ECH-21806 Microeconomics

Course

Credits 6.00

Language of instruction:

English

Contents:

The course deals with the standard neoclassical microeconomic theory (consumer theory, producer theory, general equilibrium and welfare) on an intermediate level.

Learning outcomes:

At the end of the course, the student is expected to be able:
1. to explain the following notions, and also (if that applies), to illustrate them graphically;
2. to determine them for simple concrete situations:
- consumer theory: preference relation (2), utility (2), (cobb-douglas, solow-, leontief-, quasi-linear and maximum) utility function, utility maximisation (1,2), indifference set (1,2), budget set (1,2), marginal rate of substitution (1,2), marshallian demand function (2), types of goods (2), substitution effect (1,2), income effect (1,2), siutsky equation, expected utility,
- producer theory: production function, long term, short term, cost (2), cost minimization (1,2), isocost set (1,2), marginal technical rate of substitution (1,2), conditional production factor demand function (2), cost function (2), returns to scale (2), profit (2), profit function (2), profit maximization (input and output perspective) (2), production factor demand function (2), supply function (2), elasticity (1,2) relation between elasticity and revenue.
- equilibrium theory: partial equilibrium (2), tax and subsidy (2), pure exchange economy, edgeworth box (1,2), (pareto efficient) allocation (1,2), contract curve (1,2), excess demand (2), aggregate excess demand (2), walrasian equilibrium (2), walras' law.
- game theory: game in strategic form, payoff function, strategy, multi-strategy, strictly dominant strategy (2), nash equilibrium (2), full cooperative multi-strategy (2), pareto efficient multi-strategy (2), prisoner's dilemma (2).
- oligopoliy theory: types of oligopolies, cournot equilibrium (2), von-stackelberg equilibrium (2), collusion (2).
- welfare theory: welfare measure, consumer's surplus (1,2), producer's surplus, compensating variation (1,2), equivalent variation (1,2), first and second welfare theorem, types of externalities (2), coase theorem.

Activities:

Lectures, practicals and homework.

Examination:

Written examinations/tests.

Literature:

- H. Varian, Intermediate Microeconomics, Norton & Company;
- T. Bergstrom and H. Varian, Workout in Intermediate Microeconomics, Norton & Company;
A course guide is available at the secretariat of the Economics of Consumers and Households Group