This module is intended to provide students with a firm grounding in the analytical methods of microeconomic theory and a clear understanding of the role of the price mechanism in organising
economic activity. The objective is to analyse the role of prices and the market mechanism in allocating scarce resources and to evaluate the outcome.
One of the pre-requisites for ECON3004, ECON3034 and ECON3015.
Pre-requisites: (ECON1020 or ECON1022) and (ECON1007 and ECON1008) or (MATH1058 and MATH1059)
Aims and Objectives
Having successfully completed this module you will be able to:
- Analyse consumer's behaviour in problems of intertemporal choice (saving) and asset markets
- Analyse the choices of a profit maximising form (profit maximisation problem, cost minimisation problem)
- Discuss the welfare properties of general equilibrium
- Understand the concept of equilibrium given different market institutions
- Demonstrate knowledge and understanding of the expected utility model and apply it to simple applications like investing in risky assets or buying insurance
- Use the Slutsky equation to understand analyse changes in demand
- Use the tools of microeconomic theory in modelling actual economic phenomena and in evaluating the performance of various economic institutions
- Find consumer demand as the solution to the utility maximisation problem given various frequently used preferences (Cobb-Douglas, Perfect complements and perfect substitutes, ...)
The module begins with a careful analysis of the choice behaviour of consumers and firms in the market place. These ideas are then used to analyse the formation of prices within markets. While some of the material will be familiar from the first year modules, the method of analysis is more rigorous in this module.
- Budget Constraint
- Preferences and Utility
- Choice and Demand
Theory of the Firm
- Production and Technology
- Cost Function and Cost Minimization
- Supply in Competitive Markets
Equilibrium with Perfect Competition
- Partial Equilibrium
- General Equilibrium (Exchange Economy)
- Welfare Properties of a Competitive Equilibrium (Exchange Economy)
- Intertemporal Choice
- Assets Markets
- Risky Assets
- Adverse Selection
Learning and Teaching
Teaching and learning methods
Lectures and problem classes
|Total study time||150|
Resources & Reading list
Hal Varian (2014). Intermediate Microeconomics With Calculus: A Modern Approach.
Varian (2014). Intermediate Microeconomics.
Assessment in this module is through coursework in form of two problem sets (10% of the final mark each), online tests (10%) and an end of module examination (70%). This is supported by formative assessment in form of problem sets. This is the same for internal repeats. Referral and external repeat assessment are through 100% end of module examination.
This is how we’ll formally assess what you have learned in this module.
This is how we’ll assess you if you don’t meet the criteria to pass this module.
An internal repeat is where you take all of your modules again, including any you passed. An external repeat is where you only re-take the modules you failed.
Repeat type: Internal & External