14.121 Reading List

Choosing a Text

For your primary text, you may choose between Kreps, MasCollel-Whinston-Green (M-W-G), and Varian. I would recommend purchasing two of the three, which should serve you through the core micro sequence and after. Kreps is the most intuitive, M-W-G the most comprehensive and mathematically detailed, and Varian is the most concise. Students vary as to which approach works for them; you may find you like different books for different topics. Nicholson is an intermediate undergraduate text, which I use for 14.03; if your economics background is weak, you may find Nicholson easier going for getting the main ideas without as much mathematical detail. However, the level of detail in Nicholson will not be sufficient for this course. Lecture notes will serve as a guide as to which topics are required and which are not; not all topics will be covered in the texts.

Primary Texts: Choose between...

Supplemental Text (at an undergraduate level):

Additional Readings

All reading outside of the texts is optional except as indicated in class. Readings will be placed on reserve in the library, and are also available from my secretary (Michael Kreutz, E52-251 cubicle).

Course Outline with Readings

1. Introduction, Overview, and Tools

1.1. Overview of the Course

1.2. Introduction to Microeconomic Models

1.3. Mathematical Tools: Optimization, Lagrangians, and the Envelope Theorem

2. Choice and the Theory of Demand

2.1. Rationality Axioms, Utility, and Indifference Curves

2.2. Budget Constraints and Utility Maximization

2.3. Individual Demand

2.4. Duality, Indirect Utility, and Expenditure Functions

2.5. Revealed Preference

2.6. Taxes and Transfers

2.7. Price Indices

2.8. Market Demand and Elasticities

3. Production and Supply

3.1. Production Functions and Technology

3.2. Production Costs and Cost Minimization; Duality

3.3. Profit Maximization, Short and Long Run Supply

3.4. Comparative Statics in the Theory of the Firm

3.5. Alternative Models of the Firm

4. Prices and Markets

4.1. Partial Equilibrium Price Determination

4.2. Long-Run Equilibrium

4.3. Applied Competitive Analysis

4.4. Imperfect Competition and Market Power

5. Choice Under Uncertainty

5.1. Von-Neumann Morgenstern Expected Utility

5.2. Risks, Measuring Risk Aversion and Certainty Equivalents

5.3. Insurance

5.4. The Value of Information