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Regular version of the site
Bachelor 2018/2019

Microeconomics 1

Area of studies: Economics
When: 2 year, 1-4 module
Mode of studies: Blended
Language: English
ECTS credits: 5

Course Syllabus

Abstract

Microeconomics-1 is a two-semester course for second year students. The first part covers all topics of the syllabus and the second part is devoted to supporting lectures. In the course of Microeconomics-1 students are expected to deepen their understanding of basic concepts, add further tools of analysis and develop their skills in applying theory to economic problems. The course pays special attention to problems of uncertainty, inter-temporal choice, general equilibrium and efficiency, asymmetric information and public choice. Intermediate Microeconomics is a core discipline under world standards. It forms the basis of further economic studies in applied disciplines such as: industrial organisation, public sector economics, labour economics, international economics, corporate finance, development economics, etc. The course is taught in English. The students are also studying for Russian degree in Economics, and knowing Russian terminology through reading in Russian is also required. Pre-requisites: Students are supposed to be competent in basic economic analysis(APTlevel) and Calculus. The course itself provides a basis (and so serves as a prerequisite) for Microeconomics2
Learning Objectives

Learning Objectives

  • to expand the students’ knowledge in the field of microeconomics and and develop skills for analysis of real economic situations
  • to provide students with the knowledge of basic microeconomic models' assumptions, internal logic and predictions, grounding the explanations on intuitive and graphical approach with addition of some algebra and calculus studied simultaneously in the course of Mathematics for Economists;
  • to develop the students' ability to apply the knowledge acquired to the analysis of specific economic cases, recognising the proper framework of analysis and constructing the adequate economic models within this framework.
Expected Learning Outcomes

Expected Learning Outcomes

  • Be able to use basic concepts, such as opportunity cost
  • Be able to analyse the consumer’s problem
  • Explain income and substitution effects.
  • Be able to analyze the firm’s profit maximization problem in the short-run and the long-run, including cost-minimization
  • Assess the effects of taxes and subsidies
  • Outline market behaviour under perfect competition
  • Analyse efficiency, including economic surplus
  • Explain the monopolist’s problem, and how it differs from perfect competition
  • Analyse equilibrium, efficiency, and policy in a monopolistic market
  • Describe monopolistic competitive and oligopolistic markets.
  • Analyse simple games, and determine their Nash equilibria.
  • Explain the difference between input and output markets
  • Analyse perfectly competitive labour markets and monopsonistic labour markets
  • List the issues with analysing multiple markets simultaneously
  • Solve for general equilibrium under the assumptions of perfect competition
  • Explain the First and Second Welfare Theorems.
  • Explain how externalities and public goods create inefficiencies
  • Analyse government interventions to correct inefficiencies
Course Contents

Course Contents

  • Economics, the economy and tools of economic analysis
    Brief review of basic concepts familiar from year 1: Scarcity. Rationality. The production possibility frontier and opportunity cost. Absolute and comparative advantage. Markets. Microeconomics vs. macroeconomics. Models and theory. Models and theory
  • Consumer choice
    Preferences, indifference curves and utility function. Utility maximisation and choice. Consumer choice and demand. Comparative statics: income and price changes. Substitution and income effects. The individual demand and elasticity. Complements and substitutes. Cash transfers versus transfers in kind. Inverse demand curve and consumer’s surplus
  • The firm
    Firm’s objective. Production function. Cost minimization: isoquants and isocost lines. Costs in the short run and in the long run. Firm’s decision in the short run. Firm’s decision in the long run
  • Perfect competition
    Industry supply in the short-run. Market demand. Equilibrium in the short run. Entry and exit, short-run and long-run equilibrium. Comparative statics. Equilibrium and Efficiency.
  • Monopoly
    Pure monopoly. Natural monopoly. Social cost of monopoly. Regulation of natural monopoly.
  • Market structure and imperfect competition
    Monopolistic competition. Basic concepts of the game theory. Oligopoly: Cournot duopoly, Bertrand model, Stackelberg model. Strategic entry deterrence.
  • Inputs to production: the labour market
    Utility maximisation and the supply of labour. Profit maximisation and the demand for labour. Economic rent. Monopsony. Factors affecting labour market equilibrium (unions, minimum wages and others).
  • General equilibrium and welfare economics
    Exchange economy and Edgeworth box. General equilibrium. Efficiency in exchange economy. Pareto efficiency in economy with production. Equilibrium and efficiency: welfare theorems Equity and efficiency. Market failures: the problem of externalities and possible solutions.
  • Missing markets and the role of government
    Market failures: the problem of externalities and possible solutions. Government interventions, public goods, taxation; Income distribution, the Gini coefficient and Lorenz curves
Assessment Elements

Assessment Elements

  • non-blocking Home assignments
  • non-blocking midterm test
  • non-blocking Winter exam
  • blocking Final exam
    University of London exam grade for the students studying the course for both Internal and International degrees; Internal exam grade for the students studying the course for HSE degree only
Interim Assessment

Interim Assessment

  • Interim assessment (2 module)
    0.2 * Home assignments + 0.25 * midterm test + 0.55 * Winter exam
  • Interim assessment (4 module)
    0.4 * Final exam + 0.35 * Interim assessment (2 module) + 0.25 * midterm test
Bibliography

Bibliography

Recommended Core Bibliography

  • Economics, Begg, D., 2011
  • Theory and application of intermediate microeconomics, Nicholson W., Snyder C., 2010

Recommended Additional Bibliography

  • Микроэкономика. Принципы и анализ : учебник, Коуэлл Ф., Демидовой А. В., 2011
  • Микроэкономика. Промежуточный уровень. Современный подход : Учебник для вузов, Вэриан Х. Р., Фроловой Н. Л., 1997