We are trying to set up an economic discipline considering the behavior of individual agents and building from this foundation to a theory of aggregate economic outcomes.
By the end of this module students should be able to understand, analyze, and apply the following:
(a) Preference and choice, especially the role of the decision maker, the preference-based and the choice- based approaches.
(b) Consumer choice: the consumption set, the consumer’s Walrasian budget set and the consumer’s Walrasian demand function.
(c) Fundamentals of classical demand theory: utility maximization, expenditure minimization, and duality
(d) Aggregate demand and production: aggregate demand as a function of prices and aggregate wealth, the weak axiom, and welfare significance.
(e) Choice under uncertainty (expected utility theory), especially the theory of the individual’s and firm’s decision making.
Lectures and homework exercises