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Department of Economics
College of Business Administration
Kuwait University
Microeconomic Theory (Econ 210)
Second Semester 2005-2006
Dr. Mohammad Alomar
Class Meetings: Saturday, Monday, and Wednesday
Office Hours: Saturday, Monday, and Wednesday
Or by Appointment
E-mail: [email protected]
Home page:
Course Objectives and Description: the main objective of the course is to allow
students to develop a comprehensive understanding of the fundamental concepts in
modern microeconomic theory and how these concepts help to understand markets
and behavior. The focus of this course is on individual decision making of consumers
and firms, and the nature of the corresponding optimization problem and the basic
properties of its solution. Moreover, the course will discuss market issues and how
pricing policies depend on the nature of the market and product.
Required Textbook: Varian, Hal V., Intermediate Microeconomics, A Modern
Approach, 6th edition, Norton, 2003.
Important Notes:
Attendance is required. Students who miss classes will receive warnings (3, 6, FA).
There are no make-up exams, no make up assignments, no “free grades”, and no
Exams will be held on Monday during lecture time.
Attendance and participation
Homework assignments
First Midterm
Second Midterm
Final Exam
Course Content:
1. Introduction: (Ch. 1)
 General background information
 Optimization and equilibrium
 Review of supply and demand and market equilibrium
 Comparative statics
 Pareto efficiency
2. Budget Constraint (Ch. 2)
3. Preferences and Utility:
 Assumptions about preferences
 Indifference curves
 Marginal rate of substitution
 Utility functions
4. Consumer Choice: (Ch. 3 & 4)
5. Demand: (Ch. 6)
 Normal and inferior goods
 Income offer curves and Engel curves
 The price offer curve
6. The Slutsky equation: (Ch. 8)
 The substitutions effect
 The income effect
 The law of demand
 Compensated demand curves
7. Market demand: (Ch. 15)
 Elasticities
 Elasticities and revenue
8. Technology: (Ch. 18)
 Inputs and outputs
 Properties of technology
 The technical rate of substitutions
 Returns to scale
9. Profit maximization, cost minimization, and cost curves: (Ch. 19, 20, &21)
 Short-run profit maximization
 Long-run profit maximization
 Cost minimization
 Short-run and long-run costs
 Average costs
 Marginal costs
10. Firm supply under pure competition, and the industry supply: (Ch. 22)
 Pure competition
 Supply decisions of the competitive firm
 The long-run supply curve
 The industry equilibrium in both the short-run and long-run
11. Monopoly and monopoly behavior: (Ch. 24 & 25)
 Profit maximization
 Linear demand curves and monopolies
 Inefficiencies of monopolies
 Price discrimination
12. Factor Markets: (Ch. 26)
13. Oligopoly: (Ch. 27)