Microeconomics I

Catalog description

This course studies how market outcomes are determined by the decision-making of individual consumers and firms in the economy. The focus for most of the course will be on the decisions of each side of the market separately, taking as given a set of prices which fix terms of trade. On the consumption side of the market, rigorous models of consumer preferences will be used to microfound demand curves and describe notions of complementarity and substitutability between different goods. On the production side, descriptions of production technologies coupled with an assumption of profit-maximization by firms will be used to generate supply curves. Finally, demand and supply will be brought together to determine market allocations in conditions of perfect competition, monopolistic competition, and monopoly, with particular emphasis on the welfare implications of each environment.