#### Course Outline

#### I.CHOICE AND DEMAND

*Preferences and Utility: *Axioms of Rational Choice , Utility, Trades and Substitution, An Alternative Derivation, Examples of Utility and Functions.

*Utility Maximization and Choice: *An Initial Survey, The Two-Good Case: A Graphical Analysis, The n-Good Case, Indirect Utility Function, Expenditure Minimization. *Income And Substitution Effects: *Demand Functions, Changes in Income, Changes in a Good’s Price, The Individual’s Demand Curve, Compensated Demand Curves, A Mathematical Development of Response to Price Changes, Revealed Preference and the Substitution Effect, Consumer Surplus , Extensions Shephard’s Lemma, Roy’s Identity, and Price Indices.

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*Demand Relationships among Goods: *The Two-Good Case, Substitutes and Complements, Net Substitutes and Complements, Composite Commodities, Home Production Attributes of Goods and Implicit Prices and Extensions Separable Utility and the Grouping of Goods.

*Market Demand and Elasticity: *Market Demand Curves, Elasticity, Relationships among Elasticities, Types of Demand Curves and Extensions Aggregation and Estimation

#### II. PRODUCTION AND SUPPLY

*Production Functions: *Variations in One Input, Isoquant Maps and the Rate of Technical Substitution, Returns to Scale, The Elasticity of Substitution, Some Common Production Functions, Technical Progress.

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*Costs: *Definitions of Costs, Cost-Minimizing Input Choices, Cost Functions, Changes in Input Prices, Change in the Price of One Input, Short-Run, Long-Run Distinction.

*Profit Maximization and Supply: *The Nature and Behavior of Firms, Profit Maximization, Marginal Revenue, Short-Run Supply by a Price-Taking Firm, Profit Maximization and Input Demand, Producer Surplus in the Short Run, Revenue Maximization, Managers and the Principal-Agent Problem.

#### III. PERFECT COMPETITION

The Partial Equilibrium Competitive, Applied Competitive Analysis, General Competitive Equilibrium and the Efficiency of Perfect Competition

#### MODELS OF IMPERFECT COMPETITION

Models of Monopoly, Traditional Models of Imperfect Competition, Game Theory Models of Pricing

#### V. PRICING IN INPUT MARKETS

Firms’ Demands for Inputs, Labor Supply and Capital

#### VI. LIMITS OF THE MARKET

Externalities and Public Goods and Public Choice Theory

#### VII. CHOICE UNDER UNCERTAINTY

*Choice in Uncertain Situations: Expected Utility and Risk Aversion*: Probability and Expected Value, Fair Games and the Expected Utility Hypothesis, The von Neumann-Morgenstem Theorem, Risk Aversion, Measuring Risk Aversion, The State-Preference Approach to Choice under Uncertainty and Extensions Portfolio Theory and the Pricing of Risk.

*The Economics of Information*: Properties of Information, The Value of Information, Information and Insurance, Moral Hazard, Adverse Selection

Game Theory and Strategic Equilibrium: Basic Concepts, Nash Equilibrium in Games, An Illustrative Dormitory Game, Existence of Nash Equilibria, The Prisoner’s Dilemma, A Two-Period Dormitory Game, Repeated Games, Games of Incomplete information.

#### Reference Books

- Henderson & Quandt,
*Microeconomics*:*A Mathematical Approach*, Latest Eds.

- Jehle, Geoffrey A. and Philip J. Reny.
*Advanced**Microeconomic Theory.*Oxford University Press. 2^{nd}

- Mas-Colell, Andreu, Michael D. Whinston and Jerry R. Green.
*Microeconomic*Oxford University Press. - Nicholson,W. and C. Snyder (2012).
*Microeconomic Theory: Basic Principles and**Extensions*, South-Western, Cengage Learning, Mason, USA. - Silberberg, E. and W. Suen (2000).
*The Structure of Economics: A Mathematical Analysis*. McGraw Hill Publishing Company. - Varian, H.R.
*Microeconomic Analysis*, Norton and Company, New York.