Microeconomic Principles I
This information is for the 2020/21 session.
Dr Dimitra Petropoulou 32L 2.29 and Prof Timothy Besley 32L 3.37
This course is compulsory on the BSc in Environmental Policy with Economics, BSc in Geography with Economics, BSc in Government and Economics, BSc in International Social and Public Policy and Economics and BSc in Social Policy and Economics. This course is available on the BSc in Accounting and Finance, BSc in Business Mathematics and Statistics, BSc in Economic History with Economics, BSc in Economics, BSc in Economics and Economic History, BSc in Economics with Economic History, BSc in Finance, BSc in Mathematics and Economics, BSc in Mathematics with Economics, BSc in Mathematics, Statistics and Business, BSc in Philosophy and Economics, BSc in Philosophy, Politics and Economics, BSc in Politics and Economics, Diploma in Accounting and Finance and MSc in Economics (2 Year Programme). This course is available as an outside option to students on other programmes where regulations permit. This course is available with permission to General Course students.
This is an intermediate course in microeconomic analysis. Students are expected to have completed Economics A (EC100) OR Economics B (EC102), or an equivalent introductory course in economics based on textbooks such as Morgan W., M. Katz and H. Rosen, Microeconomics. Students are also expected to have completed an introductory mathematics course such Quantitative Methods (Mathematics) (MA107) and should revise calculus including partial derivatives and the use of Lagrangians.
This is an intermediate course in microeconomic analysis giving a broad overview of economic principles including some recent developments in thinking. Students should expect to find the course challenging and by the end of it should be able to apply the tools of microeconomics to thinking about concrete economic problems. It will cover the following topics:
I. Consumer Theory – the analysis of decision-making under constraints: preferences and utility; utility maximisation and uncompensated demand; expenditure minimisation and compensated demand; income and substitution effects; welfare analysis. Selected applications to savings and labour supply. II. Behavioural Economics I –Anomalies in decision-making; time-inconsistency. III. Decision-making with Risk – expected utility theory; risk-sharing, risk-pooling and insurance; prospect theory. IV. Producer Theory – Production and cost functions; firm and industry supply; market structure. V. Strategic Choice – Game theory: simultaneous and sequential games; subgame perfection; repeated games. Selected applications to oligopoly; auctions. VI. The Market System as a General Equilibrium – Efficiency, distribution and inequality; social welfare. VII. Living Interdependently – Public goods and externalities; the role of government intervention. VIII. Behavioural Economics II – Analysis of markets; the role of government. IX. Political Economy – Effectiveness of government; preference aggregation; constraints on the power of the state, X. Asymmetric Information – Contracts and markets with moral hazard and adverse selection. XI. Innovation – product innovation; the role of government intervention.
20 hours of lectures and 11 hours of classes in the MT. 20 hours of lectures and 9 hours of classes in the LT.
There will be a reading week in Week 6 of LT only (no lectures or classes that week).
2 hours of revision lectures will be held in week 11 of MT. Revision sessions in the run up to the final examination will be organised in ST. Additional Questions and Answers sessions will be organised over the course of the academic year.
This course is delivered through a combination of classes and lectures totalling a minimum of 60 hours across Michaelmas Term and Lent Term. This year, some or all of this teaching will be delivered through a combination of virtual classes, live streamed (recorded) lectures, and some flipped content delivered as short online videos.
Students are expected to complete the weekly problem sets and any required reading before attending classes and will be encouraged to work in small groups. At least four pieces of formative coursework will be required and marked by class teachers over the course of the academic year. There will be varied opportunities to engage with the course material, such as producing a short literature review, a presentation or creating short videos. The diversity of tasks will make the course more inclusive and help students develop a broader range of skills.
Lecture material will be complemented with required additional reading from journal articles. There is no set textbook for this course, though chapters from suitable intermediate textbooks will be recommended for those who may wish to consult a text (though this is not required).
Students will be expected to discuss critically the theoretical ideas and models taught by engaging with the required reading alongside working through microeconomic problems. The relevance of the readings will be discussed through a series of podcasts by the lecturers and students will be encouraged to engage with readings through the completion of short tasks relating to them.
Exam (30%, duration: 1 hour, reading time: 15 minutes) in the January exam period.
Exam (60%, duration: 2 hours, reading time: 15 minutes) in the summer exam period.
Coursework (10%) in the MT and LT.
Important information in response to COVID-19
Please note that during 2020/21 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the situation of students in attendance on campus and those studying online during the early part of the academic year. For assessment, this may involve changes to mode of delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.
Total students 2019/20: 691
Average class size 2019/20: 26
Capped 2019/20: No
Value: One Unit
Personal development skills
- Problem solving
- Application of numeracy skills