Economics 111: Intermediate Microeconomics
Spring 2009
Pedro Dal Bó
pdalbo@brown.edu

Classes: I am teaching two sections of this class so please remember which section you are in (In this webpage I only specify a section when an item varies by section).

Office hours: T 1-2:30pm at Robinson Hall 302B. If you have any questions or suggestions please drop by. Office hours is a great learning opportunity. (Please do not come just to talk about grades).

TAs:

Remember to attend TA conferences from your section!! (C1s for section 1 and C2s for section 2 in Banner)

Course description: The focus of the course is the fundamental microeconomics tools that economists use to explain a variety of social phenomena. The course covers the following topics: what economics is about, consumer theory, exchange economies, production theory, partial equilibrium, general equilibrium with production, externalities, monopoly, game theory, uncertainty and asymmetric information.

Math: Calculus is a prerequisite (differentiation, partial differentiation and simple optimization methods). The TA will review the basics in the first weeks.

Grading:
Midterm 1: February 19th, 25%.
Midterm 2: March 19th, 25%.
Experiments and homeworks: 10%.
Final: 40% This is a cumulative exam: all the material covered during the semester is included for the final.

REVIEW SESSIONS:
Friday May 8th: 4-5PM Wilson 101.
Wednesday May 13th: 4-5PM Salomon 003.

Remember to bring your Brown ID to the final!

You must take all exams with your registered section. There will be no make-up exams for the midterms. If you miss any of the two midterms the other midterm will count 35% and the final 55%. If you take both midterms, you cannot choose which one will count. If you will not be able to take the final and one of the midterms in the assigned dates I advice you to enroll in another section.

Textbooks:
Intermediate Microeconomics: A Modern Approach (6th or 7th edition) by Hal R. Varian. (V) . When chapter numbers differ by edition, the chapter number for the 7th edition are added in parenthesis.
The Armchair Economist: economics and everyday life by Steven E. Landsburg. (L)

Course Outline:

1. Introduction: What economics is about.
V1 and L1,2,4,5.

Math Review to be covered by TAs on their first conference. Homework 0 Answer key

2. Consumer Theory.
V2-6 and L13 (pages 127-129).
To read about the search for Giffen goods go here.

Homework 1 (Due on TA Conferences Februrary 5th or 6th) Answer key

Homework 2 (Due on TA Conferences Februrary 12th or 13th) Answer key

Midterm 1: February 19th, covers topics 1 to 2.
Practice Midterm Answer Key Midterm05 Answer Key Midterm 06 Answer Key Midterm 08 Answer Key (Past midterm ones have covered topic 3 which is not going to midterm 1 this year. Don't worry about questions asking about Edgeworth boxex, Pareto efficiency and equilibria.) MidtermS109 Answer Key MidtermS209 Answer Key

3. Exchange Economy.
V30 (V7th 31).

Homework 3 (Due on TA Conferences March 5th or 6th) Answer key

4. Production Theory.
V18-20, 21.1-21.3, 22.6-22.7 and 23.1-23.3. Returns to scale graphs

Homework 4 (Due on TA Conferences March 12th or 13th) Answer key

5. Partial Equilibrium.
V16 and L7,8,10.

Homework 5 (For practice only!) Answer key

Midterm 2: March 19th, covers topics 3, 4 and 5.
Practice Midterm Answer Key Midterm05 Answer Key Midterm06S2 Midterm06S3 Answer Key S02 Answer Key S03 Answer Key S01 Answer Key S02 Midterm09S1 Midterm09S2 Answer Key S1 Answer Key S2

6. General Equilibrium with Production
V31 (V7th 32).
A nice cite: "...he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it." Adam Smith, The Wealth of Nations, B.IV, Ch. 2.

7. Externalities.
V33 (V7th 34)and L9.

8. Monopoly.
V24,25 and L16.

Homework 6 (Due on TA Conferences April 9th or 10th) Answer key

9. Game Theory.
V28,29.
Optional Readings: "Professionals Play Minimax" by Palacios-Huerta for soccer fans and "Minimax Play at Wimbledon" by Walker and Wooders for tennis fans. For a discussion on the importance of Nash Equilibrium see "Nash Equilibrium and the History of Economic Theory." You can go here to learn how not to shoot a penalty and here and here to read about the Noble Prize received by five important game theorists.

10. Oligopoly.
V27 and L17.

11. Uncertainty.
V12.

Homework 7 (Due on TA Conferences April 23rd or 24th) Answer key

12. Asymmetric Information. (It was not covered in class. It does not go for the final)
V36 (V7th 37) and L3.

REVIEW SESSIONS:
Friday May 8th: 4-5PM Wilson 101.
Wednesday May 13th: 4-5PM Salomon 003.

Practice Final Answer Key Final 05 Answer Key
Final 06 Final 09 (No answer keys...)

Academic Support Center Tutoring Program:
"Service of a qualified undergraduate or graduate student tutor may be available to any student who desires academic resources to meet the demands of courses in which s/he is currently enrolled."