30403 - MICROECONOMICS
Course taught in English
Go to class group/s: 25
Synchronous Blended: Lessons in synchronous mode in the classroom (for a maximum of one hour per credit in remote mode)
Students learn how to think about the myriad of real-world economic and noneconomic issues through the lens of microeconomic analysis. The elegant and powerful tools of microeconomic theory endow students with an analytical mindset and a strong quantitative preparation, which form the building blocks for understanding the foundations of microeconomic analysis. The course combines mathematical rigor and a 360-degree vision of real-world economic and social phenomena to address fascinating questions about human behavior in economic and noneconomic settings.
- The beauty of microeconomics. How to think like an economist. Models and data.
- Rational choice theory
- Budget and time constraints
- How to model tastes: indifference curves and utility functions
- The consumer problem: constrained optimal choice
- Deriving uncompensated demand functions
- Price, income, and cross-price elasticities
- Expenditure function; deriving compensated demand functions
- Substitution and income effects
- Leisure versus labor choice; the labor supply
- Intertemporal choice; the saving and borrowing functions
- Choice under uncertainty; lotteries, expected utility, risk attitudes; insurance
- Game theory and its applications (Nash equilibrium; subgame perfect equilibrium)
- Firm theory: Production and costs
- Cost minimization and profit maximization
- Equilibrium in perfectly competitive markets
- Market interventions in competitive markets: welfare analysis
- Monopoly. Price discrimination.
- Monopolistic competition
- Oligopoly (Cournot and Bertrand models; cartels and collusion)
- General equilibrium analysis; Pareto efficiency; welfare theorems
- Externalities and public goods; free riding problem
- The journey through microeconomics: take-home message
- Acquire a profound knowledge of the theoretical underpinnings of Microeconomics and its myriad applications to the real world.
- Develop the ability to write an economic model, in particular to understand the choice behavior of individuals, households, workers, firms, and governments through markets and nonmarket interactions.
- Compare the theoretical predictions of models and the empirical evidence on economic outcomes.
- Apply the economic way of thinking to other fields outside economics, including anthropology, biology, demography, history, medicine, political science, and sociology.
- Develop a problem-solving attitude.
- Develop team-building and team-working skills in a multicultural environment.
- Learn to communicate in a clear and concise way.
- Learn to set priorities, meet deadlines, and deliver the expected outcomes.
- Develop the ability to think rigorously, analytically, and creatively at the same time.
- Face-to-face lectures
- Online lectures
- Guest speaker's talks (in class or in distance)
- Exercises (exercises, database, software etc.)
- Individual assignments
- Group assignments
The Microeconomics course is built around these building blocks (aka, pillars):
- Theory Lectures
- Understanding Microeconomics is about learning models and the theoretical framework through a combination of mathematical tools and economic intuition. In the theory lectures we learn together a series of concepts, models, graphs, and calculus-driven analysis that help us analyze myriads of economic and noneconomic issues through the lens of economic analysis.
- Individual Homeworks
- Individual homeworks (roughly one per week) are assigned through the Smartworks platform. The platform automatically grades the homeworks and explains the solutions.
- Group Problem Sets
- Long problem sets are assigned to groups of 3 or 4 students. Solutions must be typed using LaTex.
- Collective Office Hours
- To encourage continuous interaction between instructors and students, the instructors will hold weekly online meetings during which they answer questions of general interest and offer insights on current events through the eyes of Microeconomics.
There is no difference between attending and non-attending students. The material, the workload, the requirements, and the evaluation based on homeworks, problem sets, and exams, are identical for each student, attending and non-attending.
With the purpose of measuring the acquisition of the learning outcomes mentioned above, students' assessment is based on the following criteria and weights:
- 10% of the overall grade: individual homeworks through the SmartWorks platform integrated into Blackboard. Skills tested are: problem solving attitude, setting priorities and meeting deadlines.
- 10% of the overall grade: group problem sets typed in Latex and uploaded through Blackboard. Skills tested are: team working and multicultural attitude, leadership skills, problem solving attitude, setting priorities and meeting deadlines.
- 35% of the overall grade: Midterm exam on the first half of the program. Skills tested: the ability of applying theoretical concepts and models to specific economic problems and interpreting mathematical relationships in economic terms (eg., the Slutsky equation and the economic concepts of substitution and income effects in consumption, labor, and intertemporal choices).
- 35% of the overall grade: Final exam on the second half of the program. Skills tested: analytical skills and problem-solving attitudes.
- 10% of the overall grade: Final essay on the entire program. Skills tested: the ability of thinking critically about economic issues.
Instead of taking the midterm and final exams, students can take a general exam on the entire program. The grade of the general exam counts 70% of the overall grade.
Detailed information regarding the format of homeworks, problem sets, final essay, and exams will be provided during the first two weeks of the course. Grades are based on the X/30 cum laude scale with the minimum passing grade for the entire course being 18/30.
Students can find all the relevant information on BlackBoard (syllabus, lecture notes, individual homeworks, group problem sets, past exams, additional helpful material)
- The required textbook is Hal H. Varian. Intermediate Microeconomics with Calculus. International Student Edition. First edition. Norton Company (2020). ISBN 9780393690019, a book that combines a rigorous mathematical treatment of Microeconomics together with many applications and real-world examples.
- The purchase gives access to the SmartWorks platform, which is required for the individual Homeworks.
- The textbook is available at Egea bookstore, or through the publisher website (2 weeks for delivery), or through Amazon. Make sure you purchase the edition listed above with the correct ISBN number.