Principles of Economics or permission of the instructor.
Economics is the social science of satisfying unlimited wants with scarce resources. This microeconomics course begins with the study of individual decisions before moving to the interactions of individuals making decisions. We will follow this route with an eye to new insights from behavioural and experimental economics that explain more about our choices and interactions than simple "homo economicus" models.
After covering the micro foundations of demand, we will move to supply, to understand how cost curves are derived for individual firms, how multiple inputs affect economies of scope and scale, and how aggregate supply curves reflect markets that range from monopoly to duopoly to perfect competition. We will see how demand, supply and income are brought together in a general equilibrium. And we will discuss the efficiency and equity properties of the outcome of the economic process.
We will examine the impact of institutions, information and transaction costs on markets, missing markets, and non-market scenarios, to explore the interaction of economic, social and political forces. Finally we will look at the role of government intervening in markets.
After completing this class, students will have a demonstrable knowledge of:
- How individuals (demand) and firms (supply) interact in various market structures to determine the prices and quantities of produced goods.
- The process by which individual preferences (tastes) combine with income and prices to produce the demand curve.
- Factors affecting the slope of the demand curve (elasticity), and why the demand shifts in or out (income, tastes, complements and/or substitutes).
- The relations among marginal benefits, marginal costs and utility
- The process by which production inputs and technology combine with prices to produce the supply curve.
- The factors affecting the slope of the supply curve (elasticity) and why the supply curve shifts in or out (technology, regulation, input mix).
- Economies of scale and scope and the relations among average cost, marginal cost and total cost.
- The relations among marginal revenues, marginal costs and profits.
- How firms try to influence market structure and how different degrees of competition affect pricing, output, and social surplus.
- The efficiency and equity implications of market failure and government failure.
- The impacts of information and transaction costs on individual and firm behavior
Once available, timetables will be published here.
Mode of instruction
The course uses a variety of teaching methods: interactive lecturing, student presentations, class debate. Required readings must be read in advance of class.
Class participation, 15%;
Final written exam, 35%;
Midterm exam, 17,5%
Written assignment and short presentations, 17,5%
Two homework assignments, 7,5% each.
There will be a Blackboard site available for this course. Students will be enrolled at least one week before the start of classes.
- Pindyck, Rober S. and Daniel L. Rubinfield, 2015, Microeconomics, Eighth edition, Global Edition, Pearson Education Limited (ISBN: 978-1-292-08197-7)
- Additional information to be posted at Blackboard
- Lecture material to be posted at Blackboard
This course is open to LUC students and LUC exchange students. Registration is coordinated by the Education Coordinator. Interested non-LUC students should contact firstname.lastname@example.org.