# Reading Assignments - Fall 1998

Week 1 (9/10): Read mathematical appendix of M-W-G or Varian, the following topics: matrix notation for derivatives, homogeneous functions, concave and quasi-concave functions, implicit function theorem, continuous functions, maximization (constrained and unconstrained), envelope theorem.

Also read: Handout on existence of utility functions.

Week 2 (9/15, 9/17): Read about existence of utility functions under certainty and uncertainty.  Kreps has very chatty and inviting discussions of both of these topics, and if your math background is weak or you like concrete examples, these chapters are excellent.  I like using them to prepare lectures too.  The only thing to watch out for: he uses slightly different axioms than I do.  Studying the differences makes a great exercise!   Varian is very concise on the axiomatic developments, and probably doesn't add much beyond what we do in class, but gives clear treatment of applications.  (These are good to study for potential exam questions).  MWG gets all of the epsilons right, so if you felt concerned about the verbal arguments in class, this is the place to go.  But, as usual, it may be tough going for those without as much math background.

Also: keep working through the mathematical background material if yours is weak, perhaps going to Chiang or another more comprehensive source for more detail.

Week 3 (9/22, 9/24): Classical consumer theory.  This is treated in all books and you probably know your favorite by now. I especially recommend Kreps as hitting the level at which I expect you to understand the material, and for providing intuition. If you have not seen calculus-based intermediate microeconomics before, you definitely need to do some background reading. Nicholson's intermediate microeconomics textbook is a good choice. You should also review the mathematical appendices about constrained optimization theory and the envelope theorem.

Handout on consumer theory.

Week 4 (9/29, 10/1): Consumer theory, expenditure functions and applications to consumer's surplus and price indices.

Keep reading in your favorite text.  Nicholson has nice background (again).  Diamond and McFadden have an excellent article (on the reading list and on reserve in the library) on uses of the expenditure function in public finance that you may wish to read if you are interest in labor or public finance.  One of the problems on the problem set helps you work through some of the ideas from that paper.

Week 5 (10/6, 10/8): Finish price indices, market demand.  Comparative statics and producer theory.

Handout on producer theory and monotone comparative statics.

Week 6 (10/15): (Tentative) Finish producer theory comparative statics.  LeChatlier principle.

Week 7 (10/20, 10/22): (Tentative) Competition, markets, and monopoly.