Microeconomics

Objective

This course introduces the elementary methods and concepts used in formalising economic behaviour and the operation of markets. It presents two complementary approaches to economic analysis: the normative approach, which consists of defining the optimal allocation of goods among agents; and the positive approach, which seeks to explain how the economy works on the basis of agent behaviour and which equilibrium situation is the result. Initially presented in the context of a static economy free of hazards, these approaches are gradually extended to include intertemporality and uncertainty. We then try to make the link between the two approaches (normative and positive) in the case of an "ideal" market economy where competition is perfect and price adjustments always bring supply and demand into alignment, before introducing the second-year courses, which include the problems of externalities and public goods, imperfect information and anticompetitive practices.

Planning

1. Description of the economy - optimal allocations and organisation -Representation of consumer preferences. Pareto optimum in an exchange economy. Representation of production. Optimality in an economy with production.
2. Behaviour of agents and equilibrium in a market economy -Demand, supply and equilibrium in the market for a good. Consumer behaviour. Producer behaviour. General competitive equilibrium. The operation of markets with intertemporality and uncertainty; stock exchange and insurance.
3. Central theorems of welfare economics in question -Optimum and equilibrium: central theorems of welfare economics. Accounting for time and uncertainty; incomplete markets. Imperfect competition. A few examples of inefficient competitive mechanisms

References

 Picard, P. Eléments de microéconomie : théorie et applications. Paris : Montchrestien, 1994. 587 p. Domat économie. ISBN 2-7076-0611-1. [63 PIC 00 A]
 Jullien, B., Picard, P. - Eléments de microéconomie : exercices et corrigés. Paris : Montchrestien, 1994. 415 p. Domat économie. ISBN 2-7076-0623-5. [63 PIC 00 B]
 Mas-colell, A., Whinston, M.D., Green, J.R. - Microeconomic theory. London ; New York : Oxford university press, 1995. ISBN 0-19-510268-1 [63 MAS 00 A]