Dr M Bray, STC. S476 and Dr E Eyster, STC. S475

This course is for BSc Accounting and Finance, BSc Econometrics and Mathematical Economics (second year students), BSc Economic History with Economics, BSc Economics, BSc Economics and Economic History, BSc Economics with Economic History,  BSc Mathematics with Economics, BSc Environmental Policy with Economics, BSc Geography with Economics, BSc Government and Economics, BSc Management Sciences, BSc Philosophy and Economics, BSc Social Policy and Economics, the Diploma in Accounting and Finance and MSc Economics (Two Year Programme).

This is an intermediate course in microeconomic analysis.  Students are expected to have completed EC102 Economics B or an equivalent introductory course in economics based on textbooks such as D Begg, S Fischer & R Dornbusch, Economics; P A Samuelson & W Nordhaus, Economics; or R G Lipsey, Positive Economics. Students are also expected to have completed an introductory mathematics course such MA107 Quantitative Methods (Mathematics) and should revise calculus including partial derivatives and the use of Lagrangians.

I. Consumer Theory. Utility functions and indifference curves. Income and substitution effects. The Slutsky equation. The expenditure function, compensating and equivalent variation, and consumer surplus. Selected applications to savings and labour supply, including the effects of taxes and benefits.

II. Producer Theory. Production and cost functions. Firm and industry supply. Perfect Competition and Monopoly.

III. Strategic Choice. Basic ideas in game theory. Applications to oligopoly and auctions.

IV. General equilibrium and welfare. Competitive equilibrium. Efficiency of equilibrium. Welfare criteria.

V. Topics in welfare economics. Public goods and externalities.

VI. Uncertainty and information. Choice under uncertainty. Insurance markets. Asymmetric information. Loss Aversion. Moral Hazard.

Lectures EC201: 40 MT and LT.

Classes EC201.A: (undergraduates) EC201.B (graduate students): 20 Sessional.

Classes will be largely devoted to discussion of problems designed to strengthen students' understanding of analytical methods.

Students should complete the weekly web-based quizzes before attending classes. In addition, at least five pieces of written work will be required and marked by class teachers.

A reading list will be provided at the start of the course. The main text for the course is Perloff, Microeconomics: theory and application with calculus, Second edition (Pearson 2011); students may also use the first edition (Pearson 2008). Reference is also made to other texts and to journal articles.

A three-hour written examination in the ST. Candidates are required to answer eight short questions and three long questions.