Course introduction and plan

This course aims to build a solid and intuitive understanding of microeconomic theory on a foundation of rigorous mathematical modeling. Each topic follows the same arc: start from the economic question and the intuition behind it, develop the mathematical tools needed to answer it rigorously, and return to the intuition to interpret what the model delivers. The goal is a command of microeconomics where the formal results and the economic reasoning behind them reinforce each other.

As a pre-Master course, it is explicitly designed to bridge undergraduate and graduate microeconomic theory. Students should leave with a solid grasp of the standard intermediate toolkit, but presented with the notation, rigor, and problem-solving habits expected in graduate coursework, so that the transition to advanced theory is a continuation rather than a restart.

Textbooks

The course draws primarily on two complementary textbooks, both published by MIT Press:

  • Intermediate Microeconomic Theory: Tools and Step-by-Step Examples (Ana Espinola-Arredondo and Felix Munoz-Garcia) — [AF Int], the primary reference for most sessions.
  • Advanced Microeconomic Theory: An Intuitive Approach with Examples (Felix Munoz-Garcia) — [AF Adv], used where a more rigorous, graduate-oriented treatment helps bridge into advanced theory (notably consumer theory, monopoly, and choice under uncertainty).

Varian’s Intermediate Microeconomics with Calculus and the open-access CORE Econ: The Economy 2.0 — Microeconomics serve as supplementary references throughout.

Course structure

The course runs over 9 teaching sessions covering 7 core topics, followed by a 10th and final session dedicated to revision, exam preparation, and Q&A. Two topics — consumer theory and general equilibrium — are substantial enough to span two sessions each; the remaining five topics are each covered in a single session.

A tentative outline of the course, together with the associated reading for each session, is given below.

Lecture Topics References
1

Consumers and demand

  • Properties of the preference relation
  • Utility representation
  • Consumer choice and demand function
 Chapter 1 (AF Adv)
2

Consumers and demand (cont)

  • Properties of utility functions
  • Utility maximization, Walrasian demand and properties
 Chapter 1 (AF Adv)
3

Firms and supply

  • Firms and production function
  • Expenditure minimization problem and cost function
 Chapter 7-8 (AF Int)
4

Competitive markets and general equilibrium

  • Profit maximization problem
  • Short-run and long-run supply and partial equilibrium
 Chapter 9 (AF Int) or Chapter 24 (Varian)
5

Competitive markets and general equilibrium (cont)

  • General equilibrium in a pure exchange economy

  • Welfare theorems

 Chapter 9 (AF Int) or Chapter 24 (Varian)
6

Monopoly

  • Monopoly and profit maximization
  • Lerner index and IEPR
  • Welfare analysis and public policy
 Chapter 7 (AF Adv)
7

Game theory primer and applications in imperfect competition

  • Definition, solution concepts and representation
  • Common simultaneous and sequential games
 Chapter 12-14 (AF Int)
8

Externalities and public goods

  • Implications on the efficiency of competitive equilibria
  • Common policy remedies
 Chapter 17 (AF Int)
9

Choice under uncertainty

  • Lotteries and preferences over lotteries
  • Expected utility theory
  • Applications
 Chapter 5 (AF Adv)
10 Revision