Microeconomics

Content

Course Description

This course provides a thorough introduction to microeconomic theory. We will start with the basics of Calculus in order to work with Microeconomics models. Then, we will look at the basic ideas of tradeoffs, opportunity cost, and the benefits of trade, we will study how the market forces of supply and demand cause prices to be what they are. We will see the sense in which market economies are efficient, and the way governments can make our economy less or more efficient. We will delve behind the supply curve to see how firms choose their production levels to maximize profits, culminating in the model of perfect competition.

Course metadata

Course schedule

Course schedule is every Tuesday, Thursday, Saturday at 18.30. Though exact timing will be disscussed with course participants.

Course materials

Main materials are taken from:

Lectures/Seminars

  • Week 1&2: Introduction
    • Course Overview
    • Basics of calculus
  • Week 3: Supply and Demand
    • Applying Supply and Demand
    • Shapes of the Supply and Demand Curves
    • In-class Exercises
  • Week 4: Consumer Choice
    • Preferences and Utility Functions
    • Budget Constraintsand Constrained Choice
    • In-class exercises
  • Week 5: Applying Consumer Theory
    • Demand Curves and Income/Substitution Effects -Labor Supply
  • Week 6: Firms and Production; Costs
    • Production Theory
    • Costs
  • Week 7 : Competetive Firms and Markets
    • Competition
  • Week 8 : Applying the Competetive Model; Monopoly
    • Welfare Economics
    • Monopoly
  • Week 9 : Olygopoly and Monopolistic Competition
    • Oligopoly
  • Week 10 : International Trade; Uncertainty
  • Week 11: Capital Markets

Homework

Second Homework

Link for uploading essay.

Requirements:

  • Essay on any given topic should be written in English
  • The length should be 2000 words minimum.
  • There should be 80% of originality. The essays will be checked for plagiarism.
  • The essays would be graded on clarity and logical reasoning.

Consumer Theory:

  • Does the maximization of utility imply happiness?
  • What is more important in deciding a best bundle: preferences or constraints?
  • "The rational choice model is too restrictive in its characterization of individual behavior." Argue for or against this statement.
  • "The opportunity cost of leisure is not labor but rather hell." Argue for or against this statement.

Firms theory:

  • Is competition a process or a market structure?
  • "Perfect competition is neither." Argue for or against this statement.
  • Do firms really maximize profit?
  • "The neoclassical characterization of the firm as an optimizing entity subject to constraints is too restrictive a characterization of the modern business enterprise." Argue for or against this statement.

Reports:

  • Taxation as the solution for obesity problem.
  • Friedman, Milton "The Social Responsibility of Business is to Increase Its Profits" New York Times Magazine, September 13, 1970.
  • Handy, Charles "What is a Business For?" Harvard Business Review December 2002.
  • Consumer Theory: Rabin, Matthew "Psychology and Economics" Journal of Economic Literature, Vol. 36 March 1998, pages 11-46.
  • Theory of the Firm: Penrose, Edith "The Firm in Theory" in The Theory of the Growth of the Firm 3e Oxford University Press, 1995, pages 9-30.

Grading

Please refer to Gradebook1 for detailed and uptodate information on the grading.

  • Participiation - 20 points
  • Attendance - 20 points
  • Homeworks - 30 points
  • Midterm - 15 points
  • Final 15 points
Warning

Instructor reserves the right to require any course participant to sit for an individual oral examination (with turned on webcam and mic) before submitting the final grade to the registrar. Refusal to sit for an individual oral examination by a course participant, may result in failing the course. Instructor will notify potential course participants about the oral examination one week prior the course completion.