Lecture 14: Production Introduction, Production Function, Returns to Scale and Two-step Cost Minimization
Lecture 15: Two-step Cost Minimization II, Cost Minimization: Example and Cost Curves and Supply Function
Lecture 16: Cost Curves, One-Step Profit Maximization, Second-Order Conditions, Introduction to Market Equilibrium, Aggregation and Market Equilibrium in the Short-Run
Lecture 17: Comparative Statics of Equilibrium, Elasticities, Response to Taxes, Producer Surplus, Consumer Surplus and Trade
Lecture 18: Consumer Surplus, Trade, Rent Control and Market Equilibrium in The Long-Run
Lecture 19: Profit Maximization: Monopoly, Price Discrimination and Oligopoly?
Lecture 20: Game Theory, Oligopoly: Cournot and Oligopoly: Bertrand
Lecture 21: Oligopoly: Cournot, Oligopoly: Bertrand, Second-Price Auction, and Auctions: eBay Evidence
Lecture 22: Dynamic Games, Oligopoly: Stackelberg, General Equilibrium: Introduction and Edgeworth Box: Pure Exchange
Lecture 23: General Equilibrium: Introduction, Edgeworth Box: Pure Exchange, Barter, and Walrasian Equilibrium
Lecture 24: Example of General Equilibrium, Existence and Welfare Theorems, Asymmetric Information: Introduction, and Hidden Action (Moral Hazard)
Lecture 25: Hidden Action (Moral Hazard) II, The Takeover Game, Hidden Type (Adverse Selection), and Evidence of Hidden Type and Hidden Action
Lecture 26: Hidden Type (Adverse Selection), Empirical Economics: Intro, Empirical Economics: Home Insurance, Empirical Economics: Retirement Savings, Some Advice, and Course Evaluation

Past Exams

Announcements

May 8, 2014: Problem Set 6 Solution posted
April 23, 2014 - Midterm 1 2014 and the solution to Midterm 1, Midterm 2 and the solution to Midterm 2 posted directly underneath 101A — Final Exam Solution Spring 2012
April 27, 2014 - Corrected Problem Set #6 Due on Tuesday, May 6 by noon in my office (Evans 515). No late Problem Sets accepted, sorry!
April 17, 2014 Past Finals and its Solutions now posted under Past Exams