This is a course in general equilibrium.
The first part of the course deals with welfare theory and (1) gives an introduction to general equilibrium with the aim of understanding the interaction between different markets in the economy; (2) continues to give the basic features of the welfare theory by emphasizing the Pareto criterium and the two main theorem in the welfare theory; and (3) shows the importance of competition and how to intervene in markets to obtain optimal allocation of resources when there are imperfect competition, externalities and public goods.
The second part of the course deals with theory of international trade and focuses on industry structure and factor reward in a small, open economy. There is a particular emphasis on the Heckscher-Ohlin model, but also other models are used to show the pattern of trade, the gains from trade, and the effects of trade policy and other economic policy.
The course focuses on current problems and shows how the theories can explain current and empirical observations.