This course is the first of a series of three 6-ECTS courses that offer a rigorous training in microeconomic theory at the graduate level. This course gives students the foundations of microeconomic theory at the graduate level. Consumer, producer, and general equilibrium theories are covered.
SpecificsBefore enrolling all non-CentER students should ask permission to the Director of Graduate Studies in Economics. Please send your request for permission to CentER Graduate School at email@example.com.
Required PrerequisitesQuantitative Methods (CentER)
The first part of the course considers the behavior of consumers and producers in a general context. Topics include the demand functions of consumers, which are derived from assumptions on preferences using the utility function framework. Next, we consider the supply functions of producers and how they are derived from production technology and the price-taking profit maximization assumption. Also, the relationship between utility functions and decision making under risk is studied. The second part of the course studies the concept of equilibrium at which prices are such that aggregate demand equals aggregate supply plus total endowment. It is studied what the consequences are for the equilibrium in case there are externalities and public goods present in the economy. The existence of a general equilibrium is proved in detail. The fundamental theorems of welfare economics are treated which state that a competitive general equilibrium allocation is Pareto optimal and a social welfare optimum and that the reverse holds under convexity conditions.
Type of instructions
30 hours of lectures and 20 hours of tutorials.
Type of exams
Written final exam (80%) and regular graded homework assignments (20%).
- A. Mas-Colell, M.D. Whinston, and J.R. Green, Microeconomic Theory, Oxford University Press, 1995, ISBN 978-0-1950-7340-9.