Foundations of Microeconomics (PPE)

2019-2020

Course Objective

By the end of the course students will

• be able to grasp the breadth, depth and scope of microeconomics, and
its relevance for and applicability to pressing social issues in modern
societies;
• be familiar with the main, unifying microeconomic principles, and know
how to analyze microeconomic problems using graphical and mathematical
tools;
• have acquired knowledge in the decisions taken by individual consumers
and producers to maximize utility and profits, respectively;
• have insight into the determination of equilibrium quantities and
prices in different market structures.

Course Content

The course gives students an understanding of how economic decisions are
being made at the micro level by households, firms and the government.
It offers tools for evaluating the consequences of policy choices on
‘equilibrium’ outcomes. The course consists of two parts. After
introducing some basic principles, such as the cost-benefit approach to
decision making and the supply and demand framework for explaining
prices and quantities of goods traded in markets, the first part
develops the theory of consumer behavior. We show how the theory of
rational choice can be used to derive individual and market demand
curves. The model is extended to cover intertemporal choice and choice
under risk and uncertainty. We also study the interplay between egoistic
and non-egoistic behavior in an evolutionary setting of natural
selection. Main results from the field of behavioral economics on
bounded rationality and cognitive limitations of consumer choice are
discussed. The second part of the course focuses on the theory of the
firm in different market structures. We begin with the theory of
production, which shows how labor, capital and other inputs are combined
to produce output. We then translate the theory of production into a
coherent theory of costs. Finally, we analyze price setting behavior in
four different market structures: perfect competition, monopoly,
duopoly/oligopoly and monopolistic competition. Throughout the course
the theories we discuss will be applied to real-world cases that fall
broadly within the domain of PPE.

Teaching Methods

Lectures and seminars (maths labs and active learning groups)

Method of Assessment

Midterm exam (50%)
Final exam (50%)
Seminar assignments (pass/fail)

Literature

Robert Frank & Edward Cartwright (2016), Microeconomics and Behaviour,
2nd edition, McGraw Hill Education.

Target Audience

First year PPE students

Additional Information

Please note that participation in the seminars is mandatory.

Custom Course Registration

There is a slightly different enrollment procedure for this module. The standard procedure of the Faculty of Humanities has students sign up for (i) the module, (ii) the form of tuition (lecture and/or preferred seminar group), and (iii) the exam. However, for this module the instructor will assign the students to the seminar groups. Therefore, students should sign up for (i) the module, (ii) lecture and (iii) the exam, but not for the seminar groups.

General Information

Course Code W_JSM_108
Credits 6 EC
Period P2
Course Level 100
Language of Tuition English
Faculty Faculty of Humanities
Course Coordinator dr. R.I. Luttens
Examiner dr. R.I. Luttens
Teaching Staff dr. R.I. Luttens

Practical Information

You need to register for this course yourself

Last-minute registration is available for this course.

Teaching Methods Lecture, Seminar*

*You cannot select a group yourself for this teaching method, you will be placed in a group.

Target audiences

This course is also available as: