College: Business & Economics
Department: Economics
Program: MSc in Economics
Year: I; Semester: I
Course Title: Advanced Microeconomics I
Instructors names: Adane Tufa (PhD) & Saba Yifredew (PhD)
Contact information:
[email protected],
[email protected]No Section Contents
1. Module to which the course
belongs:
1.1. Module Title Advanced Microeconomics
1.2. Type of Module Core course
2. Competencies • Demonstrate a deep understanding of core
microeconomic theories and their applications.
• Analyze and critique journal articles in
microeconomics, assessing the validity of the
assumptions and methodologies used.
• Apply microeconomic models to analyze consumer
and producer behavior in both developed and
developing country contexts.
• Utilize advanced mathematical techniques to solve
microeconomic problems.
• Assess the implications of inter-temporal choices and
decision-making under uncertainty.
• Apply general equilibrium models to analyze
complex economic systems.
3. Course Type (Lab, e- • Lectures: Theoretical exposition of core
learning, Seminar, microeconomic models and concepts.
Practicum/ Field • Problem-Solving Sessions: Hands-on practice with
Attachment, Senior mathematical models and economic scenarios.
Essay/Thesis/Dissertation) • Class Discussions: Critical analysis of research
papers and contemporary economic issues.
4. Course Identifiers
4.1. Course Code Econ 6111
4.2. Credit Point in ECTS 7
5. Prerequisite None
6. Course Description This course delves into the foundational theories and concepts
of microeconomics, focusing on consumer and producer
behavior, inter-temporal choice, decision-making under
uncertainty, and market structures. The course equips students
with a comprehensive understanding of advanced
microeconomic models and prepares them to critically engage
with academic literature in the field. Emphasis is placed on
developing analytical skills necessary for applying
microeconomic theories to real-world problems, particularly
in the context of developing countries
7. Learning Outcomes • Demonstrate a deep understanding of core
microeconomic theories and their applications.
• Analyze and critique journal articles in
microeconomics, assessing the validity of the
assumptions and methodologies used.
• Apply microeconomic models to analyze consumer
and producer behavior in both developed and
developing country contexts.
• Utilize advanced mathematical techniques to solve
microeconomic problems.
• Assess the implications of inter-temporal choices and
decision-making under uncertainty.
• Apply general equilibrium models to analyze
complex economic systems.
8. Course Contents . Microeconomic Theory – Basic Principles & Extensions
• Theoretical Models
• Economic Theory of Value
2. Consumer Theory
• Preferences and Choices
• Utility
• Demand Functions and Their Properties
• Substitution & Income Effects
• Slutsky decomposition
• Indirect Utility Function and Expenditure Functions
• Duality
• Welfare Implications of Price and Income Changes
• Separability and Market Demand: Applied Work
Specification
3. Theory of the Firm
• Technology Specifications
• Returns to Scale
• Homotheticity, Monotonicity, Convexity
• Elasticity of Substitution
• Profit Functions
• Conditional Factor Demands and Cost Functions
• Relationships between Profit and Cost Functions
• Cost Functions in Long- and Short-Runs
• Estimation of Production Functions
4. Inter-Temporal Choice
• Budget Constraints over Different Periods
• Preferences between Current and Future
Consumption
• Household Decision-Making
5. Uncertainty and Risk
• Risk vs. Uncertainty
• Expected Utility Theory
• Measuring Risk Aversion
• Prospect Theory
6. Market Structure
• Perfect Competition
• Monopoly
• Monopolistic Competition
9. Teaching and learning • Lectures: Theoretical exposition of core
techniques microeconomic models and concepts.
• Problem-Solving Sessions: Hands-on practice with
mathematical models and economic scenarios.
• Class Discussions: Critical analysis of research
papers and contemporary economic issues.
10. Assessments • Problem Sets (20%): Regular assignments to apply
and reinforce theoretical concepts.
• Midterm Exam (30%): A comprehensive test
covering the first half of the course.
• Final Exam (50%): A cumulative exam testing the
full range of topics covered.
11. The following are the course policies:
• Class attendance is mandatory as per AAU Senate
Legislation
• Students must switch off their mobiles during classes
and exams
• Using cell phones and tablets are not allowed in exam
rooms
• Acts of plagiarism in assignments, term papers and
other individual or group works result in serious
Course Policy punishments as per AAU Senate Legislation
• Students should submit their assignments on or
before agreed deadlines
12. Main Texts:
• Varian, H. (1992). Microeconomic Analysis (3rd ed.).
Norton.
Learning Resources • Jehle, Geoffrey, & Reny, Philip. (2011). Advanced
Microeconomic Theory (3rd ed.). Prentice Hall.
Additional Readings:
• Kreps, David M. (1990). A Course in Microeconomic
Theory. Princeton University Press.
• Rubinstein, Ariel. (2012). Lecture Notes in
Microeconomic Theory (2nd ed.).
• Gravelle, H., & Rees, R. (2004). Microeconomics
(3rd ed.).
• Rasmussen, E. (1989). Games and Information: An
Introduction to Game Theory. Oxford: Blackwell.
• Hargreaves-Heap, S., & Varoufakis, Y. (1997). Game
Theory: A Critical Introduction. London: Routledge.
