| CODE | ECN1202 | ||||||||
| TITLE | Intermediate Microeconomics | ||||||||
| UM LEVEL | 01 - Year 1 in Modular Undergraduate Course | ||||||||
| MQF LEVEL | 5 | ||||||||
| ECTS CREDITS | 4 | ||||||||
| DEPARTMENT | Economics | ||||||||
| DESCRIPTION | The study-unit focuses on optimal rational behaviour by economic agents, both firms and households. The objective is to make students familiar with the basic static optimisation problems encountered in the microeconomics field. The study-unit deals with such issues as the determination of the optimal consumption bundle and the optimal input mix. Different market structures are also assessed to compare how outcomes vary according to the manner in which economic agents interact. Study-unit Aims: The aim is to enable students to analyse real world behaviour, at the microeconomic level, through the use of appropriate tools. The emphasis is on understanding and enable the prediction of likely market outcomes. Learning Outcomes: Knowledge & Understanding: 1. Theory of Consumer Choice: By the end of the study-unit, the student will be able to: - Define the budget line, preferences of the consumer, indifference curve, and utility functions; - Recognise consumer's optimisation problem and individual and market demand; - Describe the weak axiom of revealed preference, strong axiom of revealed reference, Slutsky equation, Slutsky substitution effect, and income effect; - Characterise and differentiate between different aspects of consumer preferences and optimisation; - Discuss the relationship between budget constraints, preferences, and consumer choices. 2. General Equilibrium: By the end of the study-unit, the student will be able to: - Define general equilibrium and Pareto optimality; - Recognise allocation efficiency and the first and second theorems of welfare economics; - Describe trade between two agents in a general equilibrium context within an Edgeworth box and with initial endowments; - Characterise and differentiate between various welfare theorems; - Discuss the implications of general equilibrium analysis for market efficiency and social welfare. 3. Theory of Production: By the end of the study-unit, the student will be able to: - Understand the Cobb Douglas production function and cost of production; - Describe the use of Lagrangian to optimise output subject to a budget constraint; - Classify different production functions and cost concepts; - Discuss the implications of production theory for firm behaviour and market outcomes. 4. Strategic Behaviour through Game Theory: By the end of the study-unit, the student will be able to: - Use game theory, payoff matrixes, and decision trees; - Recognise static and dynamic games, dominant strategies, and Nash Equilibrium; - Describe strategic interactions and best response strategies; - Classify different types of games and equilibrium concepts; - Use the applications of game theory in economics and other fields. 5. Monopoly: By the end of the study-unit, the student will be able to: - Define sources of monopoly power, natural monopoly, and cartel; - Define deadweight loss of monopoly; - Describe the optimal profit of a monopolist and compare it with the perfect competition case; - Classify different types of market structures and their implications for market outcomes; - Discuss the welfare implications of monopoly power and potential policy responses. 6. Monopolistic Competition and Oligopolies: By the end of the study-unit, the student will be able to: - Define monopolistic competition and oligopoly; - Define and derive the Cournot and Bertrand equilibrium; - Discuss the implications of monopolistic competition and oligopoly for market behaviour and outcomes. 7. Externalities and Public Goods: By the end of the study-unit, the student will be able to: - Define consumption and production externalities and public goods; - Understand the free-rider problem; - Describe solutions to externalities and properties of public goods; - Classify different types of market failures and their implications for welfare; - Characterise and differentiate between private and social costs and benefits; - Discuss the role of government intervention in addressing externalities and providing public goods. 2. Skills By the end of this study-unit, students will be expected to be able to: - Examine the basic model-building methodology of microeconomics; - Conceptualise microeconomic issues and examine the analytical reasoning underlying microeconomic analysis; - Examine the topics covered on several different levels: mathematical as well as graphical and heuristic or verbal; - Have a critical appreciation of the approach taken to economic issues and policies. Main Text/s and any supplementary readings: The presentations used in lecture will be made available online to students during the term. A problem set for each week will be available online. Answers to these problems will be discussed in tutorials. - Varian Hal R (2014) Intermediate Microeconomics 鈥� A modern approach, 9th edition, WW Norton & co, USA. - Perloff J, (2020) Microeconomics: Theory and Applications with Calculus, 5th edition, Pearson. - Wyn Morgan (Author), Michael Katz (Author), Harvey Rosen (2005) Microeconomics, McGraw Hill. |
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| STUDY-UNIT TYPE | Lecture | ||||||||
| METHOD OF ASSESSMENT |
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| LECTURER/S | Melchior Vella |
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The University makes every effort to ensure that the published Courses Plans, Programmes of Study and Study-Unit information are complete and up-to-date at the time of publication. The University reserves the right to make changes in case errors are detected after publication.
The availability of optional units may be subject to timetabling constraints. Units not attracting a sufficient number of registrations may be withdrawn without notice. It should be noted that all the information in the description above applies to study-units available during the academic year 2025/6. It may be subject to change in subsequent years. |
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