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Updated A.Y. 2022-2023

Learning outcomes

Students will learn about the theory of consumption, production in competitive markets, partial equilibrium, general equilibrium, and efficiency. Specifically, students will be able to analyze the determinants of demand and supply functions in two commodity models, to compute and analyze equilibria in simple partial and general equilibrium settings.

Course contents

List of topics (for Part I):


Budget constraint (chapter 2)

• The Budget Constraint

• Two Goods are Often Enough

• Properties of the Budget Set

• How the Budget Line Changes

• The Numeraire

• Taxes, Subsidies, and Rationing


Preferences (chapter 3)

• Consumer Preferences

• Assumption about Preferences

• Indifference Curves

• Examples of Preferences:

o Perfect Substitutes, Perfect Complements, Bads, Neutral, Satiation, Discrete Goods

• Well Behaved-Preferences

• The Marginal Rate of Substitution

• Other Interpretation of the Marginal Rate of Substitution

• Behavior of the Marginal Rate of Substitution


Utility (chapter 4)

• Cardinal Utility

• Construction a Utility Function

• Some Examples of Utility Functions:

o Perfect Substitutes

o Perfect Complements

o Quasilinear Preferences

o Cobb-Douglas Preferences

• Marginal Utility

• Marginal Utility and Marginal Rate of Substitution


Choice (chapter 5)

• Optimal Choice

• Consumer Demand

• Some Examples:

o Perfect Substitutes

o Perfect Complements

o Neutrals and Bads

o Discrete Goods

o Concave Preferences

o Codd-Douglas Preferences

• Implications of the MRS Condition

• Choosing Taxes


Demand (chapter 6)

• Normal and Inferior Goods

• Income Offer Curves and Engel Curves

• Some Examples:

o Perfect Substitutes

o Perfcet Complements

o Cobb-Douglas Preferences

o Homothetic Preferences

o Quasilinear Preferences

• Ordinary Goods and Giffen Goods

• Price Offer Curve and Demand Curve

• Some examples:

o Perfect Substitutes

o Perfect Complements

o Discrete Good

• Substitutes and Complements

• The Inverse Demand Function

• Appendix (on Quasilinear Preferences)


Slutsky Equation (chapter 8)

• The Substitution Effect

• The Income Effect

• Sign of the Substitution Effect

• The Total Change in Demand

• Rates of Change

• The Law of Demand

• Examples of Income and Substitution Effects


Buying and Selling (chapter 9)

• Net and Gross Demands

• The Budget Constraint

• Changing the Endowment

• Price Changes

• Offer Curves and Demand Curves

• The Slutsky Equation Revisited

• Use of the Slutsky Equation

• Labor Supply

• Comparative Statics of the Labor Supply


Intertemporal Choice (chapter 10)

• The Budget Constraint

• Preferences and Consumption

• Comparative Statistics

• The Slutsky Equation and Intertemporal Choice

• Inflation

• Present Value: A Closer Look

• Analyzing Present Value for Several Periods


Uncertainty (chapter 12)

• Contingent Consumption

• Utility Functions and Probabilities

• Expected Utility

• Why Expected Utility is Reasonable

• Risk Aversion


The textbook for the course will be:

Varian, Hal R., Intermediate Microeconomics: A Modern Approach, (9th international student edition), published by WW Norton & Co.


There is also an accompanying exercise book which students may find helpful (though it is not required reading). This exercise book is:

Bergstrom, Theodore C., and Hal R. Varian, Workouts in Intermediate Microeconomics for Intermediate Microeconomics and Intermediate Microeconomics with Calculus, 2014, W.W. Norton & Co.: New York, London


Copies of teaching materials (slides, exercises) will be published on the course website.

Teaching methods

The course lecturer leads traditional lectures. A tutor will lead the tutorial sessions.

Assessment methods

Final written exam of about one and a half or two hours.

Mid-term exam(s)/tests will be offered.

Students pass if they achieve at least 18/30 in the mid-term exams. The final grade is the average across mid-terms.


During exams (mid-term or full exams), students will NOT be allowed to use materials such as:

  • Textbooks, lecture notes/slides.
  • Any written notes.
  • Web-enabled or data storage devices such as computers (laptops or tablets) or smartphones.

Candidates with such items will be removed from the exam, and their work will not be marked.


The exams will contain multiple choice (and possibly "fill in the blanks") questions and computational/open exercises. 


Candidates should enroll for exams. 

Teaching tools


Example exercises

Students with a disability or specific learning disabilities (DSA) are encouraged to make their condition known so that the best possible accommodation to their needs may be found.

Office hours

During the teaching period, there will be weekly office hours (day of the week and time to be agreed upon with students). Outside of the teaching period, please send an email to fix an appointment.