Course syllabus

Mikroekonomi - individuella val
Microeconomics - Individual Choice

EXTP15, 7,5 credits, A (Second Cycle)

Valid for: 2012/13
Decided by: Education Board 1
Date of Decision: 2012-03-27

General Information

Elective for: I4, Pi4
Language of instruction: The course will be given in English

Aim

The purpose of the course is for the student to gain knowledge and abilities in microeconomics regarding individual choice.

Learning outcomes

Knowledge and understanding
For a passing grade the student must

 deepen their knowledge of the microeconomic theory of choice by individuals and firms in a perfectly competitive context, and their knowledge general equilibrium in exchange economies and production economies,

·         understand and be able to describe the duality between technologies on the one hand, and cost and profit functions on the other,

·         understand and be able to describe models of individual choice under certainty and uncertainty,

·         understand and be able to describe the dual approach to consumer theory,

·         understand and be able to describe conditions for general equilibrium in exchange economies and production economies,

·         understand and be able to describe the first and second theorem of welfare economics,

understand and be able to describe time preferences with exponential and hyperbolic discounting.

Competences and skills
For a passing grade the student must

 apply the theory to non-parametric efficiency analyses of firms and industries,

·         apply the theory of individual choice in specific examples, such as the degree of insurance and the composition of asset portfolios,

apply general-equilibrium analysis in practice and relate the results obtained to partial-equilibrium analysis.

Judgement and approach
For a passing grade the student must

Students shall be able to describe and discuss their knowledge.

Students shall be able to acquire further knowledge in the area with little guidance or support.

Contents

In the first part of the course the technology encountered by a firm is modelled, and the circumstances under which all relevant technological information is captured by purely economic objects are demonstrated. It is also shown how efficiency can be analysed by means of DEA analysis. Next, individual choice is considered and a number of representation theorems are derived for choice under both certainty and uncertainty. A number of applications of preference theory are considered, such as its application to asset markets, as well as other kinds of choice under uncertainty. The course also gives a thorough treatment of the dual approach to consumer theory, providing a full characterization of the implication of individual utility maximizing behaviour in a market context. Basic general-equilibrium analysis is covered and the first and second welfare theorems are derived. Finally, intertemporal choice is considered, and the distinction between standard (exponential) and hyperbolic discounting is stressed.

Examination details

Grading scale: TH
Assessment: The examination is based on a written examn and home assignments.

Admission

Admission requirements:

The number of participants is limited to: No
The course might be cancelled: If the number of applicants is less than 8.
The course overlaps following course/s: TEK145, TEK137

Reading list

Contact and other information

Course coordinator: Professor Fredrik Andersson, fredrik.andersson@nek.lu.se
Further information: Identical to NEKP21