MICROECONOMICS - 1

This first year course within the curriculum "Economics, Markets and Finance" of the Bachelor in Economics and Business is a fundamental course in the economic area. The objective of the course is to introduce students to microeconomic reasoning and the basic principles of microeconomics are thus presented. In particular, after introducing the notion of market equilibrium as the crossing point between demand and supply, the demand is derived starting from consumer choices in various contexts and the supply is derived starting from optimal strategies of the firms with reference to their cost structures and the characteristics of the markets in which they operate. The course addresses both perfect and imperfect competition.

1. Knowledge and understanding:
1.1. understand the decision process of individuals as consumers and workers, as well as the decisions of business firms, and their interactions in various market structures;
1.2. understand the welfare implications of public intervention in markets;
1.3. identify the characteristics of the different market structures and their implications for firms’behaviour.

2. Ability to apply knowledge and understanding:
2.1. use the supply and demand model to determine changes in market equilibrium;
2.2. analyse the choices of individuals (as consumers and as workers) and firms using marginal analysis and the notion of opportunity cost;
2.3. assess equilibrium welfare and its variations associated to public policies and market structures;
2.4. be able to recognise individual decisions, strategic decisions and intertemporal decisions.

3. Ability to make judgments:
3.1. interpret market outcome and prices;
3.2. understand the function, merits and limitations of using economic models;
3.3. prepare students for independent economic thinking about economic and policy issues on the basis of an analytical method.

It is advisable to have had a course in Mathematics. In particular, students must be able to draw and interpret functions of two variables, to solve simple systems of equations and to take derivatives.

The full course consists of 12 credits and it is divided in two parts: Microeconomics 1 and Microeconomics 2.


Microeconomics 1
- Demand and supply, market equilibrium, elasticity.
- Consumer Theory: optimal consumption choice; derivatiom of the demand curve and of the Engel curve; income effect and substitution effect;
- Labour choice; intertemporal consumption; choices under uncertainty
- Production Theory: production functions; return to scale; cost minimization and cost function;

Microeconomics 2
- Profit maximization for price-taking firms
- Equilibrium in competitive markets
- Market interventions: tariffs and quotas, price cap, policies to support demand
- Monopoly and welfare losses
- Pricing policies: perfect price discrimination, two-part tariff, multi-market discrimination
- Game Theory: dominance and Nash Equilibrium, sequential games
- Oligopoly Models: Cournot, Bertrand and Stackelberg

The main textbook is:
"Microeconomics" by B. Douglas Bernheim and Michael D. Whinston, McGraw Hill Education Create

The following exercise book is also suggested:
"Microeconomics" by Monica Bonacina e Patrice De Micco, Egea.

For both books, the references given in class are to the latest edition available.

Written examination (120 minutes) with open questions and exercises analogous to those given in the practice sessions and in the exercise book. The passing grade is 18; points assigned to each question are clearly indicated in the exam.

You can take the exam in two partial written exams, at mid- and end-of-course. Each partial exam lasts 90 minutes.

The examination tests the student’s understanding of the topics covered in the course and his/her ability to analyse closely related problems and to interpret their results.

Two written examinations from the previous year can be found on the course page on the Moodle platform and their solution is presented in class.

The process of learning occurs through three activities:
a) formal lectures
b) exercise lectures
c) individual assignments
Students are urged to read the material before class, actively participate in class discussion and attempt the assigned problems (available on the course page on the Moodle platform) before attending the exercise lectures.

English

Accessibility, Disability and Inclusion
Accommodation and support services for students with disabilities and students with specific learning impairments

Ca' Foscari abides by Italian Law (Law 17/1999; Law 170/2010) regarding support services and accommodation available to students with disabilities. This includes students with mobility, visual, hearing and other disabilities (Law 17/1999), and specific learning impairments (Law 170/2010). If you have a disability or impairment that requires accommodations (i.e., alternate testing, readers, note takers or interpreters) please contact the Disability and Accessibility Offices in Student Services: disabilita@unive.it.

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