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Who Should Take the Mathematical Economics Course (Econ 315)?

We’re offering Mathematical Economics (Econ 315) in Spring 2011. The course will next be offered in Spring 2013, so if you’re interested, you should take it now!

Who should take this course: This course is essential for students who are considering graduate school in economics or similar fields. It also will be valuable for students who want an introduction to mathematical modeling in economics and those who have an interest in optimization theory. In the past the course has drawn students broadly from the economics, math, and actuarial science programs.

Time: MWF at 12:00-12:50 p.m.

Prerequisites: One semester of calculus (Math 111 or 114) and Econ 303. I can waive the economics requirement for students with a strong math background and a high level of motivation; but I can’t waive the math requirement.

To enjoy this course, you need to feel very comfortable with derivatives and with math in general. The minimal economics preparation would be Econ 103.

If you are a strong math student, but you haven’t taken much economics, please contact me (at carrolwd@uwec.edu) so we can talk about giving you permission to enroll.

Course content: This course will focus primarily on applications of calculus (mostly derivatives) in advanced microeconomic theory.

• Economic content: Similar to that of Intermediate Microeconomic Theory (Econ 303); but results will be derived using calculus rather than just graphs and algebra. With more powerful mathematical tools at hand, we can go deeper and further than the Econ 303 course. For example, the course will include the derivation of demand curves from maximization of consumer utility; the derivation of the supply curve, the labor demand curve, and the expansion path (showing the firm’s labor/capital mix) for a profit-maximizing firm; and the derivation of many mathematical results that should be in every economist’s tool kit.

• Math content: Extensive use of derivatives, plus an introduction to partial derivatives, differentials, and matrix algebra concepts, with many applications in economic models.

Text: Mathematical Methods for Economics by Michael Klein (2nd edition). We’ll probably cover the following chapters:

• Chapter 1: The Mathematical Framework of Economic Analysis (covered quickly)

• Chapter 2: An Introduction to Functions (very quickly)

• Chapter 3: Exponential and Logarithmic Functions (quick review of the math, and then a deeper look at economic applications, including growth rates and present value)

• Chapter 4: Systems of Equations and Matrix Algebra (introduction to matrix algebra concepts, and then applications to linear supply and demand models, linear macro models, input-output models, etc.)

• Chapter 6: An Introduction to Differential Calculus (very quick review of derivatives and introduction to the concept of a differential)

• Chapter 7: Univariate Calculus (very quick review of rules of differentiation, and then lots of applications to economic models, including models of risk aversion and choice under uncertainty)

• Chapter 8: Multivariate Calculus (partial derivatives, the chain rule in the multivariate case, and then lots of economic applications)

• Chapter 9: Extreme Values of Univariate Functions (models of profit maximization for competitive and monopolistic firms)

• Chapter 10: Extreme Values of Multivariate Functions (price discrimination, the firm’s choice of inputs, and many other applications)

• Chapter 11: Constrained Optimization (the method of Lagrange multipliers, the envelope theorem, the rational consumer choice model, and many other applications)

Instructional style: Like many math classes, the course will rely heavily on lectures and class discussions, and there will be lots of homework assignments involving applications of the concepts and tools presented in class. Students will be encouraged to work together on homework assignments.

Questions?: Contact me at carrolwd@uwec.edu if you have any questions or would like to know more about this course.

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