Microeconomic Theory

§This text presents a rigorous and reasonably complete statement of microeconomic theory as it exists today. It starts with a unified treatment of consumers' demand, followed by an exposition of the theory of production as well as costs and profit functions of competitive firms. Market structures are then studied in detail and, finally, a brief introduction to general equilibrium and welfare economics is presented. The book contains many examples, exercises, and illustrations. The method of exposition unifies several approaches to the subject. The treatment of market structure is unique and more detailed than any book on microeconomic theory. Several parts of the book reflect the original research of the authors that has not appeared in book form before. The text attempts to give rigorous foundations to the material presented in intermediate microeconomics textbooks. Contrary to widely held beliefs, microeconomic theory bears no rela tion to the size of the product under consideration; indeed a micro theorist can just as easily discuss the sale of a whale as he would discuss a whale of a sale in amoebae. In fact, it possibly is true that a theorist, and a microeconomic theorist in particular, does not have any specific products in mind when he bandies his propositions about. Nor does he have to. For these in the final analysis are just that; propositions. They are propositions that are motivated by economic reality as observable, not to mention controllable, as that may be, but they are no more and no less than comments about that economic reality and they emphatically are not descriptive assays of it. They are more or less, caricatures of economic reality or metaphors where bold distortions are pressed to the task of describing preconceived visions of that reality. These visions, given their fundamentally qualitative nature, are hardly fit to be put to the test of statistical verification. Perhaps only the judgement and "intuitive feel" of practicing economists over the years are the only true tests of the viability and robustness of these propositional comments on economic reality which make up the body of economic theory. It is not the abstractions that make the difference, all science is that way; metaphoric.