Microeconomics

Microeconomics: A Modern Treatment focuses on modern approaches to microeconomics. Alternative systems are discussed including input-output analysis as against neoclassical production theory. The theory of choice and the preference and utility approaches to consumer theory are also considered, along with linear and nonlinear theories of production, the theory of market demand and supply, and welfare economics.

Comprised of 11 chapters, this book begins with an introduction to economic science and its propositions, as well as the importance of establishing a clearly defined set of postulates on which the whole edifice of economic knowledge rests. The discussion then turns to the theory of choice and the preference and utility approaches to consumer theory; neoclassical as opposed to modern consumer choice; production theory and the production set of the economy; and the theory of market demand and supply. Subsequent chapters deal with the theory of exchange and general equilibrium; welfare economics; and stability and introductory dynamics.

This monograph will be of value to economists and those interested in microeconomics.

Preface

Acknowledgements

Notation

Part I Methodology

Chapter 1 Economic Science

1.1 Introduction

1.2 Classifying Economic Propositions

1.3 Introduction of a γ-class

1.4 Refutation and Verification

1.5 Axiomatics and Model Building

1.6 A Summing Up

Part II Consumer Theory

Chapter 2 The Theory of Choice

2.1 The Problem Stated

2.2 The Choice Set and Attainable Set

2.3 Relations and Orderings

2.4 The Relations P, R and I

2.5 The Axioms of Choice Theory

2.6 Continuity of Preferences

2.7 'The' General Economic Problem

2.8 Some Unsettled Questions

Appendix 2A Choice Under Uncertainty

Appendix 2B Social Choice

Chapter 3 Preference and Utility Approaches to Consumer Theory

3.1 Introduction

3.2 The Consumption Choice Set

3.3 Important Properties of Rn and En

3.4 A New Look at Elementary Indifference Curves

3.5 Convex Sets, Convex/Concave and Quasiconvex/Quasiconcave Functions

3.6 The Axiom of Convexity

3.7 The Utility Function

3.8 Some Deductions from Neoclassical UtiUty Theory

3.9 Separability of the Utility Function and Some Extensions

3.10 Revealed Preference Theory

Chapter 4 Neoclassical and Modern Consumer Choice Compared

4.1 Neoclassical Optimisation

4.2 Restrictions on the Demand Equations

4.3 Compensated Demand Curves

4.4 Groups of Commodities

4.5 Prices in the UtiUty Function

4.6 The Kuhn-Tucker Conditions for an Optimal Solution

4.7 Neoclassical Optimisation Reconsidered

4.8 A New Look at Consumer Optimality

4.9 The GeneraUsed Substitution Theorem

4.10 Revealed Preference Theory Revisited

Appendix 4A The Kuhn-Tucker Theorems

Part III Production Theory

Chapter 5 The Theory of Production

5.1 Introduction

5.2 Axioms of Production

5.3 Convex Cones

5.4 The Production Set of the Economy

5.5 Profit Maximisation

5.6 Continuity and Semi-continuity of Functions and Correspondences

Chapter 6 Linear Theories of Production

6.1 Introduction

6.2 Ricardian Model

6.3 Input-Output Model

6.4 Decomposability and Perron-Frobenius Theorem

6.5 Activity Analysis

6.6 Conclusion

Chapter 7 Non-Linear Production Theory

7.1 Introduction

7.2 The Production Function

7.3 Homogeneous and Homothetic Production Functions

7.4 Equilibrium of the Firm

7.5 Comparative Statics of the Firm

7.6 A Critique of Traditional Production Theory

Part IV General Equiubrium Theory

Chapter 8 Theory of Market Demand and Supply

8.1 Introduction

8.2 Derivation of Individual Demand Curves

8.3 Derivation of Individual Supply Curves

8.4 Market Demand

8.5 A First Introduction to Equilibrium

8.6 Normalised Price Set

8.7 The Mathematics of EquiUbrium Points

Chapter 9 Theory of Exchange and General Equilibrium

9.1 Introduction

9.2 Axioms of Exchange

9.3 Pure Exchange Model — Neoclassical Version

9.4 Existence of EquiUbrium in a General Exchange Model

9.5 Existence of EquiUbrium in an Open Leontief Model

Chapter 10 Welfare Economics

10.1 Introduction

10.2 Pareto Optimality

10.3 The Social Welfare Function

10.4 Interdependent Utilities

10.5 PubUc Goods

10.6 Theory of Second Best

10.7 The Core of an Economy

Part V Introduction to Dynamics

Chapter 11 Stability and Introductory Dynamics

11.1 Introduction

11.2 Static Stability

11.3 Dynamics

11.4 Stability in an Open Leontief Model

11.5 Conclusion

Notes

Bibliography

Author Index

Subject Index