The learning objectives of the course are as follows:
Knowledge and understanding:
Students learn the tools and methodologies for the design and execution of microeconomic analysis.
Applying knowledge and understanding:
At the end of the course, students will know how to use models to describe the behavior and decision-making processes of businesses and individuals, to characterize the functioning of the markets, and to appraise the role of the state in economic choices.
Students learn how to analyze decision-making processes typical of complex organizational systems and how to appraise them.
Students learn how to discuss microeconomic issues precisely and clearly both with economists and laymen.
Students learn the skills needed to deepen specific topics and to acquire new competences in master programs in Italy and abroad.
Basic calculus (functions, differential calculus, optimization).
· Demand, Supply, and Market Equilibrium
· The Demand Curve, The Law of Demand, Normal and Inferior Goods, Consumer Surplus, From Individual to Market Demand, The Inverse Demand Function, Elasticity, Elasticity and Revenues, The Supply Curve, Producer Surplus, The Inverse Supply Function, Elasticity of Supply, Market Equilibrium, Comparative Statics, Pareto Efficiency.
· Consumer Theory
· The Budget Constraint, Consumer Preferences, Indifference Curves, Perfect Substitutes, Perfect Complements, The Marginal Rate of Substitution, The Utility Function, Cardinal Utility, Preferences over Perfect Substitutes and over Perfect Complements, Quasilinear Preferences, Cobb-Douglas Preferences, Marginal Utility, Optimal Choice, From Consumer Demand to Market Demand, Income Offer Curves and Engel Curves, Ordinary Goods and Giffen Goods, The Substitution and Income Effects, Intertemporal Choice, Inflation.
· The Firm
· Inputs and Outputs, Technological Constraints, The Technology with Inputs in Fixed Proportions and with Perfect Substitutes, Cobb-Douglas Technology, The Marginal Product, The Technical Rate of Substitution, Returns to Scale, Profit Maximization, Cost Curves, Cost Minimization, Fixed, Variable and Sunk Costs, Average and Marginal Costs, The Long Run and the Short Run.
· Competitive Model
· Pure Competition, The Supply Decision of a Competitive Firm, Profits and Producer’s Surplus, The Supply Curve, From Firm to Industry Supply, The Industry Equilibrium in the Short and in the Long Run, The Zero Profits Condition.
· Market Power: Monopoly, Oligopoly, Strategic Behavior
· Monopoly (Maximizing Profits, Markup Pricing, The Inefficiency of Monopoly, The Deadweight Loss of Monopoly, Price Discrimination, First-, Second- and Third-Degree Price Discrimination, Two-Part Tariffs).
· Oligopoly (Strategic Interaction, Cournot Equilibrium, Bertrand Equilibrium, Collusion, Punishment Strategies, The Leader’s and the Follower’s Problem, Stackelberg Model).
· Asymmetric information
· The Market for Lemons, Adverse Selection, Moral Hazard, Signaling, Incentives.
Microeconomics studies economic phenomena starting from the decisions of individual agents, from the characteristics of the technology and from the relationships that agents establish on the markets.
Specifically, the course covers the following topics:
Demand, supply, and market equilibrium (12 hrs)
Consumer theory (16 hrs)
Theory of the firm (16 hrs)
Competitive model (8 hrs)
Monopoly (6 hrs)
Oligopoly and strategic behavior (10 hrs)
Asymmetric information (4 hrs)
Lectures, tutorials and home assignments.
Varian, Microeconomia, Cafoscarina, 2007.
Martinelli, Esercizi svolti per la prova di scritta di Microeconomia, Simone editore (recommended)
Slides and notes are available on the e-learning portal.
Written final exam where students are asked to solve problems on consumer and firm decisions and to determine market equilibria. Problems similar to those part of the final exam are reviewed during the tutorials. The exam also includes multiple choice questions (or true/false questions) to assess students’ learning of theory.