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.
|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 with answers
Final 2012 with some answers
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
|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.
(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
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. )
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
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
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?
An easy one?
If this problem made you want to cry, maybe economics isn't for you.
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
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
Indirect Utility and Continuity
Homework to do but not turn in:
Jehle and Reny Exercises A. 2.9, A.2.19, A.2.20, A.2.24
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
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
Arrow Chenery Minhas Solow paper on CES production functions
Remarks by Arrow on history of ACMS paper
|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?
| Read Bernoulli
on Expected utility (required) and
Anscombe and Aumann (optional)
Read Jehle and Reny Chapter 2, section on Uncertainty
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.
|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
Soldiers of Fortune
Homework to hand in: Work the problems at this link.
Jehle and Reny Problems 2.32, 2.33, 2.34
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
| Pure Exchange
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