Lecture 1

Keynes observed that the master economist “must understand symbols and speak in words.” Explicit mathematical models organize our thoughts, clarify our reasoning, and allow the application of powerful mathematical tools. A formal model also reveals assumptions, permits verification of the logical deductions, and allows application by others. Econ 58 is intended to use examples from many areas of economics to accomplish several overlapping objectives:

1. Develop the ability to formulate models that are reasonably realistic and yet tractable.
2. Develop the ability to analyze mathematical models of economic behavior.
3. Develop problem-solving skills in general.
4. Become comfortable using mathematical tools to deduce the logical implications of economic models.
5. Prepare for upper-division economics courses in which mathematical techniques are applied to a wide variety of models.

Topics:

1. Using Mathematical Models to Represent Reality
2. One-Variable Calculus
3. Optimization With One Choice Variable
4. Partial Derivatives and Total Derivatives
5. Optimization With More Than One Choice Variable
6. Constrained Optimization
7. Comparative Statics
8. Dynamic Models
9. Contingency Tables
10. Game Theory
11. Linear Models and Matrix Algebra
12. Monte Carlo Models

There is no suitable textbook for this course, in that existing textbooks don't match my topics closely and are more conerned with math and less concerned with modeling. If you would like to purchase a helpful book, consider the book used by the other section of Econ 58: Alpha C. Chiang, Fundamental Methods of Mathematical Economics , 4th Edition, McGraw-Hill.

This course must be taken for a letter grade. Course grades will be based on the following:

20% weekly homework exercises You may discuss the general concepts with others; but the specific work must be your own. Your answers must be completely legible—either typed or written cleanly and clearly—and are due at the beginning of class.

20% challenging exercises Three challenging problems assigned during the course of the semester. You will work on 3 different 3-person teams randomly chosen by me. Each project will receive separate grades for the analysis and the written report. All 3 team members should work on each project and all will be graded on the analysis; slackers will have their grades adjusted accordingly. One team member will prepare the written report and will be graded on whether the writing is clear, persuasive, and grammatically correct. Each person in the class will write one report during the semester and consequently accumulate 4 separate challenge-problem grades during the semester, each worth 5% of the course grade: 3 team grades on analysis and 1 individual grade on a written report.

20% midterm examination The first test will be in class on Wednesday, October 11. This will be a closed-book, no-calculator test emphasizing concepts, understanding, and applications.

40% final examination The final examination, 2 1/2 hours long and covering all of the course material, will be at 2:00 p.m. on Wednesday, December 13. This will be a closed-book, no-calculator test emphasizing concepts, understanding, and applications.

• Fall 2004 midterm
• Fall 2004 midterm answers
• Fall 2004 final exam
• Fall 2004 final exam answers
• Spring 2005 midterm
• Spring 2005 midterm answers
• Spring 2005 final exam
• Spring 2005 final exam answers
• Fall 2005 midterm
• Fall 2005 midterm answers
• Fall 2005 final exam
• Fall 2005 final exam answers
• Spring 2006 midterm
• Spring 2006 midterm answers
• Spring 2006 final exam
• Spring 2006 final exam answers
• Fall 2006 midterm
• Fall 2006 midterm answers
• Fall 2006 final exam
• Fall 2006 final exam answers