Lecture Notes Microeconomic Theory
Guoqiang TIAN Department of Economics Texas A&M University College Station, Texas 77843 (
[email protected]) January, 2004
Contents 1 Overview of Economics 1.1
1.2
I
1
Nature and Role of Modern Economics . . . . . . . . . . . . . . . . . . . .
1
1.1.1
Modern Economics and Economic Theory . . . . . . . . . . . . . .
1
1.1.2
The Standard Analytical Framework of Modern Economics . . . . .
2
1.1.3
Key Assumptions Commonly Used or Preferred in Modern Economics
4
1.1.4
Roles of Mathematics in Modern Economics . . . . . . . . . . . . .
5
1.1.5
Conversion between Economic and Mathematical Languages . . . .
5
1.1.6
Limitation and Extension of an Economic Theory . . . . . . . . . .
6
1.1.7
Distinguish Necessary and Sufficient Conditions for Statements . . .
7
Partial Equilibrium Model for Competitive Markets . . . . . . . . . . . . .
8
1.2.1
Assumptions on Competitive Market . . . . . . . . . . . . . . . . .
8
1.2.2
The Role of Prices . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
1.2.3
The Competitive Firm’s Profit Maximization Problem
9
1.2.4
Partial Market Equilibrium . . . . . . . . . . . . . . . . . . . . . . 11
1.2.5
Entry and Long-Run Equilibrium . . . . . . . . . . . . . . . . . . . 12
. . . . . . .
General Equilibrium Theory and Social Welfare
2 Positive Theory of Equilibrium: Existence, Uniqueness, and Stability
14 16
2