ECO 5301, Microeconomics I Fall `05

TR 9:30-10:45 A.M.
Classroom: CB 1.104

Instructor: Dr. Barry J. Seldon e-mail: seldon@utdallas.edu

Office: Green 3.806 Office Hours: Mon. 10:00-11:15
Office Phone: (972) 883-2043 or by appointment
Office Fax: (972) 883-2735 (Call my office to set appointment)

Course Description: This course is a first graduate course in microeconomic theory. It extends and
adds to topics covered in a standard intermediate microeconomics course. It will increase the
student’s sophistication in terms of microeconomic theory. In addition, the student will be exposed
to formal proofs of theorems. The student should also develop an understanding of how
microeconomic theory guides economic analysis, both theoretical and empirical. There will be in-
depth consideration of the theories of the household and the firm, utility maximization, profit
maximization in the various market structures through classical/neoclassical and game theoretic
approaches (which necessitates an introduction to game theory), and development of formal
relationships among various economic relationships. Consequences of loosening often-used
assumptions concerning utility and profit functions will be explored.

Advising Note: This course is required for the Ph.D. in Economics.

Prerequisite Knowledge: It is assumed that the student has taken Intermediate Microeconomics
(ECO 3310), undergraduate Mathematical Economics (ECO 4351), or their equivalents at another
university. The student should be comfortable with calculus and matrix operations from previous
coursework and should be taking graduate Mathematical Economics (ECO 5309) in the same
semester as this class.

Required Textbooks:
Hal Varian, Microeconomic Analysis, 3rd ed. (New York: W. W. Norton & Company), 1992.

Nicholson, Microeconomic Theory: Basic Principles and Extensions, 9th ed. (Thomson South-
Western), 2005.

Recommended Textbook:
Daniel Solow, How to Read and Do Proofs, 3rd ed. (New York: John Wiley & Sons), 2002.

Grades: Grades will be based on homework, a mid-term examination, and a final examination. The
mid-term and final exams are designed to last an hour and fifteen minutes.

Attendance Policy: Because lectures will 1) help you understand the textbooks and 2) include
material not covered in the textbooks, it is very important that you attend class. I know there may be
a class or two that you will feel compelled to miss for some reason or other. In that case, you need
not contact me; but you should contact a classmate or two and tell them you will need to get class
notes from them. Being forewarned, your classmate(s) may take more complete notes then they
otherwise would. In the event that you do miss a class, I strongly suggest getting notes from more
than one classmate because different classmates will have different opinions about what is
important.

Policy Regarding Examinations: The student is expected to take the exams in class at the same
time as his or her classmates. If the student does not take an exam with the rest of the class then he
or she will be given a different exam from the rest of the class. The questions are likely to be more
difficult, especially when the student has had more time to study than did his or her classmates.

Final Exam: Note that the Final Exam is scheduled for Thursday, Dec. 1, from 8:00-9:30 A.M. All
students will take the Final Exam at that time.

Homework: Homework will be assigned in class occasionally, and will be collected at the next
class meeting, when I will hand out answer sheets. Late homework will not be accepted. If you
can’t make it to class, give your homework to someone who will attend. The homework is
designed to give you insight and practice. I strongly encourage and expect you to form study groups
to discuss approaches to the problems and to compare your answers with other students. You will
learn a lot by doing so. Because the homework is intended to be a group effort, homework grades
are "acceptable" (10 points), "unacceptable" (5 points), or "not turned in on time" (0 points). The
homework will be "acceptable" if you turn in a good effort in your own handwriting (for
example, don't photocopy your classmate's answer and don't assign a classmate to write up
everyone's answer to one particular question). Because the homework is a group effort, everyone
should be able to earn an "acceptable" if everyone contributes to the effort.

Policy Regarding Grades of Incomplete: No grade of incomplete will be given except in the direst
of circumstances and with authoritative evidence regarding the need for such a grade.

Academic Dishonesty: Academic dishonesty will not be tolerated. Any student who cheats will be
subject to the harshest punishment applicable.

Schedule of Topics: Listed on the next page is a schedule for topics and readings to be covered in
class. A date for the mid-term exam is also noted. This schedule is tentative; we may slow down
when necessary or speed up when possible. For this reason, you need to attend class to know
exactly where we are. The date for the mid-term exam is subject to change; the mid-term exam will
be given after we have completed the material indicated in the schedule as being covered prior to
the midterm. If we cover the material sooner, the midterm will be given sooner, and if we complete
the material later, the midterm will be given later. In contrast, and as noted above, the date for the
final exam is fixed.
 Tentative Schedule for Semester

Note: Chapter 1 of Nicholson has a discussion of economics models and a review of

optimization techniques. Chapters 26 and 27 of Varian and C cover topics in mathematics. Look
over these chapters before beginning the first readings listed below. Some of the topics in the
Varian chapters may be beyond your knowledge at the beginning of the semester because you
will be covering similar topics in Mathematical Economics, but you should be aware that these
topics are covered in the Varian chapters. Thereafter, you will refer to these chapters from time
to time. Consider these chapters to be appendices, because the y really are: they are not meant to
be read after you have read all preceding chapters.

Note: “V” stands for the Varian Textbook; “N” stands for the Nicholson textbook.

Aug 22-26 & Topic: Production Technology and Production Functions

Aug 29-Sept 2 Readings: V Ch. 1; N Ch. 7 (through section ending on p. 199)

Sept 5-9 Topic: Profit Maximization

Readings: V Ch. 2; N Ch. 9

Sept 12-16 & Topic: The Profit Function, More on Cost Minimization, and the Cost Function
Sept 19-23 Readings: V Chs. 3, 4, 5 & 6; N Chs. 8 & 9

Sept 26-30 & MIDTERM EXAM on the Theory of the Firm1

Oct 3-7 Topic: Preference and Utility Maximization
Readings: V, Chs. 7 & 8; N, Chs. 3, 4, & 5

Oct 10-14 & Topic: Individual's Demand and Market Demand

Oct 17-21 Readings: V, Ch. 9 & Ch. 10 (through section 10.6); N, Ch. 6 (through section
ending on p. 167) & Ch. 7

Oct 24-28 Topic: Perfect Competition

Readings: V, Ch. 13; N, Ch. 10

Oct 31-Nov 4 Topic: Monopoly

Readings: V, Ch. 14 (through section 14.4); N, Ch. 13 (through section ending
on p. 404)

Nov 7-11 Topic: Imperfect Competition: Game Theory & Oligopoly

Nov 14-18 Readings: V, Ch. 15 & Ch. 16 (through section 16.12);
Nov 21-25 N, Ch. 14 & Ch. 15 (through section ending on p. 457) 2

1
The date of the midterm is not exact. The test will last one hour and fifteen minutes.
2
If we have sufficient time, we will cover more or all of these chapters. This will be announced
in class.