Economics 150a: The Theory of Resource Allocation and Its
Application
Fall 2003
Monday and Wednesday, 11.30-12.45
Location: To be determined
Room 27,
37 Hillhouse Avenue, 432-3569 Room 23, 30 Hillhouse Ave., 432-6903
Penny.Goldberg@yale.edu stephen.morris@yale.edu
Office Hours: Wednesday, 1 – 2 pm Office Hours: Tuesday 10 – 11 am
Professor Goldberg will teach the first
part of the course (parts I and II in the preliminary course outline).
Professor Morris will teach the second part.
Teaching Assistant and
Section Information (preliminary)
To be determined.
The
course will cover the following topics in microeconomic theory: consumer
behavior, production theory, firm behavior, and price and wage determination in
different market structures. Empirical
applications explore strengths and limitations of the theoretical models.
Two terms of introductory
economics and completion of the mathematics requirement for the major.
The required text for
this class is Varian, Intermediate Microeconomics. The 6th edition will be available
at the Yale Bookstore (i.e., Barnes and Noble). Other recommended textbooks
include Nicholson, Microeconomic Theory: Basic Principles and
Extensions (for those of you who
would like a more mathematical treatment), and Pindyck and Rubinfeld, Microeconomics
(provides a far less technical treatment). Copies of each of these books
will be placed on reserve at the Cross-Campus Library for supplemental use.
Lectures, Sections, Teaching Assistants,
and Grading
The class will be comprised of two lectures a week (Monday & Wednesday), given by the professor, in which new material will be introduced. The teaching assistants will give sections, in which the material taught during the week will be presented from a new perspective, exercises will be worked-out, etc. Problem sets will be graded by the teaching assistants; exams will be graded by the teaching assistants and the professor.
The teaching assistants
and the professor will hold weekly office hours. You are strongly encouraged to make use of these office hours as
soon as you have any difficulties. If
you find that you would like extra help at any point during the semester,
please contact either the professor or one of the teaching assistants as soon
as possible. There are undergraduate
assistants in instruction available to serve as tutors. You need not be in danger of failing
the course in order to make use of these tutoring resources.
Requirements for the
course include a midterm exam, which will be held in class in the first week of
March, a final exam, and seven problem sets.
The midterm exam will cover consumer behavior, while the final exam will
be cumulative. Questions that appear on
problem sets will be indicative of the questions that will be asked on exams.
The problems sets will
be handed out in class and posted on my website. They will be due in class
one week after they were handed out. No late problem sets will be accepted.
Electronic submissions will NOT be accepted under any circumstances.
However, the worst two problem sets will be dismissed in calculating the
course grade. Problem set solutions will be posted on my website after the due
date of each problem set.
Each of these
requirements will contribute to your grade as follows:
Midterm Exam 30%
Problem Sets 25%
Final Exam 45%
Letter grades will not
be assigned to specific exams or problem sets.
Rather, exam material and problem sets will be graded on a percentage
scale (0 - 100). Course letter grades will then be based on the
departmental curve for an intermediate-level class.
The only math requirement
for this class is Math 112, univariate calculus. The techniques studied in that class, along with a lot of
algebra, will be heavily used in order to solve for the optimal behavior of
agents acting under resource constraints.
The techniques of multivariate calculus (including constrained
optimization via Lagrangians) will not be used in class lectures or on
examinations.
Preliminary Course Outline (Readings From Varian, Intermediate
Microeconomics, 6th Edition)
I.
Introduction (Chapter 1)
II.
The Consumer
1) Budget Constraints
and Preferences (Chapters 2, 3, and 4)
2) Consumer Choice
(Chapter 5)
3) Demand (Chapter 6)
4) Slutsky Equation
(Chapter 8)
5) Consumer Surplus
(Chapter 14)
6) Market Demand,
Elasticity (Chapter 15)
7) Intertemporal Choice
(Chapters 10 and 11)
8) Labor Supply
(Chapter 9, pp.173-178)
MIDTERM EXAM
III. The Firm
1) Technology (Chapter
18)
2) Cost Minimization
(Chapters 20 and 21)
3) Theory of the Firm and
Profit Maximization (Chapter 19)
4) Perfect Competition
(Chapters 22 and 23)
5) Monopoly (Chapters
24, 25 and 26)
6) Game Theory and Imperfect
Competition (Chapters 27 and 28)
IV. Market (In)Efficiency
1) Exchange and General
Equilibrium (Chapters 30 and 31)
2) Externalities,
Public Goods and Imperfect Information (Chapters 33, 35 and 36)
FINAL EXAM