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The students should be able to
T
he focus of this course will be on general equilibrium, welfare, externalities and public goods. The course will also cover aspects of consumer behaviour not covered in previous courses.
The following is an outline of the topics covered:
General equilibrium analysis deals with how demand and supply conditions interact in several markets to determine the prices on several goods. This is different from partial equilibrium which deals with only the price of one good.
We study techniques that can be used to formalize ideas related to the distribution of welfare. We will focus on welfare functions, which provide ways of aggregating individual welfare.
An externality arises when the choices of some agents affect the production or utility of other agents. We will study the economic consequences of externalities.
A public good is a good that can be consumed simultaneously by everyone and from which no one can be excluded. Among other things, we will study in what amounts public goods should be provided. We will finally explore duality relations in microeconomic theory.
COURSE SUBJECT AREAS:
Allan Würtz
4 lectures and 2 exercise classes per week for 7 weeks.
Danish
Hal Varian: Intermediate Microeconomics
,
7
th
edition, W.W. Norton and Company
,
chapters 31-36 (pp. 540-666), 127 pages.
Hal Varian: Microeconomic Analysis, 3
rd
edition, W.W. Norton and Company, chapters 6-8 (pp.81-143), 17-18 (pp.314-357), 22-24 (pp.404-430), 134 pages.
Written examination of 4 hours duration jointly with
International economics and Growth (International økonomi og vækst).
EXAMINATION AIDS ALLOWED:
None