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 BehaviorConsumer Preferences and utility functions
Budget Constraints
Consumer Choice
Individual and Market DemandIndividual Demand
Income and Substitution Effects
Market Demand
Firms and ProductionTechnology of Production
Production with One Variable Input (Labor)
Production with Two Variable Inputs and Isoquants
Returns to Scale
Elasticity of substitution
The Cost of ProductionMeasuring 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 SupplyPerfectly 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: MonopolyMonopoly
Monopoly Power
Sources of Monopoly Power
Social Cost of Monopoly Power

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.


  • 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)