Ebook: Modern Microeconomics

Bookboon, 2013. — 231 p. — ISBN: 978-87-403-0419-0This book provides the explanation of modern theories with simple examples. The consumer equilibrium, production function, game theory, information economics and social welfare are the major topics of this book. You will also find the systematic analysis of the consumer utility and behavior. It is most relevant topic to the decision making of consumer. The revealed preferences, rational choice, utility maximization, indirect utility function, Roy’s identity, Expenditure minimization function are the important topics of this book. Furthermore the book provides an explanation of modern theory of production function. There are different types of production functions and technology is used in each production function. Input output analysis, cost minimization, short run and long run costs, homogenous and heterogeneous production function, duality of costs and different types of technology in production function is strength of this book. The theory of Kalecki and kaldor of factor share in production function is also part of this book.Dr. Sanjay Rode has completed his PhD from Department of Economics, University of Mumbai in 2005. His area of research interest is Development Economics. He has worked on various national and international research projects in different areas in economics. He has written over twenty research papers and five books. He is working as a national economist on a project of the Asian Development Bank. He is teaching Macroeconomics to post-graduate students at the S. K. Somaiya College, University of Mumbai, India.Contents
Preface
Acknowledgement
Consumer preference and utility
Introduction
Preference relations
Utility function
Lexicographic ordering
Demand function
Revealed Preference Theory
The Weak Axiom of Revealed Preference (WARP)
Indirect utility function
Expenditure function
The expenditure minimization problem
The Hicksian demand function
The Von Neumann-Morganstern utility function
Measures of Risk Aversion
Questions
The Production Function
Inputs to output function
Technology specification
Input requirement set
The transformation function
Monotonic technologies
Convex technology
Regular technology
Cobb-Douglas technology
Leontief technology
The technical rate of substitution
Elasticity of substitution
Variation in scale
Revised technical rate of substitution
Homogenous and heterogeneous production function
The Envelope theorem for constrained optimization
Duality of cost and the production function
Michael Kalechi’s theory
Neo-Keynesian model of distribution (Kaldor Model)
Questions
Game Theory
Introduction
The rules of the Game
The prisoner’s dilemma: A dominant strategy
Equilibrium strategies
The Cournot model
Solution to the Cournot model by the Stackelberg equilibrium
The Bertrand paradox
Intertemporal dimensions
The folk theorem
Conclusion
Questions
Information Economics
Introduction
The asymmetric information model
The principal-agent model: The production game
Optimal contracts: The Broadway game
Moral hazard: Hidden information
Pooling and separating equilibrium: the salesman game
Efficiency wage hypothesis
Adverse selection
Lemon models
Adverse selection under uncertainty: Insurance game III
Signalling
Screening
Questions
General equilibrium and welfare economics
Introduction
The Walrasian equilibrium of a competitive economy
Stability proposition
Edgeworth’s exchange theory
Welfare economics
Pareto efficiency conditions
The Edgeworth box diagram
Welfare functions and the Pareto criterion
First theorem of welfare economics
The second theorem of welfare economics: (STWE)
Market failure and second best
Instances of market failure
The Coase theorem
Questions
Bibliography