Intermediate Microeconomic Theory II ECON 384 - B1 Winter 2015
Instructor: David Brown, Tory 9-24, [email protected].
Office Hours: T & TR 12:30 - 1:30 PM or by appointment.
Course Time: T & TR 3:30 - 4:50 PM Course Location: T 1 91
Course Description:
This course is a continuation of Intermediate Microeconomic Theory (ECON 281). The objec- tive of this course is to expand on the analytical methods introduced in ECON 281 and to use microeconomic theory to address and explain more advanced real world problems. Topics include intertemporal choice, choice under uncertainty, oligopoly models, game theory, externalities, public goods, asymmetric information, and general equilibrium models.
Course Objectives:
The objective of this course is to further your understanding of microeconomic theory and its applications to the real world. In particular, we relax a wide array of the assumptions made in prior courses. The course expands your knowledge on how to create formal economic models to approximate real world behavior. Further, you should gain critical thinking skills and a deeper understanding of economic and social problems in practice.
Required Textbook: Pindyck R. S. and Rubinfeld D. L., Microeconomics, 8th Edition, Prentice Hall, 2012 (ISBN: 978-0132857123).
Note: I will cover concepts that are not in the textbook. The textbook should be viewed as a complement to the lectures, not a substitute. You are responsible for the material covered both in the textbook and the in-class lectures. Therefore, class attendance is very important to do well in this course. If you have difficulty understanding the material, please come see me in my office hours or schedule an appointment.
Additional Resources*:
(1) Hal Varian, Intermediate Microeconomics: A Modern Approach, W. W. Norton & Company (2014).
(2) Walter Nicholson and Christopher Snyder, Intermediate Microeconomics and Its Application, Cengage Learning (2009).
(3) Geoffrey Jehle and Philip Reny, Advanced Microeconomic Theory, Prentice Hall (2011).
* Note: These books are not required for this course. They may be useful references for supple- mentary material.
Prerequisites:
ECON 281 (Intermediate Micro I), ECON 299 (Quantitative Methods), and MATH 113 (Cal- culus I). The course will be taught under the assumption that you are familiar with the basic microeconomic theories of the firm, consumer choice, and competitive market equilibrium. I also expect that you have been introduced to the analysis of monopoly, monopsony and various methods of price setting. If you are not familiar with the basic economic analysis that should have been
covered in ECON 281, or if you did not do very well in ECON 281, you should consider reviewing chapters 2-4, 6-9, and 14 of the text.
Basic calculus (derivatives) will also be used. This course will use both math and conceptual explanations for many of the chapters, so you should have a grasp of logic, algebra, probability, and basic (introductory) calculus to do well.
Course Website:
Course information including the course outline, assignments, handouts, and grades will be posted on the eClass Moodle system. If you have questions about how to use the website, contact the IT resources, please do not contact me.
Problem Sets:
Several Problem Sets will be assigned throughout the semester. They will contain a mix of problems from the book and problems I post on the course website. These problem sets are collected at the beginning of the class period. Late problem sets will not be accepted for any reason.
Grade Policy:
Your course grade will be based on the Problem Sets, a Midterm, and a cumulative Final Exam. The Problem Sets are worth 30%. The Midterm and Final Exams are worth 30% and 40%, respectively. The Final Exam will be cumulative. Although more weight will generally be given to the material covered after the Midterm.
The questions on the exams will be short answer questions and will involve applying the basic tools of economic analysis discussed in class. The exams may require the manipulation of diagrams and formal model derivations. The explanation in words of the economic intuition underlying an answer will be an important part of the exams. There will be no multiple choice questions on the exams.
Exam/Assignments Percentage Due Dates
Problem Set 1 10% February 12
Midterm Exam 30% February 26 (In-Class)
Problem Set 2 10% March 17
Problem Set 3 10% April 9
Final Exam 40% April 23 at 2:00 PM
Note: The due dates on the problem sets are subject to change.
There is no pre-set distribution of grades for this course. The grade distribution will generally fit the target distribution for a 300-level course, but the distribution of individual classes may vary.
Both absolute performance and relative performance to the rest of the class will be considered in assigning letter grades.
Attendance:
While there is no explicit attendance policy, I strongly urge you to attend every class meeting as there will be questions on the Homeworks and Exams from the lectures. I will follow the organization of the book. However, there will be material covered in the class lectures that is not directly detailed in the book. You are responsible for all material covered in class, and all the chapters we cover from the text.
Policies:
Policy about course outlines can be found in 23.4(2) of the University Calendar. (GFC 29 SEP 2003)
• Late Assignments and Missed Midterms: There will be no make-up midterm exam or extra credit essays. If you are not able to take your midterm exam because of a legitimate reason, the weight of the midterm exam will be transferred to the final exam. If you miss the exam because of a medical reason, please submit the Medical Declaration Form to the Faculty. Late problem sets will not be accepted for any reason. If you will miss the final exam, you may apply to your Faculty for a deferred exam. Note that a deferred final exam will not be approved if a student, excluding the final exam, has completed less than half of the assigned work (Calendar, 23.5.6(2)).
• Academic Integrity: The University of Alberta is committed to the highest standards of academic integrity and honesty. Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Stu- dents are particularly urged to familiarize themselves with the provisions of the Code of Student Behaviour (online at www.ualberta.ca/secretariat/appeals.htm) and avoid any be- haviour which could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University. (GFC 29 SEP 2003). Policy about the course outlines can be found in 23.4(2) of the University Calendar. (GFC 29 SEP 2003).
• Learning Environment: The Faculty of Arts is committed to ensuring that all students, faculty and staff are able to work and study in an environment that is safe and free from discrimination and harassment. It does not tolerate behaviour that undermines that environ- ment. The department urges anyone who feels that this policy is being violated to (1) discuss the matter with the person whose behaviour is causing concern; or (2) if that discussion is un- satisfactory, or there is concern that direct discussion is inappropriate or threatening, discuss it with the Chair of the Department. For additional advice or assistance regarding this policy you may contact the student ombudservice: http://www.ombudservice.ualberta.ca/. Information about the University of Alberta Discrimination and Harassment Policy and Procedures can be found in the GFC Policy Manual, section 44 available at http://gfcpolicymanual.ualberta.ca/.
• Academic Accommodation: If you require academic accommodation due to a disability, please see me at the beginning of the semester to discuss your needs. For more information, please check the web site at http://www.ualberta.ca/ssds.
• Calculators: You may need a simple calculator for the exams. Programmable calculators will not be allowed.
Course Outline:
Topics and readings may be added or deleted as the term progresses. The order of the topics may also be changed. PR is an abbreviation for the textbook by Pindyck and Rubinfeld.
Week Topic Readings
(1) Introduction
(2-3) Choice under Uncertainty PR CH 5
(4-5) Intertemporal Choice PR CH 15
(5-6) Introduction to Game Theory PR CH 13 (7) Review of Monopoly and Market Power PR CH 10 - 11
(7-9) Oligopoly PR CH 12 & Handout
(10-12) General Equilibrium PR CH 16
(12-14) Externalities and Public Goods PR CH 18
(14) Asymmetric Information PR CH 17
