Advanced Microeconomic Theory- An Intuitive Approach With Examples -mit Press-.pdf -

Felix Muñoz-Garcia’s "Advanced Microeconomic Theory: An Intuitive Approach with Examples" (MIT Press) guides students from foundational individual choice models to complex game theory and market mechanisms. The text emphasizes bridging mathematical rigor with intuition, covering topics from consumer behavior to contract theory and externalities. For more details, visit Felix Munoz-Garcia's Books page EconS 501, Advanced Microeconomic Theory I

1. Production Functions

• Concepts: Marginal Product ($MP_L, MP_K$) and Returns to Scale.
• Visualizing: Isoquants (the firm's version of indifference curves).
• MRTS: Marginal Rate of Technical Substitution.

How to study each chapter

1. Skim the chapter to identify definitions, theorems, and main examples.
2. Read carefully the intuitive discussion before diving into proofs.
3. Work through at least 3–5 representative exercises, including at least one proof and one applied/example computation.
4. Summarize key results in one page (definitions, main lemmas/theorems, assumptions, examples).
5. Formulate 1–2 questions or extensions to explore further (e.g., relax an assumption, change functional form).

• Intuition: Decomposing a price change into the Substitution Effect (movement along IC) and the Income Effect (shift of IC).
• Guide: The book provides excellent numerical examples here. Work through them until you can distinguish between normal, inferior, and Giffen goods mathematically.

One-line summary: Finally, an advanced micro text that explains what the equations actually mean. Concepts: Marginal Product ($MP_L, MP_K$) and Returns to

Advanced Microeconomic Theory: An Intuitive Approach with Examples How to study each chapter

Pedagogical Approach

• Intuition-First Presentation: Key results motivated by economic reasoning and graphical examples before formal proofs.
• Worked Examples: Numerical problems illustrating derivations, comparative statics, equilibrium computation, and policy counterfactuals.
• Minimal but Rigorous Math: Uses calculus and linear algebra where needed, but emphasizes interpretation of first-order conditions, second-order conditions, and envelope theorems.
• Application Focus: Each theoretical construct is tied to empirical or policy-relevant examples (labor supply, taxation incidence, auctions, regulation).

d. Asymmetric information chapters are a standout

Many advanced micro books rush through signaling and screening. Muñoz-Garcia provides: Subgame perfect equilibrium

• Subgame perfect equilibrium, backward induction, repeated games basics.