Preface
1 The nature and scope of microeconomics
A Concepts and methods
B The economic and social framework
2 The theory of the consumer
A The preference ordering
B The feasible set
C The consumption decision
D The comparative statics of consumer behaviour
E Offer curves and net demand curves
Appendix 1 : The lexicographic ordering
Appendix 2 : Existence of a utility function
3 Consumer theory : duality
A The expenditure function
B The indirect utility function, Roy’s identity and the Slutsky equation
C Measuring the benefits of price changes
D Composite commodities, separability and homotheticity
4 Further models of consumer behaviour
A Revealed preference
B The consumer as a labour supplier
C Consumption and the allocation of time
D Households
5 Production
A Introduction
B The production function
B Variations in scale
C Variations in input proportions
D The multi-product case
6 Cost
A Introduction
B Long-run cost minimization
C Short-run cost minimization
D Cost minimization with several plants
E Multi-product cost functions
7 Supply and firm objectives
A Long-run profit maximization
B Short-run profit maximization
C The multi-product firm
D The profit function and comparative statics
E The entrepreneurial firm
F Labour managed firms
8 The theory of a competitive market
A Short-run equilibrium
B Stability of equilibrium
C Long-run equilibrium
9 Monopoly
A Introduction
B Price and output determination under monopoly
C Price discrimination
D Monopoly welfare loss
10 Input markets
A Demand for inputs
B Monopsony
C Unions as monopoly input suppliers
D Bilateral monopoly
11 Capital markets
A Introduction
B Optimal consumption over time
C The optimal investment decision
D Capital market equilibrium under certainty
E Extensions to many periods
12 General equilibrium
A Introduction
B Walrasian equilibrium of a competitive economy
C Existence of Walrasian equilibrium
D Stability of Walrasian equilibrium
E Edgeworth exchange theory
F Exchange, equilibrium and the core
13 Welfare economics
A Introduction
B Pareto efficient resource allocation
C Welfare functions and the Pareto criterion
D Pareto efficiency and competitive markets
E Distribution and markets
F Arrow’s impossibility theorem
14 Market failure and government failure
A The causes of market failure
B Instances of market failure
C Theory of the second best
D Government failure
15 Game theory
A Introduction
B Game representation and solutions
C Imperfect and incomplete information
D Mixed strategies
E Cooperative bargaining
F Non-cooperative bargaining
G Delay and disagreement in bargaining
16 Oligopoly
17 Choice under uncertainty
A Introduction
B A formalization of ‘uncertainty’
C Choice under uncertainty
D Properties of the utility function
E Risk aversion and indifference curves
F Measures of risk
G Comparative statics under uncertainty
18 Production under uncertainty
A Introduction
B Competitive firm under uncertainty
C Production with futures markets
19 Insurance, risk spreading and risk pooling
A Introduction
B The insurance decision
C Incomplete insurance markets
D Risk spreading: the Arrow-Lind Theorem
E Risk pooling
F Asymmetric information in insurance markets : adverse selection
G Asymmetric information in insurance markets : moral hazard
20 Agency and contract theory
21 General equilibrium under uncertainty and incomplete markets
A Introduction
B Complete markets in state contingent claims
C State contingent commodities
D Efficiency with production
E The stock market
F Incomplete stock markets
Further reading
Mathematical Appendices
A Structure of optimisation problems
B Solutions: questions and concepts
C Existence of solutions
D Local and global optima
E Uniqueness of solutions
F Interior and boundary optima
G Location of the optimum: method of Lagrange
H Concave programming and the KuhnTucker conditions
I Second order conditions and comparative statics
J The envelope theorem
K Fixed point theorems
L Bayes rule
Index