Microeconomics II

2018-2019

Course Objective

Academic and Research Skills:
- you are able to apply economic theory using economic models;
- you understand how a problem can be formulated in terms of an abstract
economic model and how the results can be interpreted.

Bridging Theory and Practice:
- you understand and are able to analyze economics theories and models
in the field of (intermediate level) microeconomics;
- you are able to apply graphical tools, mathematical methods, and
computations;
- you understand and remember the concepts and theoretical mechanisms.

Course Content

This is a course in Microeconomics aimed at the intermediate level. The
course addresses the general (competitive) equilibrium. This includes a
discussion of the concept of Pareto efficiency and the conditions under
which efficiency can be reached. In this context social welfare is
considered. The concept of Pareto efficiency is being compared to the
concept of "fair" allocation. Externality and public good are reasons
for missing markets and may cause Pareto efficiency to be violated.
Monopoly is a market structure that leads to absence of Pareto
efficiency in the equilbirium. Causes of monopoly, such as the natural
monopoly, are considered. Monopolist can use their power to conduct
specific pricing strategies such as price discrimination. An market
structure in between competition and monopoly is monopolistic
competition. Firms in such markets have market power, but free entry
drives profits to zero in the long run. In oligopolistic markets
strategic interactions play an important role. Examples of such
interactions are the decision to cooperate or not, and to deter entry or
not. Game theoretic methods provide insight in various aspects of the
strategies. With the rise of information technology new forms emerged by
which supplies offer their products. Some specific issues in these new
markets are discussed. An auction is an allocation mechanism with
various applications, among which is the auctioning of radio
frequencies. In auctions strategy and game theoretic aspects play a role
as well. Information is a very important aspect in the functioning of
markets. Information asymmetry can lead to market failure, but also
induce agents to find mechanisms to signal information and to find
incentive payment schemes that function even if information is
incomplete. The concept of revealed preference will be explained during
the course.

Teaching Methods

Lectures.
Instruction tutorials.
Tutorials.

Method of Assessment

Assignments - Individual assessment
Exam with open questions - Individual assessment

Literature

Hal R. Varian, "Intermediate Microeconomics", 9th edition.
Supplementary materials (journal articles, cases, assignments): to be
announced.

Recommended background knowledge

Microeconomics I, Quantitative Research Methods I, Quantitative Research
Methods II.

General Information

Course Code E_EBE2_MICEC
Credits 6 EC
Period P4
Course Level 300
Language of Tuition English
Faculty School of Business and Economics
Course Coordinator dr. H.G. Bloemen
Examiner dr. H.G. Bloemen
Teaching Staff

Practical Information

You need to register for this course yourself

Last-minute registration is available for this course.

Teaching Methods Seminar, Lecture, Instruction course
Target audiences

This course is also available as: