- The objectives of the course are: to provide students with the knowledge of core concepts and models in the field of microeconomics; to provide students with the knowledge of basic microeconomic models' assumptions, internal logic and predictions, grounding the explanations on intuitive, graphical and analytical approaches; to develop students' ability to apply the knowledge acquired to the analysis of specific economic cases, recognizing proper framework of analysis and constructing and analyzing adequate economic model within this framework.
- derive the demand for a consumer under monetary and in-kind income;-provide graphical solution of utility maximization problem and perform comparative statics analysis - analyse the eﬀect of price and income changes on demand and explain it using Slutsky equation - analyse the problem of savers and borrowers - analyse the decision to supply labour - evaluate the welfare impact of a price change by calculating consumer surplus
- explain the diﬀerent risk attitudes and what they imply for the utility function analyse the demand for insurance explain the concept of diversiﬁcation
- derive the cost function in the SR and in the LR, explain the relationship bethween the average and marginal cost curves; explain the supply decision of a price-taking ﬁrm in the short run and in the long run
- derive the industry supply curve in the short run and in the long run; calculate the market equilibrium in the SR and in the LR;; explain the concept of the incidence of a tax or a subsidy; use the measure of welfare to evaluate the impact of policies
- derive the industry supply curve in the short run and in the long run; calculate the market equilibrium in the SR and in the LR; to evaluate the impact of a variety of tax and subsidy policies on the market; use the measure of welfare to evaluate the impact of different government policies
- derive the pure strategy Nash equilibrium and Subgame perfect Nash equilibrium, solve Cournot, Stackelberg and Bertrand games, derive the equilibrium in a game with diﬀerentiated products
- explain the concept of externalities and show how externalities lead to market failures; analyse remedial policies; explain the concept of public goods and analyse how private provision leads to an ineﬃciently low provision of such goods; demonstrate how strategic behaviour leads to over-exploitation of open-access resources in simple models;
- explain the diﬀerent types of asymmetric information problems; analyse the problem of adverse selection in the market for lemons; analyse separating and pooling equilibria in the signalling model of education; explain informally the impact of moral hazard in a variety of settings
- Consumer theorypreferences and utility, budget constraint, consumer choice; demand and comparative statics, Slutsky decomposition choice under in-kind income; labour supply and ntertemporal choice; consumer surplus
- Uncertaintycontingent commodities; expected utility and attitude toward risk; demand for insurance; diversification
- Producer theorytechnologies and their properties; cost minimization (SR and LR); profit maximization and firm’s supply
- Perfectly competitive marketsmarket demand; industry supply; partial equilibrium and efficiency; government policies analysis
- Monopoly and monopolistic behaviorpure monopoly; inefficiency and regulation; monopsony; price discrimination
- Strategic interactionsbasic concepts of game theory; simultaneous quantity competition (Cournot model); first-mover advantage in Stackelberg model; price competition (Bertrand model); differentiated goods
- Externalities and public goodsexternalities and efficiency loss; regulation (direct regulation, taxes/subsidies, tradable permits; internalization, property rights and Coase theorem); common property resources; public goods and efficiency; free riding problem
- Asymmetric informationhidden characteristics and adverse selection; private and government response; hidden action and moral hazard problem
- module 1 quizesThere are no makeup/retakes for quizzes/midterm. Student gets 0 for the missed quiz/midterm even if a valid document is provided.
- module 2 quizesThere are no makeup/retakes for quizzes/midterm. Student gets 0 for the missed quiz/midterm even if a valid document is provided.
- midterm testThere are no makeup/retakes for quizzes/midterm. Student gets 0 for the missed quiz/midterm even if a valid document is provided.
- Final examIf the Final mark is below 4 out of 10 then the student can sit a retake exam in the end of January/beginning of February. There will be two retakes for the final exam. Exam and retake tests may include any topics from the syllabus. All quizzes, midterm and final exams (and retakes) are closed book written tests.
- Interim assessment (2 module)Course mark is calculated according to the following formula: GFinal=max(0.1GQI + 0.2GQII + 0.25GMidterm+0.45GExam; 0.1GQI + 0.2GQII +0.7GExam), where GQI - average mark for module 1 quizzes; GQII - average mark for module 2 quizzes; GMidterm - midterm mark; GExam – final exam mark. Final mark is calculated out of 100 and then converted to the 10-points scale