Welcome to the Economics 210A Website. If you are
taking this course, please check this site regularly. I
will use this site for posting announcements about assignments.
The syllabus that you see is a bit like the weather report. It
is a pretty accurate forecast of what we will do in the near
future. The long term forecasts are less reliable and will
be updated as the course proceeds.
| Class Resources |
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| The main textbook for this course is Advanced Microeconomic Theory, by
Geoffrey Jehle and Philip Reny. Other useful textbooks: There are now several good alternative textbooks that you may want to consider purchasing. These serve not only as texts, but as references that will be useful for years to come. One good option is Essential Microeconomics by John Riley. Take a look at this link to see a nice set of study resources related to this book. This book will be useful not only in this course, but also is likely to be assigned in the next two quarters of the graduate micro sequence. It is available new from Amazon at about $90 and used from Amazon at about half that price. David Kreps' book Microeconomic Foundations I is a somewhat more mathematically rigorous treatment of this material. I have put the first chapter online for you at this link. Amazon has Kreps' book new for about $40. Do you want a solid, clear exposition of the mysteries of concave and quasi-concave functions? Let me suggest this chapter from Simon and Blume's ``Mathematics for Economists'' . And while you are at it, why not have a look at their chapter on homogeneous and homothetic functions. In my opinion, most economists would benefit from purchasing the Simon-Blume book as a reference. If you want to develop upper-body strength, you might consider carrying the massive Microeconomic Theory, by Andreu Mas Collel, Michael Whinston and Jerry Green in your backpack. This is probably the most widely-used graduate micro textbook and serves well as a reference work. Another textbook that is worth looking at is the svelte Lectures in Economic Theory by Ariel Rubinstein. You could buy a hard copy of the Rubinstein book for about $30 from Amazon.com. It would be probably be worth the Amazon price if that were the only way you could get it, but Professor Rubinstein has put it online for free. More Free Resources. I have put a pdf copy of Workouts in Microeconomic Theory by Bergstrom and Varian online for this class. This is a workbook that accompanies Varian's undergraduate intermediate microeconomics text, Intermediate Economics. I will regularly assign problems from Workouts. If you want a paper copy, you can probably pick up an old edition cheaply and old editions are just about as good as the new one. Same goes for Varian's undergraduate text. Some of you might find the Varian text a good place to improve your background in intermediate micro. A slim and beautiful economic theory book that you might consider buying is Itzhak Gilboa's Rational Choice. I have put the first two chapters of this book online. Do you need to brush up on elementary logic and set theory? I suggest reading two chapters from Kenneth May's ``Elements of Modern Mathematics.'' Here they are: Elementary Logic, Elementary Theory of Sets. It has many nice problems and applications (with answers supplied). Want a quick brush-up on logic, sets, concavity, matrices, multivariate calculus, and related mathematical tools for economics? Take a look at this tutorial by Martin Osborne. Tutorials on matrix algebra, eigenthings, and quadratic forms. If you need more practice with the most elementary things in matrix algebra, like multiplying matrices times other matrices, matrices, times vectors, transposing matrices, etc, you might want to look at the Wikipedia discussion of matrix algebra. For a nice discussion of Quadratic Forms and their relation to matrix algebra, I recommend Blume and Simon's Chapter 16, which you can find here. Also you might want to look at this collection of notes on quadratic forms and eigenstuff, put together by Sheetal Gavankar. A graphical demonstration of the directional derivative. You are standing on a mountain, at point x, with your skis pointing in direction y. What is the "slope" of your skis? Check out the discussion at this site or the demo at this one. Do you need a brain to have transitive preferences? This paper offers evidence that slime molds, though they have even less brains than university administrators, do act transitively. The paper suggests however, that they do not have well-formed preference orderings, but make their choices by means of comparisons to possibly irrelevant alternatives. Some Old Exams
Midterm 2012 Midterm 2012 with answers Final 2012 Final 2012 with some answers Midterm 2013 Midterm 2013 with answers Final Exam 2013 Final Exam 2013 with answers First Midterm, 2014 Second Midterm, 2014 Final Exam 2014 Final Exam 2014 with answers First Midterm 2015 First Midterm with answers Second Midterm 2015 Final Exam 2015 Final Exam 2015 with answers
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| About your Homework. Problems will be assigned each week. You will be required to work them and turn them in. Homework should be neat and legible. Unless you have unusually clear handwriting, I recommend typing your homework.* Late homework will not be accepted. I have no objections to your working together, but I will ask you to acknowledge any help that you have had on particular problems. *How do you handle mathematical typing with all its notations and super and subscripts? Now is a good time to start using LaTeX or Scientific Word. LaTeX is the standard language for scientific typesetting and I think a better long-run solution than Scientific Word. Free installations are available for Windows, Mac and Linux. It takes a bit of learning, but this investment in human capital will repay itself many times over. There are several tutorials available on the Web. If you are old-fashioned enough to like printed manuals, you would probably want to buy LaTeX manual like Kopka and Daly's A Guide to Latex. I have found however that Google works very well as a reference. If I forget how to do something I type something like "matrix in LaTeX" into Google and am directed to a nice discussion of how to produce matrices (or whatever) in LaTeX.
