1. MATHEMATIC ANALISYS, INCLUDING AN INTRODUCTION TO CONSTRAINED OPTIMIZATION
2. INTERMEDIATE MICROECONOMICS, INCLUDING AN INTRODUCTION TO GENERAL EQUILIBRIUM
TO DISPELL ANY DUBTS:
1. THE FIRST DAY OF CLASS YOU WILL BE GIVEN A SET OF REVIEW PROBLEMS, PART OF WHICH WILL BE DUE THE FOLLOWING WEEK.
TO PROVIDE THE NECESSARY INCENTIVES, REVIEW PROBLEMS WILL ALWAYS GET DOUBLE MARK.
2. STUDENTS ARE SUPOSSED TO BE FULLY ACQUAINTED WITH THE FOLLOWING TOPICS:
I. GENERAL EQUILIBRIUM
Economies with a single productive factor, two goods, and two consumers
1. Feasible allocations. Production possibilities set. Marginal Rate of Transformation.
2. The Pareto criterion. Efficient allocations. Necessary conditions for efficiency in regular economies.
3. Resource allocation mechanisms. Private ownership of the only production factor and the two firms. Price systems and general equilibrium allocations under price taking behavior at perfectly competitive markets. The First Welfare Theorem.
II. COST MINIMIZATION WITH A SINGLE PRODUCTIVE FACTOR
Properties of the total, average and marginal cost functions when under decreasing, constant and increasing returns. Graphic illustration.
III. INDIVIDUAL CONSUMER BEHAVIOR
1. Consumer demand functions.
2. Leisure and consumption demand functions and labor supply function.
3. Current and future consumption demand functions and savings supply function in a two-periods world.
4. Equivalent Variation when a good price changes.
5. Consumer surplus.
IV. INDIVIDUAL FIRM BEHAVIOR
1. Economic profits (rents): definition. Capital opportunity cost.
2. Supply curve. Producer surplus.
V. PARTIAL EQUILIBRIUM
1. Industry supply curve under freedom of entry and access to the best available technology. The constant returns case. The case with first constant and then decreasing returns. The elimination of profits in competitive equilibrium.
2. Industry equilibrium with positive profits (economic rents).
3. Industry equilibrium in an open economy. Imports and exports.
4. Consumers¿ and producers¿ surplus. Maximization of the total surplus under perfect competition.