Recommended Course Outline 

I use this course outline for my second-year undergraduate-level intermediate microeconomic theory classes. It includes an ordered list of topics and lecture videos. It's essential to watch the videos in the proper order because each concept builds on the ones introduced in previous videos. This will help ensure effective learning.

Course Description and Objective

This is the second course in the sequel of intermediate microeconomics courses for second-year ECON students. This course analyzes resource allocation in imperfectly competitive markets and factor pricing in alternative market structures. The course also introduces students to concepts and applications of game theory and considers basic concepts of general equilibrium and externalities. At the end of the course, students are expected to

• gain a comprehensive understanding of microeconomic models and how predictions change when assumptions are altered,

• learn how to apply the basic tools of game theory in various settings,

• develop the ability to identify and solve constrained optimization problems,

• demonstrate proficiency in using calculus-based techniques to evaluate microeconomic problems. 

• develop the ability to explain the fundamental economic intuition associated with the standard models in non-technical terms.

Suggested Textbooks

1. Hal R. Varian, Intermediate Microeconomics with Calculus, W.W. Norton & Company

2. Theodore C. Bergstrom and Hal R. Varian, Workouts in Intermediate Microeconomics, W.W. Norton & Company.

Course Outline

CHAPTER 1: MONOPOLY (Chapter 25 of Varian)

1. Monopoly, Five Important Questions.

2. Assumptions of the Standard Monopoly Model.

3. Profit Maximization Problem of the Monopolist.

4. Lessons to Learn from Monopoly Profit Maximization Problem.

5. Inefficiency of Monopoly and Dead-Weight Loss.

6. A Numerical Example for Monopoly.

CHAPTER 2: MONOPOLY BEHAVIOR (Chapter 26 of Varian)

1. Introduction to Monopoly Behavior, Basic Concepts.

2. First-Degree Price Discrimination.

3. Third-Degree Price Discrimination.

4. Third-Degree Price Discrimination with Linear Demands.

5. Surplus and Deadweight Loss under Third-Degree Price Discrimination.

6. Calculating the aggregate demand curve.

7. Second-Degree Price Discrimination.

CHAPTER 3: FACTOR MARKETS (Chapter 27 of Varian)

1. Factor (Input) Markets.

2. Perfectly Competitive Input and Output Markets (The Benchmark Case).

3. Perfectly Competitive Input Market and Monopoly Output Market.

4. The Case of Monopsony (Single Buyer).

5. Example: Monopsony in Input Market and Competitive in Output Market.

6. Example: Monopoly in Output Market and Competitive in Input Market.

CHAPTER 4: OLIGOPOLY (Chapter 28 of Varian)

1. Duopoly Models. The Case of Two Competing Firms.

2. Cournot Duopoly Model (The Basics).

3. Cournot Duopoly, Calculating Reaction Functions and Quantities.

4. Cournot- Nash Solution. Why Intersection of Reaction Functions Matters.

5. Stackelberg Duopoly and How to Solve it.

6. Bertrand Duopoly, Profits, and Prices; An Example.

7. Collusion in Cournot Model, Monopoly Profit, and Incentive to Deviate.

CHAPTER 5: GAME THEORY & APPLICATIONS (Chapters 29 and 30 of Varian)

1. Prisoners' Dilemma; Mathematical Representation of Games.

2. Dominant Strategy Equilibrium; Examples.

3. Nash Equilibrium; Examples.

4. Mixed Strategy Nash Equilibrium; Introduction.

5. Solving for Mixed Nash Equilibrium; Calculating Expected Payoffs.

6. Calculating Best Response Functions and Mixed Strategy Nash Equilibrium.

7. Infinitely Many Mixed Strategy Nash Equilibria; An Example.

8. Finding Pure and Mixed Nash Equilibria: An Example.

9. Sequential Games and Backward Induction Solution.

10. Centipede Game and Role of Commitment. An example of Sequential Games.

CHAPTER 6: EXCHANGE (Chapter 32 of Varian)

1. General Equilibrium-Exchange, Introduction.

2. A Quick Review on Consumer Theory.

3. Edgeworth Box.

4. Mutual Gain From Trade-General Equilibrium.

5. Pareto Efficiency - General Equilibrium.

6. Pareto Efficiency - Simple Examples.

7. Pareto Set and Contract Curve - General Equilibrium.

8. How to Calculate the Pareto Set and the Contract Curve.

9. Trade in Pure Exchange Economy and Calculating Trade Outcomes.

10. Walrasian Equilibrium - Calculating General Equilibrium Prices.

11. Finding Walrasian Equilibrium Prices, A Numerical Example.

12. First and Second Theorem of Welfare Economics and How to Verify.

CHAPTER 7: PRODUCTION (Chapter 33 of Varian)

1. General Equilibrium with Production - Production Possibility Frontier.

2. Solving General Equilibrium Price Ratio - The Case with PPF.

3. General Equilibrium with Production—Labor as the Only Input.

4. General Equilibrium with Production - Two Consumers and Labor as Input.

5. General Equilibrium with Production - Two Consumers and Endowments.

CHAPTER 8: WELFARE (Chapter 34 of Varian)

1. Introduction to Welfare. Equity and Fair Allocations.

2. Finding Fair Allocations in Exchange Economy.

3. Finding all Fair Allocations in an Exchange Economy - Numerical Example.

4. Preference Aggregation, Voting Rules, and Condorcet Voting.

5. Condorcet Paradox.

6. Borda Count Voting Rule and Independence of Irrelevant Alternatives.

7. Arrow's Impossibility Theorem - Democracy Fails to Aggregate Preferences.

8. Social Welfare Functions - Aggregating Cardinal Preferences.

9. Utilitarian, Rawlsian, and Weighted-Sum-of-Utilities Welfare Functions.

CHAPTER 9: EXTERNALITIES (Chapter 35 of Varian)

1. Key Concepts on Externalities.

2. Inefficiency of Externalities, Property Rights, and Roommate Problem.

3. Internalizing Externality and Efficiency.

4. The Pigouvian Tax; a Numerical Example.

5. The Pigouvian Subsidy; A Numerical Example.

6. The Tragedy of Commons.

CHAPTER 10: PUBLIC GOODS (Chapter 37 of Varian)

1. Public Goods - Key Concepts.

2. Public Goods - The Main Model.

3. Calculating the Reservation Prices.

4. How to Determine Efficiency or Inefficiency of Public Goods.

5. A Numerical Example for Public Goods.

6. Public Good Provision Game - An Example.

7. Nash Equilibria of the Public Good Provision Game - An Example

CHAPTER 11: ASYMMETRIC INFORMATION (Chapter 38 of Varian)

1. Introduction to Asymmetric Information - Key Concepts.

2. Used Cars or the Lemons Problem With Two Types - Key Concepts.

3. Solving the Used Cars or the Lemons Problem With Two Types.

4. Solving the Used Cars or the Lemons Problem with Three Types.

5. Introduction to Spence's Job Market Signaling Model - Key Concepts.

6. Solving for the Separating Equilibrium of the Spence's Job Market Signaling Model.

7. Solving for the Pooling Equilibria of the Spence's Job Market Signaling Model.

8. Equilibria of the Spence's Job Market Signaling Model With Low Cost of Education.