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| Week
1 |
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| Reading
Assignment:
(Logic Preparation Check: Read the brief chapter on logic in Martin Osborne's tutorial. See that you can do the Exercises that go with it. This is not to hand in. If this material is new to you or you are not confident with it, spend some time with Kenneth May's chapter on logic.) Download Kreps Chapter 1 Jehle and Reny: pages 1-18 Jehle and Reny: pages 495-514 Lecture slides: Transitivity of strict preference (Optional reading: Download Rubinstein: Introduction and Lecture 1 ) Who can solve the puzzle downloaded by clicking here and tell us the answer on Wednesday? Homework Assignment (Due Wednesday) Problems from Kreps Chapter 1 The following problems from Kreps have answers which you can find by downloading the student guide to Kreps' Chapter 1. Problems 1.1, 1.3, 1.6 and 1.7. You won't need to hand these in, but you should work them. Try to do as much as you can before looking at the answers. To hand in: Kreps Problems 1.2, 1.4, 1.8 and 1.9. Jehle and Reny Problems 1.2, 1.4, 1.5 (a), (d), and (f), 1.6, and 1.9 (Note that there are hints for some of the J and R problems in the back of the book. ) |
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| Week 2 |
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| Reading
Assignment: Rubinstein: Lecture 4 Jehle and Reny: pp 19-41 Jehle and Reny: (3d edition pp 515-523 and 529-533) (optional: MWG pp 9-22 and 40-57) Lecture slides: Continuity Lecture slides: Convexity Homework Assignment: (Due Wednesday) Jehle and Reny: (page 546 Exercises A.1.5, A.1.7 Parts c and d, A.1.9, A.1.10, A.1.16) Jehle and Reny: Exercises 1.12, 1.15, 1.20, 1.21, 1.26, 1.27, 1.29 (Hint for J and R. 1.27: Draw the indifference curves for this utility function. What do the indifference curves look like if a=1? What if a>1? What if a<1?) Jehle and Reny: Exercises A1.40, A1.42, A1.46, A1.47 A.1.48 Download these three problems and work them. Try to make some progress with Problems 2 and 3 before class Wednesday and be ready to answer questions in class about it. Problems that you should work, but don't need to turn in: Bergstrom and Varian Workouts Problems 3.3, 3.5, 3.7, 3.9 and 3.13 B-V Workouts Problems 4.1, 4.3, 4.5, 4.7 and 4.11 |
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| Week 3
(tentative schedule) |
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| Note: We will have our first midterm on Friday at the TA section meeting. It will deal with material assigned in Weeks 1-3. I won't ask you to turn in homework problems this week, but do recommend that you work the assigned problems. Answers for first midterm Lecture Slides: Calculus and Concavity Quasi-concavity and hyperplanes Reading Assignment: Jehle and Reny pp 42-50 Simon and Blume on Homogeneous and Homothetic functions, Chapter 20 Charles Wilson's Lecture on Homogeneous and Homothetic functfile:///Volumes/tedb-1/public_html/Courses/GraduateTheoryUCSB/RooftopTheorem.pdfions Simon and Blume on Concave and Quasiconcave functions, Chapter 21 , pp 505-527 Proof that for differentiable concave functions, tangent line lies above the graph Jehle and Reny pages 533-545, pp 551-595 Is Campbell Hall really a convex set? Recommended problems: An easy one? If this problem made you want to cry, maybe economics isn't for you. Homework: Jehle and Reny Appendix Exercises A.1.32, A.1.36, A.1.49, A.2.12, A.2.13, A.2.14 Simon and Blume Problem 20.17 Simon and Blume Problem 21.2 Workouts Problems 5.1,5.3, 5.7 Problems 6.1, 6.3, 6.5, 6.13 |
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| Week 4 |
