8. Financial Markets a. Insurance Markets b. Moral Hazard C. Adverse Selection with one price contracts d. Simple Financial Markets-Comparative Statics e. Option Pricing and Redundant Assets
6. Choice Under Uncertainty a. Representing Uncertainty: Lotteries and Compound Lotteries b. Axioms of Expected Utility C. The Expected Utility Theory d. Empirical Challenges to Expected Utility Theory-the Paradox Business e. Application: Crime and punishment
4. Welfare Analysis and Other Issues a. Measuring Welfare b. First Order and Second Order Losses C. Taxes and Welfare d. Household Production (did last class) e. The Hedonic Approach
3. Comparative Statics a. Indirect Utility Functions b. Expenditure Functions and duality C. Expenditure Function and Price Indices d. Slutsky via Utility Functions e. Slutsky via Preferences
2. Choice and Utility Functions a. Choice in Consumer Demand Theory and Walrasian Demand b. Properties of demand from continuity and properties from WARP . Representing Preferences with a Utility Function d. Demand as Derived from Utility Maximization e. Application: Fertility
10. More on Production a. Derived Demand-Marshall's Laws b. Long Run/Short Run, LeChatelier, Dynamics C. Aggregating Supply d. Theory of the Firm, the Holdup Problem e. Agency Issues f. Application: The Coase Theorem
5. Oligopoly Oligopoly: Small number of firms: Firms depend on each other. Identical products: Firms jointly face a downward sloping industry demand No entry: Long-run positive profits are possible
