Microeconomics

EMEC030H6 (15 credits)
Full-time and Part-time Year 2
Autumn Term

Lecturers: Stephen Wright & Emanuela Sciubba

Aims

This course aims to equip students with the standard methods and analytical tools of microeconomics, with emphasis on the relationship between the decisions of individual agents and the operation of markets. As the course progresses it will make some use of basic calculus, a necessary tool for an analytical approach to many interesting microeconomic issues.

Objectives

The students should be able to demonstrate that they:

• understand how the two sides of a competitive market, demand and supply, interact to determine the market clearing price and quantity;
• understand the impact of monopoly and imperfect competition;
• understand the theory of consumer choice that underlies the demand-side of the market;
• understand the role of risk and uncertainty in a consumer’s decision-making process;
• understand how individual firms’ supply decisions are formed based on cost minimisation and profit maximisation principles;
• know the basic concepts of game theory and appreciate the relevance of these concepts in applied market settings;
• understand how some specific markets perform in the presence of asymmetric information due to adverse selection and moral hazard problems;
• understand possible failures of the competitive market provision mechanisms due to “missing markets”.

Course Assessment

In-class mid-term test and final exam in January.

Textbooks

Students will require a recent edition of one of the following:

• Pindyck, RS and Rubinfeld, DL, Microeconomics.
• Varian H, Intermediate Microeconomics.

The structure of the course is more closely related to the first of these texts, which also has a less mathematical approach. Students who can cope with the maths may however prefer the second text, which is more compact.