Chapter 1. Introduction 1
1-1. The Role of Theory 1
1-2. Microeconomics 2
1-3. The Role of Mathematics 4
Chapter 2. The Theory of Consumer Behavior 6
2-1. Basic Concepts 8
2-2. The Maximization of Utility 12
2-3. The Choice of a Utility Index 16
2-4. Demand Curves 20
2-5. Income and Leisure 23
2-6. Substitution and Income Effects 24
2-7. Generalization to n Variables 30
2-8. The Theory of Revealed Prefcrence 32
2-9. The Problem of Choice in Situations Involving Risk 34
2-10. Summary 38
Chapter 3. The Theory of the Firm 42
3-1. Basic Concepts 43
3-2. Optimizing Behavior 49
3-3. Cost Functions 55
3-4. Homogeneous Production Functions 62
3-5. Joint Products 67
3-6. Generalization to m Variables 72
3-7. Linear Programming 75
3-8. Summary 82
Chapter 4. Market Equilibrium 85
4-1. The Assumptions of Perfect Competition 86
4-2. Demand Functions 87
4-3. The Derivation of Supply Functions 89
4-4. The Equilibrium of a Commodity Market 95
4-5. Applications of the Analysis 101
4-6. Factor-market Equilibrium 107
4-7. The Stability of Equilibrium 109
4-8. Dynamic Equilibrium with Lagged Adjustment 117
4-9. Summary 123
Chapter 5. Multimarket Equilibrium 126
5-1. Pure Exchange 128
5-2. Production and Exchange 134
5-3. The Numeraire, Money, and Say's Law 140
5-4. Multimarket Stability 146
5-5. Solutions 153
5-6. The Input-Output System 157
5-7. Summary 161
Chapter 6. Monopolistic Competition 164
6-1. Monopoly 166
6-2. Duopoly and Oligopoly 175
6-3. Product Differentiation: Many Sellers 192
6-4. Monopsony 195
6-5. Summary 198
Chapter 7. Welfare Economics 201
7-1. The Efficiency of Perfect Competition 202
7-2. The Efficiency of Monopolistic Competition 208
7-3. External Effects in Consumption and Production 212
7-4. Social Welfare Functions 217
7-5. Summary 222
Chapter 8. Optimization Over Time 225
8-1. Basic Concepts 226
8-2. Multiperiod Consumption 229
8-3. Time Preference 234
8-4. Multiperiod Production 240
8-5. Investment Theory of the Firm 243
8-6. Interest-rate Determination 250
8-7. Summary 251
Appendix: A Note on the Length of the Investment Period 253
Appendix. Mathematical Review 257
A-1. Simultaneous Equations and Determinants 257
A-2. Calculus: Functions of a Single Variable 262
A-3. Calculus: Functions of Many Variables 268
A-4. Integrals 277
A-5. Difference Equations 279
Index 285