API 109 Advanced Microeconomic Analysis I Fall 2010 Faculty Chris Avery chris avery harvard edu KSG L208 617 496 4063 Teaching Fellow Tara Grillos Meetings Monday and Wednesday 11 40 am 1 pm L 140 Kennedy School doctoral student Course Description API 109 is the first semester of the two semester sequence in advanced microeconomic analysis for MPA ID students The goal of the course is to prepare students to use microeconomic theory to analyze applied problems in international development The course is not however a course in the economics of development or a purely theoretical course in microeconomics Rather it is a doctoral level course in microeconomic theory with an eye towards policy applications in the area of development The course is intended for MPA ID students and is closed to all others In addition to two weekly lectures there will be a weekly section meeting conducted by the Teaching Fellow and small group sessions with the professor scheduled so that each student can participate once every two weeks A number of course assistants will hold weekly office hours to help with the homework and other basic questions For advanced questions students are encouraged to consult either the Teaching Fellow or the professor Prerequisites The main prerequisite for the course is an understanding of multivariate calculus on the level of a typical undergraduate course such as Math 21a in the Faculty of Arts and Sciences In addition students may find it useful to have familiarity with linear algebra probability theory and mathematical optimization However as far as technical preparation the most important prerequisite is a certain level of mathematical sophistication i e comfort in dealing with mathematical constructs and logic In addition a good understanding of intermediate microeconomics on the level of Varian s Intermediate Microeconomics will be helpful though it is by no means necessary Requirements and Evaluation The distribution of course grades will correspond roughly with the Kennedy School s recommended grade distribution Grades for the course will be based on the following requirements and weights Problem Sets 10 Participation 5 Midterm Exam 35 Final Exam 50 1 Class Structure For Fall 2010 the entering MPA ID class is expected to include 65 students To facilitate classroom interactions the last 20 minutes of each lecture will be reserved for a discussion of an applied paper in development that utilizes the theoretical concepts discussed in the first hour of that lecture Recommended Problems and Problem Sets A full set of practice problems and solutions will be provided on the course website Typically there are about four problems per lecture designed to highlight the key technical skills and concepts associated with each lecture It is strongly recommended that students devote time to working through these problems and solutions rather then trying to build a comprehensive understanding of the material in the textbook There will be eight problem sets assigned over the course of the semester The problem sets are intended to provide practice and feedback to students In general each problem set will consist of two problems from the full set of practice problems They will be posted on the course website and will be due at the start of class on Mondays Problem sets not received before the deadline will be considered late There will be no credit for late assignments without prior approval from the Teaching Fellow Under the Kennedy School Academic Code the problem sets for this course are Type 2D assignments http www hks harvard edu var ezp site storage fckeditor file pdfs degreeprograms registrar academic code pdf Students may work on problem sets in study groups but each student should write up and hand in their own solutions Photocopies or multiple printouts of essentially the same computer file are not acceptable Experience has shown that much of the learning in this class takes place during group interactions so students should make sure that they are contributing to their group s efforts and that they understand all solutions to all problems Problem sets will be given grades from 0 to 3 and honest effort at all of the questions should earn at least a 2 Course Materials There will be required readings from two textbooks for this course 1 Microeconomic Theory by Mas Colell Whinston and Green Oxford Press 1995 2 Development Microeconomics by Bardhan and Udry Oxford Press 1999 MWG is the standard microeconomic theory text used in Economics Ph D programs and is accepted as providing the language of economists However it is quite encyclopedic and oriented to mathematical generality sometimes at the expense of economic intuition For this reason Nolan Miller who taught the course for many years produced a supplemental set of lecture notes These notes will be available through the course website MWG is the primary text for both API 109 and API 110 Readings from Bardhan and Udry will be less frequent so some students may decide to read this book in the library or to share a copy with a small group of others 2 To keep the cost of materials for the course as low as possible handouts will be posted online rather than distributed in hard copy and almost all applied readings will be available online for free through the Harvard Library system Some alternative texts include Jehle and Reny Advanced Microeconomics AddisonWesley 2000 Kreps A Course in Microeconomic Theory Princeton University Press 1990 Silberberg and Suen The Structure of Microeconomic Analysis McGraw Hill 2000 Varian Microeconomic Analysis W W Norton 1984 These texts provide other approaches to essentially the same material The Kreps and Varian texts books were the standard graduate level texts before the publication of MWG many students consulted both books since Kreps is relatively chatty while Varian is terse but straightforward Jehle and Reny is a new text that is similar to Varian but with more explanation Silberberg and Suen does the most hand holding of any of these texts walking the reader through the mechanics of microeconomic analysis There is an important distinction between two relevant books by Varian Intermediate Microeconomics is a relatively advanced intermediate textbook that provides simpler treatment of many of the topics that we will study Microeconomic Analysis is a doctoral level text at the appropriate level for API 109 Students may find each of these texts useful for different purposes Students looking