Course ID: | FHCE 8150. 3 hours. |
Course Title: | Theory of Households, Consumer Economics, and Financial Behavior II |
Course Description: | A formal introduction to contemporary economic theories of
decision making. The goal is to understand the behavior of
economic agents, consumers and firms, and their interaction in
various market environments. Emphasis is placed on analytical
rigor and applications that motivate the use of different
mathematical techniques. |
Oasis Title: | Households Cons Econ Fin Beh |
Prerequisite: | Graduate student status or permission of department |
Semester Course Offered: | Offered fall semester every year. |
Grading System: | A-F (Traditional) |
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Course Objectives: | -Students will acquire a rigorous analytical understanding of
the standard microeconomic models of economic agents: consumers
and firms
-Students will understand the methods and analytical tools of
microeconomic analysis used in professional literature
-Students will be able to apply economic theory to a wide
variety of consumer problems and policies
-Describe how economic trade-offs and social values impact
public/private policy, and the success or failure of policies to
achieve intended outcomes |
Topical Outline: | 1. Overview of the course
1.1 The Minimum Wage: Review of supply and demand models
1.2 Microeconomic models, comparative statistics, and
optimization
2. Choice and the theory of demand
2.1 Rationality axioms, utility, and indifference curves
2.2 Constrained utility maximization, demand functions, indirect
utility, the expenditure function
2.3 Individual demand, income and substitution effects
2.4 Substitutes and complements, market demand, and elasticities
2.5. Applications: Food Stamps, Gift Giving, Consumer Price
Indices
3. Choice, uncertainty, and information
3.1 Uncertainty, risk, von Neumann-Morgenstern expected utility
4. Prices, perfect competition, general equilibrium and economic
efficiency
4.1 Economic efficiency and welfare analysis
4.2 General competitive equilibrium
4.3 Trade, comparative advantage, competitiveness, and
redistribution
5. Deviations from perfect efficiency
5.1 Externalities, public goods and regulation
5.2 Insurance, moral hazard and adverse selection
5.3 Market signaling
6. Information and Strategy: Game Theory and Network
Externalities
7. Work and leisure (labor supply) decisions
7.1 Household production function, utility maximization
7.2 Household specialization and exchange
8. Consumption and savings theory and applications
8.1 Intertemporal budget constraint, indifference curves, and
equilibrium
8.2 Absolute income, permanent income, and life cycle income
hypotheses |