Advanced Microeconomics part 1 2400-ZU1MIZ1
The aim of the course is to introduce students to the basic issues and models in the field of microeconomics. The course covers topics such as consumer and producer choices, market equilibrium, the emergence of monopolies, public goods and incomplete information models. We will also discuss examples of interesting contemporary academic articles. The application of microeconomic models to analyze contemporary problems will also be discussed: the increase in wage inequality in developed countries, the design and costs of climate policy, the division of powers between the EU and member states, patent wars and the spread of new technologies.
Lecture topics (chapters in textbooks are given in parentheses):
1. Principles of the courses; introduction to microeconomics: demand, supply, equilibrium; elasticity of demand (VIM 1,15,16)
2. Preferences; Utility function; Budget constraints; graphical analysis of consumer choices (VIM 2-5, VMA 7, MWG 2A-D);
3. Walras' Demand; Walras's law, the law of demand; types of goods; Hicks' demand, Słucki's equation, consumer surplus, deadweight loss due to taxation (VIM 6,8,14,16, VMA 8,9, MWG 3D-G);
4. Optimization of firms: maximizing profits; cost minimization, cost curves (VIM 19-21, VMA 4.5; MWG: 5C);
5. Linear city model - Hotelling (1929) *;
6. The theory of the median voter; Consumer choices: a model of a city in a district - Salop (1979) *;
7. Externalities (VIM 34, VMA 24); public goods (V36), the problem of the commons; monopoly; monopolistic competition (VIM 24-25, VMA 14, MWG 12B);
8. Asymmetric information: signalling; principal and agent model (VIM 37, VMA 25; MWG 13C).
* Topics based on academic articles (see list below). During the lectures we will discuss simplified versions of the models. Only the models discussed in the lecture will be required.
Type of course
Prerequisites (description)
Course coordinators
Learning outcomes
A) KNOWLEDGE
The student has knowledge of the use of microeconomics in modelling producer and consumer behaviour and markets. He knows the practical applications of the presented theories and models.
The student knows and understands the concept of rationality both in relation to consumer choices and in the wider cultural context.
The student knows and understands the process of modelling consumer choices. He knows and understands the concept of equilibrium as applied to consumer choice and the derivation of the demand function. He knows the mathematical properties of the utility function.
The student knows and understands the concept of equilibrium as applied to the producer's choice and the derivation of the supply function.
The student knows the application possibilities of applying the consumer theory, both in economics and other social sciences.
The student knows the utility theory of John von Neumann and Oskar Morgenstern and its application in modern economics.
B) SKILLS
The student is able to use the theory and models to analyze real economic problems.
The student can analyze the properties of the production function, find the producer's equilibrium conditions and derive the supply function.
The student can identify the relationship between the generally understood sphere of production and changes in the economy and society.
The student can analyze the properties of the utility function, find the consumer's equilibrium conditions and derive the demand function.
The student is critical of the presented theory of consumer choice. He/she can point out the strengths and weaknesses of this theory as compared to other social science approaches. He/she can point to ethical problems and problems related to the homo oeconomicus model.
The student can distinguish between real processes and a model approach to a perfectly competitive market. He/she can separate the concepts of justice and efficiency.
C) SOCIAL COMPETENCES
The student can work in a team and plan his/her work.
The student can independently search for information in the subject literature.
The student is able to connect theoretical knowledge with further professional work and with other areas of social sciences and mathematics.
The student understands the need to popularise microeconomic models.
The student is aware of the enormity of phenomena that can be modelled in a microeconomic way.
The student shares knowledge and helps others understand microeconomic issues. He/she is aware of the impact of social capital on the achieved work results. S2A_K02
The student can communicate with others, communicate and defend his views, he/she can express himself on important social and world-outlook issues and has rhetorical and eristic skills.
KW01, KW02, KW03, KW04, KU01, KU02, KU03, KU04, KU05, KU06, KU07, KK01, KK02, KK03
Assessment criteria
A maximum of 100 points can be obtained during the course:
- final exam: max 70 points.
- active participation in classes and short tests during the semester: max 30 points.
Bibliography
Major textbok:
Hal Varian: Intermediate Microeconomics: A Modern Approach, W. W. Norton & Co., 2010 (VIM)
Additional textbooks:
Varian, H. R., Microeconomic Analysis, W. W. Norton & Co., ed. 3′ (VMA)
Mas-Colell, A., M. D. Whinston, J. R. Green, Microeconomic Theory, Oxford University Press, 1995 (MWG)
Academic articles:
Hoteling, Harold (1929). „Stability in Competition”, The economic journal; vol 39 no. 153 (Mar 1929), pp. 41-57
Salop, Steven C. (1979). "Monopolistic Competition with Outside Goods", The Bell Journal of Economics, Vol. 10, No. 1 (Spring, 1979), pp. 141-156
Textbooks and articles are auxiliary. Only the topics and models discussed in the lectures are required for the exam.
Additional information
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: