Topics:
1.Budget Constraint: Idea of budget constraint, Composite Goods, Properties of the budget set, Changes in the Budget Line, the Numeraire, Applications: taxes, Subsidies and Rationing, the Food Stamp Program.
2. Preferences: Consumer Preferences, Assumptions about preferences, Indifference curves, Examples of preferences. Perfect substitutes, Perfect complements, Bads, Neutrals, Satiation, Discrete goods, Well-behaved preferences (includes non-convex preferences), The marginal rate of substitution, Other interpretations of the MRS.
3. Utility: Idea of the utility function, Constructing a utility function, Examples of utility functions: Perfect substitutes, Perfect complements, Quasilinear preferences, Cobb-Douglas preferences, Marginal utility, Marginal utility and MRS.
4. Choice: Optimal choice, Consumer demand, Examples: perfect substitutes, perfect complements, Neutrals and bads, Discrete goods, Concave preferences, Cobb-Douglas preferences, Income tax versus quantity tax.
5. Demand: Normal and inferior goods, Income offer curves and Engel curves, Ordinary goods and the Giffen goods, Price offer curve and the Demand curve, Examples of demand curves: Perfect substitutes and complements, Discrete good, Substitutes and complements, Inverse demand function.
6. Revealed Preference: Idea of revealed preference, Principle of Revealed Preference, recovering preferences, Weak Axiom of Revealed Preference, Checking WARP, Strong Axiom of Revealed Preference, Checking SARP.
7. Slutsky Equation: The Substitution Effect, The Income Effect, Sign of the substitution effect, Total change in demand, The law of demand, Slutsky substitution effect versus Hicks substitution effect, Compensated demand curves.
8. Consumer's Surplus: Constructing utility from demand, Interpretation of consumer's surplus, Interpreting the change in consumer's surplus, Compensating and equivalent variations, Producer's surplus, Applications: Calculating benefit-cost analysis and rationing.
9. Technology: Inputs and outputs, Technological constraints, Examples of technology: Fixed proportions, Perfect substitutes, Cobb-Douglas, Properties of technology: Monotonicity and convexity, Marginal product, Technical rate of substitution, Diminishing marginal product, Diminishing TRS, The long run and the short run, Returns to scale.
10. Profit Maximization: Idea of profit, Organizational structure of firms, Fixed and variable factors, Short-run profit maximization and comparative statics, Long-run profit maximization, Inverse factor demand curves, Relation of profit maximization with returns to scale, Weak Axiom of Profit Maximization (WAPM).
11. Cost Minimization: Concept of cost minimization, Revealed cost minimization, Returns to scale and the cost function, Long-run and short-run costs, Fixed, Quasi-fixed costs and sunk costs.
12. Cost Curves: Average costs, Marginal costs, Relationship between marginal costs and variable costs, Marginal cost curves for two plants, Long-run costs, Discrete levels of plant size. Long-run marginal costs.