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Reading Assignment: Jehle and Reny pages 595-611 Jehle and Reny pp 50-60, Proofs of Properties of indirect utility functions Proofs of Properties of Expenditure functions Notes on Envelope Theory Lecture Slides Indirect Utility and Continuity Expenditure Functions Homework to do but not turn in: Jehle and Reny Exercises A. 2.9, A.2.19, A.2.20, A.2.24 Problem 1.50 Notes on Jehle Problem 1.50: indirect utility Practice problems on gradients and directional derivatives (not to be handed in) Homework to turn in Jehle and Reny Exercises 1.53, 1.57, 1.64 (for 1.64, you should prove your answers) Three problems found at this link. Optional Readings from Kreps Microeconomic Foundations Continuity of Demand Functions Functions and Correspondences and Berge's theorem |
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| Week 5 |
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Announcement: There will be no class on Wednesday, the day before Thanksgiving holiday. Useful properties of quasi-concave and homogeneous functions Notes on Gorman Polar Form (10/29/15 In response to a student's question, I have added a remark about monotonic transforms of Gorman polar form utility to these notes.) Notes on Translated Homothetic Utility and Stone-Geary Utility Jehle and Reny pp 60-63 Read Jehle and Reny pages 125-135. I think that you will find this material to be reassuringly familiar. Notes on the elasticity of substitution Problems to hand in: Jehle and Reny, 1.55 and 1.56 Problems on CES Functions Problems with Funny Budgets Suggested reading: Arrow Chenery Minhas Solow paper on CES production functions Remarks by Arrow on history of ACMS paper |
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| Week 6 |
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| Notes on When
is a CES function concave? Notes on Separable Preferences Homework (not to be handed in): Exercises found in Notes on Separable Preferences Second Midterm this Friday in your TA section meeting. Answers for Second Midterm Will this question be on the midterm? |
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| Week 7 | |
| Read Bernoulli
on Expected utility (required) and Anscombe and Aumann (optional) Read Jehle and Reny Chapter 2, section on Uncertainty pages 97-118 Notes on Expected Utility Be sure that you can do the problems in Workouts Problems Chapter 12, but you don't need to hand them in. Jehle and Reny Problems 2.21, 2.25, 2.26 2.27 Also Problems at this link. |
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| Week 8 | |
| Further discussion of Expected Utility Theory Classroom exercise-- Finding von Neumann Morgenstern utilities by survey Results of Classroom Exercise Update: Kent Strauss used MatLab to graph the estimated utility of income functions from classroom surveys taken in 2015 and 2016. I have attached his graphs to the file at this link. As part of your homework, find some interesting things to say, based on the results of this classroom exercise. Optional Readings: (If you want to follow up on the empirics of estimated values of risk to life) Kip Viscusi on Value of Statistical Life Viscusi and Aldy on Value of a Statistical Life |
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| Required Reading
Soldiers of Fortune Homework to hand in: Work the problems at this link. Jehle and Reny Problems 2.32, 2.33, 2.34 |
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| Week 9 |
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| Reading Assignment Jehle and Reny, Section 2.3, Revealed Preference Revealed Preference, from Microeconomic Analysis by Hal Varian Lecture notes on revealed preference Lecture notes on Pure Exchange Equilibrium Jehle and Reny Chapter 3, pp 135-145 |
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Week 10
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| Pure Exchange
Equilibrium Lecture notes on Pure Exchange Equilibrium Not to be handed in, but see that you can do these: (Read the introductions to each of these chapters) Workouts Problems from Chapter 9 Workouts Problems from Chapter 31 Jehle and Reny pp 201-206 2016 Final Exam with Answers |
