Intermediate Microeconomics

2019-2020

Course Objective

The course highlights the traditional economic approach towards standard
positive and normative questions. The main goal of the course is to make
the student comfortable as a user of the fundamental microeconomics
model at an advanced level.
By the end of the course, it is expected that:
• ACADEMIC AND RESEARCH SKILLS: The student can draw economic hypotheses
and derive policy conclusions using his/her knowledge of the work-horse
microeconomics model of competitive markets.
• BRIDGING THEORY AND PRACTICE - KNOWLEDGE: The student understands the
background of the academic literature and is able to make a connection
between the existing puzzles and enquiries and the microeconomics
methods used to address them.
• BRIDGING THEORY AND PRACTICE- APPLICATION: The student can address
real-life societal and market challenges by applying the theory of
competitive markets.
• PROFESSIONAL SOCIAL SKILLS: The student can invoke the relevant
theories to present his/her research findings to expert and non-expert
audiences.
• BROADENING YOUR HORIZON: The student can critically assess the methods
and answers used to address social, societal and economic problems.
• SELF-AWARENESS: The student can independently identify and fill in
his/her gaps in knowledge and skills to develop as round professionals.

Course Content

This course is about the theory and applications of competitive markets,
the most basic microeconomics tool used by economists and practitioners
for the understanding of the functioning of markets and the implications
of economic policy.

Topic 1. Choice and demand
Here we develop the notion of demand in a formal way. The analysis
serves to understand how individuals make choices in a variety of
contexts.
Concepts: Preferences and utility, Marshallian demand, Indirect utility,
Duality, Hicksian demand, Expenditure function, Slutsky equation,
Compensating and equivalent variation, Consumer surplus. Choice under
uncertainty.
Topic 2. Profit Maximization and Cost Minimization
Here we examine the production and supply of economic goods.
Concepts: Production function, marginal productivity and returns to
scale, Cost functions and derived concepts, Short-run and long-run
distinction, Output supply decisions and (conditional) input demand,
Profit function.

Topic 3: Partial, General Equilibrium and Welfare.
Here we show how to aggregate individual decisions to yield the notions
of aggregate demand and supply. We develop the idea of equilibrium
price, a signal that coordinates all actors in the market. The
efficiency of the competitive equilibrium is demonstrated. Finally, we
look into how the notion of equilibrium and its welfare properties
extend to multi-market settings.
Concepts: Demand aggregation, Supply aggregation, Partial equilibrium,
Consumer and producer surplus, Social welfare, General equilibrium,
Excess demand, Walras’ Law, Edgeworth box, Edgeworthian bargaining, The
core of an economy, Relative prices, Pareto efficiency, Fundamental
theorems of welfare economics, Social welfare functions, Efficiency vs.
equity.

Teaching Methods

This is a 3 weeks course, totalling 18 student/teacher contact hours: 12
for lectures, 6 for tutorial sessions.
Each week has 2 theory sessions of 2 hours each, and one practice
session of 2 hours.
Students are expected to come to all the sessions.

Method of Assessment

The course is good for 3 ECTS credits. The final grade will be awarded
based on two grades as follows:
• Written exam: 75%
• Problem sets: 25 %
The final grade is the weighted average of the written exam and the
problem sets if the former is at least 5.0; otherwise the final grade is
the grade of the written exam.

Entry Requirements

Microeconomics at the level of Varian, H. R.
Intermediate
Microeconomics. 8th edition. W. W. Norton, 2010.


Mathematics at the level of Sydsaeter, Knut and
 Hammond, Essential
Mathematics for Economic Analysis, Prentice Hall, 3rd
ed., 2008

Literature

Snyder and Nicholson: Microeconomic Theory: Basic Principles and
Extensions, 12th Edition, CENGAGE Learning.

Target Audience

This course is intended for MA Econ and MA STREEM students.

Additional Information

The nature of this course is such that students should become familiar
with working with formal mathematical models. This requires practice,
perseverance and patience.

Explanation Canvas

All the course information and communication will take place through the
CANVAS site of the course.

Recommended background knowledge

Students wishing to refresh their math skills are strongly encouraged
to
 attend the course "Math Refresher", starting end of August.

General Information

Course Code E_EC_INTMMIE
Credits 3 EC
Period P1
Course Level 400
Language of Tuition English
Faculty School of Business and Economics
Course Coordinator prof. dr. J.L. Moraga Gonzalez
Examiner prof. dr. J.L. Moraga Gonzalez
Teaching Staff prof. dr. J.L. Moraga Gonzalez

Practical Information

You need to register for this course yourself

Last-minute registration is available for this course.

Teaching Methods Study Group, Lecture
Target audiences

This course is also available as: