 Early Danish Trading Post
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ECON 701 West Virginia University Fall 2023 Reynolds Hall 5201 4:00- 5:40 T-TH |
 Beijing Shopping Mall
(UG)
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| Instructor: | Professor Roger D. Congleton | . |
| Office: | 4131
Reynolds Hall E-Mail roger.congleto@mail.wvu.edu (the best way to contact Prof Congleton) |
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| Office Hours: | 2:30 - 3:30 Wednesdays-Thursdays, and other afternoons by appointment |
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| OptionalTexts:. | Nicholson,
W. Microeconomic Theory, Twelfth Edition. (2016) |
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| Knight, F. H. Risk Uncertainty and Profit. (1985/1921) Midway Reprint edition, University of Chicago Press. | . | |
| Mas-Colell, A., Green, J. R., and Whinston, M. D. (1995) Microeconomic Theory. Oxford: Oxford University Press | ||
| . | Congleton, R. D.
(2022) Solving Social Dilemmas: Ethics, Politics, and
Prosperity. Oxford University Press |
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| .Course Focus: | Advanced
Microeconomics I is divided into three parts. The first
part of the course focuses on the core models and results
of economics. It reviews the theory of consumer behavior
(demand), theory of firm output decisions (supply). the
theory of firm production decisions and their connection
to a firm's cost functions, and models of equilibrium
prices. |
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The second part
explores extensions of the neoclassical model to choice
settings where time and uncertainty are important
features. It models inter-temporal choices and choices uin
settings were outcomes or circumstances are probabilistic
rather than certain. It also develops models of innovation
and entrepreneurship. Innovation and entrepreneurship are
both examples of decisionmaking under uncertainty and a
source of uncertainty. The third part explores implications of what might be regarded as market imperfections, but which are actually simply violations of some of the usual assumptions about the setting in which trade takes place. Implications of theft, fraud, regulation, politics, and ethical dispositions are developed analytically. All these neglected factors can have significant effects on the manner in which markets operate and the extent of the networks of exchange, production, and innovation that typify contemporary markets. Part three concludes with an overview of welfare economics and its applications to markets, externalities, and system design. The goal of the course is to provide graduate student with a thorough understanding of the core neoclassical models, their extensions, and foundational assumptions. It also attempts to give them an appreciation of itheir explanatory power by exploring subset of post-war extensions of the core models and analyzing linkages between economic, political and social systems.. The course is lecture and web-text based. |
Undergradute Math Econ Course |
| . | Tentative Course Outline (pdf) |
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| Dates | Topic |
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| . | I. The Core Models of Neoclassical Economics | . |
| 17-Aug-23 | 1. Introduction to Course and Economic Models |
MWG: 1, 2 Kn 3 |
| . | Methodological Individualism: Rational Choice as a modeling device. Scarcity and optimization. What does rational choice mean? Choosing patterns of consumption. |
First Lecture |
| 17-Aug-23 | 2.Consumer Demand |
MWG: 5 |
| . | The
Geometry and Mathematics of Decisions to Purchase Goods
and Services, Cobb-Douglas Models, More Abstract Models of
Consumer Choice
[HW 1] |
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| 29-Aug-09 | 3. Supply |
MWG: 3, 5 Kn: 6 |
| . | The
Mathematics of Decisions to Produce Goods for Sale in the
Short Run and Long Run by Price-Taking Firms, The
Implications of Diminishing Returns. Monopolists and
Price- Making Firms.
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[HW 2] |
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| 5-Sept-23 | 4. Production |
MWG: 3, 5 Kn: 4 |
| . | Decisions
about how goods are Produced, and what they cost?. Input
Prices, Technology, and Production Costs for Price Taking
firms. Demands for Inputs.
[HW 3] |
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| 12-Sept-23 | 5. Equilibrium Prices |
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| . | Market
Clearing Prices in the Short Run. Marshallian and
Ricardian Theories of Long Run Supply, Geometry and
Calculus-Based Models of Market Prices,
. [HW 4] |
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| 14-Sept-23 |
Review for Midterm
Exam (Prerecorded
overview of Part I) |
Selected Answers |
| 19-21 - Sept-23 | MIDTERM
EXAMINATION (take home) |
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| 28-Sept-23 | Midterm Exams Returned and Reviewed |
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| II. Extensions of Neoclassical Price Theory |
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| 26-Sept-23 |
6.
