Intermediate Microeconomics II

Course Description 

This course is a sequel to Intermediate Microeconomics I. The emphasis will be on giving conceptual clarity to the student coupled with the use of mathematical tools and reasoning. It covers general equilibrium and welfare, and topics under information economics.

Course Outline 

1. General Equilibrium, Efficiency, and Welfare 

Multi-market equilibrium; partial and general equilibrium compared; Equilibrium and efficiency under pure exchange and production; 

Topics in Multimarket Equilibrium; Existance, uniqueness, and stability of equilibrium. 

Welfare economics 

Pareto Optimaility; the efficiency of Perfect Competition; efficiency of imperfect competition; external effects in consumption and production; inter-dependent utility function; taxation and subsidies; Social welfare function; the theory of second best. 

2. Market Failure 

Externalities; public goods and markets with asymmetric information.  

Readings: 

1. Hal R. Varian, Intermediate Microeconomics: A Modern Approach, 8thedition, W.W. Norton and Company/Affiliated East-West Press (India), 2010. The workbook by Varian and Bergstrom could be used for problems. 

2. C. Snyder and W. Nicholson, Fundamentals of Microeconomics, Cengage Learning (India), 2010. 

3. James M. Henderson and Richard E. Quandt, Microeconomic Theory: A Mathematical Approach, latest Edition.