Microeconomics 2 John Hey. Lecture 1: plan for today Tutorials and teaching fellows. This lecture is...
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Transcript of Microeconomics 2 John Hey. Lecture 1: plan for today Tutorials and teaching fellows. This lecture is...
Microeconomics 2
John Hey
Lecture 1: plan for today
• Tutorials and teaching fellows.
• This lecture is about organisation and motivation.
• Who is John Hey?• Web site. (TFs and reps.) VLE.
• Introduction to module.
• What it is trying to achieve.
• Lectures.
• Assessment.
• Advised study method.
First a word about the module as a whole
• Autumn Term – taught by me – lectures 1 to 19 excluding lecture 17 – built on my text and my website.
• Spring Term – taught by Alan Krause.
• Examination will have two parts corresponding to the two terms. The exam on my part will be like the exam I have set in the past. All information is on the site.
Teaching Fellows/Tutors are Daniel Howdon, James Lomas, and Dominic Spengler.
Teaching fellows and tutorials
• TFs will have office hours each week – between them one hour a day each week.
• Tutorials are in Weeks 4, 6, 8 and 10 of term 1.
• Some of them may be before the relevant lectures; and this will help you to anticipate some of the lectures.
• Tutorials are a mixture of things; they are not mathematical exercises.
• Prepare for them in advance (as it tells you).
• Actively participate in the tutorials – don’t be a free-rider.
• After the tutorial do what it tells you to do, and hand in to your tutor if asked.
Tutorials Autumn Term
• Autumn Term Week 4: Tutorial 1: An allocation problem.
• Autumn Term Week 6: Tutorial 2: Demand.
• Autumn Term Week 8: Tutorial 3: Exchange.
• Autumn Term Week 10: Tutorial 5: Production possibility frontiers.
• (Tutorial 4, which you can find on this site, will not be covered this year.)
General comments about the module
• Read the introduction section on the VLE.• It is to get you thinking like economists...
• We understand indifference (human beings don’t)
• We know that “Everything in life is a trade off.”• Do not try and memorise things.• Try to understand concepts and ways of
thinking. Develop economic intuition.• Not mathematics (though it is there if you want/like it).
• Not memorisation.
What do (micro) economists do?
• They want to explain and predict economic behaviour; but crucially predict.
• To predict we first need to explain.
• To explain we need models to give structure.
• Why? Because we explain using past data. There is a lot of such data; we need to decide which to use. That is the role of theory.
• Theory assumes that people are rational. What does that mean?
Web site
• Everything that you need (and more) is there (including me and the module representatives).
• Powerpoint presentations (constantly revised). One for each chapter/lecture.
• Lectures in html format. One for each chapter/lecture.
• Lectures in Maple format (only for the afficionados).
• Tutorials. (Later ‘answers’.)
• But what about VLE?
Lectures
• They are on the site – both powerpoint overviews and the detailed html files.
• Smell both before the lecture.
• Come to the lecture and participate.
• Read both immediately after the lecture.
• Read the corresponding chapter in the module text: Intermediate Microeconomics: People are Different. This is obtainable in the Campus bookshop, £25.
The book: a bit of history
• I have taught Micro 2 for a long time – both in the UK and in Italy.
• I used to use Varian – he has an artist.
• I evolved my own course. I wrote the book.
• I (well Maple actually) drew the pictures…
• … they are accurate and are based on particular preferences/technology.
• Why the subtitle “People are Different”?
Part 1: Economies without production
• 1: Introduction
• 2: Gains from Trade
• 3: Discrete Goods: Reservation Prices, Demand,Supply, and Surpluses
• 4: Continuous Goods: Reservation Prices, Demand and Supply, and Surpluses
• 5: Preferences
• 7: Demand with Money Income
• 6: Demand and Supply with Income in the Form of Endowments
• 8: Exchange
• 9: Welfare
Part 2: Economies with production
• 10: Firms and Technology
• 11: Cost Minimisation and the Demand for Factors of Production
• 12: Cost Curves
• 13: Firm Supply and the Surplus of the Firm
• 14: Production Possibility Frontiers
• 15: Production and Exchange
Interlude
• 16: Empirical Analysis of Demand, Supply and Surpluses
Part 3: Applications and implications of the basic tools not taught by me this year except for chapters 18 and 19
• 17: Aggregation• 18: Revealed Preference and Revealed Technology• 19: Compensating and Equivalent Variations• 20: Intertemporal Choice• 21: The Discounted Utility Model• 22: Exchange in Capital Markets• 23: Choice under Risk• 24: Expected Utility Model• 25: Exchange in Capital Markets• 26: The Labour Market
Part 4: Market inefficiencies of various types not taught by me this year
• 27: Taxation
• 28: Monopoly and Monopsony
• 29: Natural Monopoly and Discrimination
• 30: Game Theory
• 31: Duopoly
• 32: Externalities
• 33: Public Goods
• 34: Asymmetric Information
Office hours and the Discussion Board within VLE
• Office hours will be on the Module website.
• However we feel that use should be made of the Discussion Board within VLE.
• In principle it is more efficient...
• ... and we, as economists, are interested in efficiency.
Assessment of the Autumn Term material
• The examination will be different from those before 2011-2012.
• The examination will be set and marked by the computer.
• The examination has been strengthened relative to 2011-2012
• There will almost certainly be a question on each lecture/chapter covered by me. So study them all!
• You will be penalised for wrong answers.• There are two specimen papers on the site. We will go
through them in two lectures later in the year.
Advised study method
• (See also what I have said about lectures.)
• You learn economics by doing economics.
• So the tutorials are crucial, though they are (obviously) not a direct preparation for the examination. We will do that later.
• There are also Review Questions in the book.
• Form study groups of you and your friends and work through things together.
• Use your tutor, the student reps and me to resolve any issues.
Preparation for Lecture 2
• Review definition of a Reservation Price for a buyer and for a seller.
• To keep it simple, suppose the good is discrete and the buyer/seller wants to buy/sell at most one unit.
• Reservation price is maximum/minimum that the buyer/seller would pay/accept.
• Profit/Surplus if buyer/seller buys/sells at price below/above reservation price?
Conclusions
• Come to all the lectures.
• Smell the lectures before the lecture and read them again afterwards.
• Prepare for the tutorials, participate in them actively, and review them afterwards.
• Form study groups; learn together.
• Study constantly throughout the year.
• Study, learn and enjoy.