Intermediate Microeconomic Theory
Undergraduate Course, Nova School of Business and Economics, 2018
Teaching Assistant
Spring 2016; Fall 2017; Fall 2018
Course Goals
Microeconomics is an introduction to economic modeling. We teach how to use rigorous analysis and analytical tools to understand (i) how economic agents choose how to allocate scarce resources and (ii) the interaction of the individual choices in the society.
Course Content
| Consumer Behavior | Consumer Preferences and utility functions Budget Constraints Consumer Choice |
| Individual and Market Demand | Individual Demand Income and Substitution Effects Market Demand |
| Firms and Production | Technology of Production Production with One Variable Input (Labor) Production with Two Variable Inputs and Isoquants Returns to Scale Elasticity of substitution |
| The Cost of Production | Measuring Cost: Which Costs Matter? Cost in the Short-Run (SR) Cost in the Long-Run (LR) Long-Run versus Short-Run Cost Curves Economies of Scale |
| Profit Maximization and Competitive Supply | Perfectly Competitive Markets Profit Maximization Marginal revenue, Marginal Cost and Profit Maximization Choosing Output in the SR\SR Supply Curve SR Market Supply Choosing Output in the LR The Industry LR Supply curve |
| Market Power: Monopoly | Monopoly Monopoly Power Sources of Monopoly Power Social Cost of Monopoly Power Regulation Dynamics |
Learning Objectives
A. Knowledge and Understanding
As a result of completing this course you should be able to:
- Understand micro economic theory at an intermediate level
- Conduct graphical and algebraic quantitative analyses
- Apply supply and demand logic to policy problems
- Critically evaluate economic arguments in media and policy sources
B. Specific Skills
- Modeling consumer behavior
- The relationship between preferences and utility
- Income and substitution effects
- Cognitive biases and their impact on decision making
- Modeling firm production processes, understanding the link between production and costs
- Understanding the time horizons of short and long run, their meaning and implications for production processes
- Understanding the consequences of market power in firm’s decisions, in particular pricing
- Understanding the consequences of market power for producer, consumer, and total welfare
- Listing and analyzing the reasons for the existence of monopolies
- Possibilities of government intervention (regulation) in face of firm’s market power
- Understanding price determination and the consequences of market power in product markets
C. General Skills
Using economic modeling tools to approach real-life issues, based on policy examples and actual economic agents’ behavior and markets. The course makes extensive use of real-life examples to discuss the topics. It thus improves the student’s ability to consume and critically analyze economic and financial news.
Bibliography
- Microeconomics (Golsbee, Levitt and Syverson) (chapters 4-10)
- Microeconomics with Calculus (Jeffrey Perloff) (chapters 3-9, 11)
- Intermediate Microeconomics and its Applications (Nicholson and Snyder)