Intertemporal
Choice |
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| Plans that take more than
1 "period" to excecute require taking into account both
changes that may occur through time and interest
rates. Chapter 6 develops models of consumer choice where
consumption takes place in long enough periods that
interest rates and changes in income need to be taken into
account. The chapter also introduces present and future
value calculations in money terms. |
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| 28-Sept-23 | 7. Economic Implications of
Risk |
N: 9, 10, 19
MWG: 13, 14
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| Risk Aversion and Choice
under Uncertainly. Markets for Insurance. Other Risk
shifting Strategies. Strategies for Moderating Risks:
Monitoring, Quality Control, and the Routines of
Management, Risk Moderation and the Extent of Markets
[HW 5] |
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| 02-Oct-23 |
Exams Returned and
Reviewed / Economic Consequences of Risk Continued |
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| 5-Oct-23 | Fall Break NO
CLASS |
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| 12-Oct-23 | 8. Uncertainty and
Entrepreneurship |
N:9, 10;
MWG: 14 Kn: 9, 10
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| Uninsurable Risks and the Usefulness of Reserves. Entrepreurship as decisionmaking under uncertainty. Knight, Schumpeter, and Kirzner on Entrepreneurship. Entrepreneurs as Formeteurs, Investing in Innovation, Innovation as a source of economic profits, Innovation as a source of uncertainty. [ HW 6] | ||
| Likely Future Chapters not covered
this semester: (9) Information, Expectations, and Intertemporal Choice (10) Goods" as Collections of Valued Attributes--Hedonics (11) Multi-product Firms (12) Firms as Organizations" |
Stigler (1961) Farrell and Rabin (1996) Lancaster (1966) Becker (1965) Brown et al (1979) Riley (1975) Baysinger and Butler (1985) |
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| III. Underpinnings of Markets: Further Extensions | ||
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17-Oct-23
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13. Law and Economics |
MWG: 11, 12 |
| The Economics of Crime
the Extent of Markets, Fraud and the extent of Markets,
the Quality of Law Enforcement, Realizable Gains to Trade,
and the Extent of Markets
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| 24-Oct-23 | 14. Politics and
Economics--Political Economy |
MWG: 21, 22 |
| . | Electoral Competition and Electoral Determined Public Policy, Market Adjustments to Public Policies, Investments in Rent Seeking and the Extent of Markets. [HW 7] | . |
| 31-Oct-09 | 15. Ethics, Norms, and the
Efficiency of Markets |
Kn: 5, 11 / C: 6,8 |
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Culture
and the Efficiency of Markets. Economizing on Etihcal
Agents. Culture and the Extent and Growth Rates of
Markets. Extended Rational Choice Models. |
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| 7-Nov-23 | 16. Welfare Economics | |
| Deciding what is best, Utillitarian Notions of Economic Efficiency, Cost Benefit Analysis, the Pareto Criteria, Contractarianism. The normative properties of exchange (w and w/o externalities). [HW 8] |
N: 9
MWG: 10, 15, 16
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| 14-16-Nov-23 | 17. Overview
of the Course / Paper Work Shop |
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| 16-Nov-23 |
END-TERM Take Home
Exam / Due Monday Nov 27 at 2:00 PM |
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| 18-26 - Nov-23 | Fall Break |
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| 28-30-Nov-23 |
No Class
on Tuesday, Exams returned and Reviewed on Thursday |
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| 5-7-Dec-23 | Extended Office Hours 1-4:00, T and Th
for Meetings and Advice on Final Papers |
Ideas for
Papers |
| 13-Dec-23 | 8-10 page paper due on an applied micro topic | |
| . | Grades: Midterm Exam | 35.00% |
| . | 8-10 page Paper | 25.00% |
| . | Endterm Exam | 35.00% |
| Homework |
5.00% |
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| . | Marginal extra credit for class participation (up to 5% bonus) |