MICROECONOMICS - 1

Microeconomics studies how individuals, firms, the government, and other organizations make choices given the options available to them and how their decisions determine market prices and the allocation of society’s resources. The main objective of the course is to make students familiar with the economical way of thinking. We will cover the basic concepts and analytical tools of microeconomics and show how they can be used to understand a broad range of real-world problems. We will analyze both firms’ and consumers’ behavior and market equilibria.

1. Knowledge and understanding:
1.1. understand the decision process of individuals and business firms, and their interactions in various market structures;

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;

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

You are expected to be comfortable with the material covered in the Mathematics Prerequisite course.

The topics covered in Microeconomics-1 include:

Introduction to Microeconomics
1. Analyzing Economic Problems
2. Demand and Supply Analysis

Consumer Theory
3. Consumer Preferences and Utility Functions
4. Consumer Choice
5. The Theory of Demand
6. Applications of Consumer Theory

Theory of the Firm
7. Inputs and Production Functions
8. Costs and Cost Minimization
9. Profit Maximization

Bernheim, B. D., and Whinston, M. D., 2018, Microeconomics McGraw-Hill/Irwin, Inc. New York, NY.

There will be one final grade for the whole 12-credit course. Alternatively, students who regularly attend classes can take two midterms covering the material discussed in the first and in the second module, respectively. All exams are written, with open questions, exercises, and motivated true/false questions.

Lectures and practice sessions. For any course-related information, students can follow Moodle. The slides of the lectures and the problem sets will be uploaded on Moodle on a regular basis. Students are strongly encouraged to actively participate in class meetings and regularly work through the problem sets.

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