University of Hong Kong s1
University of Hong Kong
Faculty of Business and Economics
ECON6021: Microeconomic Analysis
First Semester 2007-08
This version: August 27, 2007
Class Time: Saturday 2-5pm (Section A) Friday 2-5pm (Section B)
Venue: KKLG102 TS303
Instructors: Kam-Ming Wan Y. Stephen Chiu
1111 K.K. Leung Building 918 K.K. Leung Building
Office Hours: Thursday 2-3:30pm Thursday 2-3:30pm
or by appointment or by appointment
Phone: 2219-4180 2859-1056
Email:
Web page: http://www.econ.hku.hk/~kmwan http://www.econ.hku.hk/~schiu
Course Description
This object of this course is to give a general overview of concepts, techniques and tools of microeconomics. The first half of the course, taught by Dr. Wan, covers more standard topics such as consumer theory, producer theory, competitive market equilibrium and monopoly. Constrained optimization problem, the Lagrangian multiplier method, and the envelope theorem will also be introduced. The second half, taught by Dr. Chiu, covers newer topics such as game theory, information economics, oligopoly etc., and a game theoretic approach will be used. The level of technicality will be a bit higher than the intermediate level. While the instructors will try to point to real world applications whenever possible, the course primarily aims at providing you a firm grip of the microeconomics theory in order to facilitate your learning in other courses of the program.
Despite no prerequisite of statistics and probability, you are supposed to have some knowledge of calculus, at the level of
· Chiang’s Fundamental Methods of Mathematical Economics, any edn.
Students with deficiency in math should make it up themselves before taking this course.
Compared with another course on microeconomics (ECON6011, don’t be misguided by the smaller code number!), our course is mathematically less sophisticated and presumes a lesser amount of economic background. A student with weak background in economics and mathematics should first take our course as a compulsory one and then consider taking ECON6011 as an elective. As a rule of thumb, a student with his/her first degree received more than three years ago should take our course first unless he/she is a full time student. On the other hand, a student with stronger economic or math background (he or she who received an Econ/Fin degree or Math/Engineering degree in the last three years) should take ECON6011 in lieu of our course. For other cases, you are welcome to consult the instructors. (Note that our regulations preclude concurrent enrolment of both ECON6021 and ECON6011, as well as enrolment of ECON6021 after successful completion of 6011.)
Texts and References
For the second half of the course, we will use the following text closely,
· Watson, Joel, Strategy: An Introduction to Game Theory, latest edition, Norton.
You are recommended to have a copy of it. For the first half, we won’t follow any text closely, but the following are generally the best books you would want to consult.
· R. Frank, Microeconomics and Behavior, 6th edition, McGraw-Hill (2006)
· W. Nicholson’s Microeconomic Theory: Basic Principles and Extensions, 8th edition, South-Western.
Our course will be delivered at a level more advanced though. More advanced references include
· Silberberg and Suen’s The Structure of Economics: A Mathematical Analysis, 3rd edition, McGraw Hill (2000)
· Varian’s Microeconomic Analysis, latest edition, Norton.
News and Downloadable materials:
The two instructors maintain separate websites for their own parts, but general information about the course is available from Dr. Chiu’s course page: http://www.econ.hku.hk/~schiu.
Course Learning Outcomes
The course is to (i) give a general overview of concepts, techniques and tools of microeconomics; (ii) use real world applications to illustrate the tools and principles; and (iii) develop a firm grip of the microeconomics theory in order to facilitate students’ learning in other courses of the program.
Measurement of Learning Outcomes
1. Homework assignment will enable students to develop their problem solving skills.
2. Two examinations will test students’ understanding of basic concepts and their ability to evaluate, integrate and apply knowledge learned in the course.
3. Classroom discussion and activities help foster and help measure students’ understanding.
Assessment
Provided that the minimum attendance requirement is met, your course grade will be determined as follows:
Assignments 10%
class participation 6%
mid term 42%
final exam 42%
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total 100%
A final letter grade will be given which is a monotonic transformation of your numeric grade.
Assignments
There will be a few assignments. There are two reasons why you should hand in your assignments. First, the assignments allow you to solidify the knowledge you learn in class, and is a good preparation for the midterm and final exam. Second, the assignments themselves are part of your overall grade. We do not expect you to have prefect answers in your assignments. Thus the grading of the assignments will stress more on whether you have put in effort, rather than on whether your answers are correct.
Exams
There will be one mid term and one final exam. The mid term is tentatively scheduled for October 27 (Sat) for both sessions; the final exam's schedule will be announced by the university in due course.
Class Conduct
Students are expected to respect your instructors and your fellow students, and be considerate to others. You are required to arrive on time and should not enter the classroom 15 minutes after the class’ scheduled starting time. If you have to leave the class early, please sit near the door and exit quietly. If you fail to inform the instructor before you leave, no credit will be given for your class attendance. A certain rate of attendance is expected.
Academic Integrity
Please be aware that plagiarism is a serious misconduct that may lead to a failure of the course and possibly even more serious penalties.
Survival Tip
Because economics is a problem-solving discipline, the only way to develop a knack for formulating and solving problems is through hands-on experience. Simply attending the lectures, reading the text, and reviewing your notes will not be enough to master the techniques presented in class. To do well in this course you will need to spend a fair amount of time outside of class solving problems.
Meeting schedule
The Friday session shall meet on Sept 7, 14, 21, 28, Oct 5, 12, 27 (Sat, mid term test), Nov 2, 9, 16, 23, and 30.
The Saturday session shall meet on Sept 8, 15, 22, 29, Oct 6, 13, 27 (mid term test), Nov 1, 10, 17, 24, and Dec 1.
Course Outline
The course is divided into two parts of equal length. The first half covers more conventional topics while the second half covers newer ones.
Part I:
Topics Readings (Chapters in Nicholson, Frank, and Watson)
Introduction 1-2 (N), 1-2 (F)
Consumer Theory 3-6 (N), 3-5 (F)
Producer Theory 7-9 (N), 9-10 (F)
Competitive Market Equilibrium 10-12 (N), 2 & 11 (F)
Monopoly 13 (N), 12 (F)
Part II:
Representing Games 1-5 (W)
Static Games 6-10, 13 (W)
Dynamic Games 14-16 & 20-23 (W)
Information and Games 24-29 (W)
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