B09.2303.00,
Fall 1999
Sat. 12:20-3:10, MEC 2-70
Office Hours: Sat. 10-12 and by appoint., MEC 7-89
Voice: (212) 998-0864, Fax: (212) 995-4218
e-mail:
neconomi@stern.nyu.edu
WWW:
http://www.stern.nyu.edu/networks
Texts
R. S. Pindyck and D. L. Rubinfeld, Microeconomics, Fourth Edition, (Prentice Hall, 1994), ("PR"). There is an accompanying Study Guide by V. Suslow and J. Hamilton with additional exercises and review materials.
B. V. Yarbrough and R. M. Yarbrough, The World Economy: Trade and Finance, Fourth Edition (Dryden Press, 1997), ("YY").
My notes available at the bookstore and at http://www.stern.nyu.edu/networks/micnotes/micnotes.html provide you with a detailed outline of most of the material and are complementary to the main text. You will also be receiving occasional supplementary notes and solved exercises. The notes on the Economics of Networks are at http://www.stern.nyu.edu/networks/micnotes/netnotes.pdf and http://www.stern.nyu.edu/networks/micnotes/netnotes2.pdf.
Articles from the Financial Times, the NY Times, the Wall Street Journal, and the Economist will illustrate the application of our course to current events.
Coursework
There will be weekly homeworks. They will be handed in and graded. Homeworks will count for 10% of the total grade. Outlines of solutions will be distributed. Your tutor, Alberto Arispe-Bazan, will be available to help you with the exercises. You will have a chance to discuss the weekly exercises with him and get prepared to solve them. Your tutor will hold a weekly review session on Sat. 3:20 - 5:00 at MEC 2-70 (starting on September 18). He will also hold other tutoring hours (to be announced). The midterm (October 23) and the final exam (December 18, 12:20-2:20 pm) will consist mainly of exercises of the same sort as the ones in the homeworks.
Outline and Reading Assignments. You are expected to read the assigned chapters before the lecture. The assignments correspond roughly to weeks.
1. The Basics of Supply and Demand. PR, Chapters 1 and 2 except pages 31-56. Consumer Behavior. Choices of the Individual. PR, Chapter 3.
2. Individual and Market Demand. PR, Chapter 4 and chapter 2, pp. 31-56.
3. Choice under Uncertainty. PR, Chapter 5.
4. Technology of Production. PR, Chapter 6. Production Costs. PR, Chapter 7.
5. Profit Maximization. Competitive Market Supply. PR, Chapter 8.
6. Supply and Demand in Competitive Markets. PR, Chapter 9.
7. Monopoly. PR, Chapter 10, pp. 333-358. Price Discrimination. PR, Chapter 11. Midterm Exam.
8. Game Theory. Strategic Choice. PR, Chapter 13. Oligopoly. PR, Chapter 12, pp. 440-468. Monopolistic competition. PR, Chapter 12, pp. 433-439.
9. Pricing of Factors of Production. Labor Supply. Monopsony. PR, Chapter 14. Pricing of Capital. Evaluation of Projects. PR, Chapter 15.
10. Economic Efficiency. PR, Chapter 16. Comparative Advantage. YY, Chapter 2.
11. Government Policy on Markets and International Trade. Tariffs, Quotas, etc. YY, Chapters 6.
12. Failures of Competitive Markets. Asymmetric Information. PR, Chapter 17. Positive externalities in high technology markets. Networks. Negative externalities. Public Goods. PR, Chapter 18.