Advanced Microeconomics ( General Equilibrium ) 2400-ICU1AMIa
General Equilibrium Theory
1-2. DUALITY APPROACH TO DEMAND PROPERTIES
Utility function, Roy's identity, Walrasian Demand, Welfare measures (MC, pp. 40-95; V, pp. 94-113)
2-3. NEO-WALRASIAN THEORY OF PRODUCTION
Producion function. Cost minimization. Profit maximization. Duality in production.
5. Midterm exam
6. 2x2 PURE EXCHANGE MODEL
Feasible Allocation, Endowment, Offer Curve, Pareto Set, Contract Curve (V, pp.313-316, 323-329; MC, pp. 515-525, 538-540)
7-8. 1x1x2x1 ROBINSON CRUSOE MODEL. 2X2X2X2 SMALL OPEN ECONOMY
Excess Demand, Intermediate Goods, Production Possibility Set, Interior Equilibrium, Rybczynski Tehorem, Stolper-Samuelson Theorem, Factor Price Equalization Theorem (MC, pp. 525-538)
9-10.GENERAL MODEL
Private Ownership Economy, Walrasian (quasi)equilibrium, (Quasi)equilibrium with transfers, Fundamental Theorems of Welfare Economics, Locally nonsatiation preferences, Walras' Law (V, pp.317-322, 329-332; MC, pp. 545-557, 578-583)
COMPUTABLE GENERAL EQUILIBRIUM MODELING (classes in a computer lab.):
11 GAMS software, i/o table, simple exercises
12. A pure exchange model in GAMS
13. A 2x2x1 production model
14. Open economy model
15. Alternative production functions. Endogeneous labour supply
Type of course
Course coordinators
Learning outcomes
1. Students know and understand the preference relations concept and the concept of utility maximization. Students understand the duality in consumer theory.
2. Students are able to solve and analyze the following general equilibrium models: the pure exchange model, the Robinson Crusoe model, and the small open economy model.
3. Students understand the basic theorems of welfare economics. They are able to distinguish competitive equilibrium from the Pareto optimum allocation/social planner allocation.
4. Students know how to implement a simple GE model in GAMS software
5. Students know how to evaluate changes in economic environment with the use of simple GE model
General skills
1. Students understand that microeconomics can be applied to real economic and social issues and that the analysis can be performed using economic models
2. Students can interpret reality based on simple GE models and they are able to combine the micro and macro view.
3. Students are able to undertake employment in entreprises or public organizations that deal with design and assessment of economic policy
4. Students are able to formulate and present their views based on their knowledge and engage in discussion concerning these views.
5. Students are able to fulfill their duties and plan the work schedule on their own.
SW01, SW02, SW03, SW04, SU01, SU02, SU03, SU04, SU05, SU06, SU07, SK01, SK02, SK03
Assessment criteria
• In order to complete the course students need to:
o Collect at least 50% combined points from the following components:
midterm exam (weighted 45%);
final exam (45%)
labs (10%).
• All exams are to be taken by all students at the same time (only one date for everyone).
• There will be only one possibility to retake any of the failed exams for all students at the same time.
• There will be no other possibilities of completing the course.
• ‘0 tolerance for cheating’.
Bibliography
(MC) Mas-Colell, A., M. D. Whinston, J. R. Green, Microeconomic Theory, Oxford University Press, 1995
(V) Varian, H. R., Microeconomic Analysis, W. W. Norton & Co., ed. 3′
Varian, H. R., Intermediate Microeconomics, ed. 7
Additional information
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: