• Fully explain the basic concepts, models, theories and tools used in the principles of microeconomics and use them to analyze economic decisions by individuals and by firms
• Identify the foundational assumptions used in their own economic analysis and in the economics analysis of others
• Predict the effects of supply and demand changes on the direction of market price and quantity. Use the tools of consumer and producer surplus to identify the gains form exchange and the gains from the ability to manipulate price or quantity (e.g., the effects of barriers to entry, market power, monopolization, price controls, taxes, subsidies, and quotas.)
• Articulate and explain the systematic nature of economic analysis and address likely secondary effects of particular policies and institutional frameworks
• Analyze economic outcomes in terms of their contribution to recognition of scarcity and efficiency
• Communicate, discuss, and present sound logical conclusions from their analysis of economic incentives

The Principles of Microeconomics is the primary foundation for all other neoclassical economic theory including much of macroeconomics. Microeconomic theory principles provide insights into the behavior of both individual and collective actors (firms) in market settings. This course is the introductory course in any economics curriculum.  It will provide you with an insight into how economists analyze practical problems which present themselves to policy makers in the real world. The concepts are theoretical but we will develop a "set of tools for analysis" which you will be expected to apply. The materials in this course are used extensively in economics, financial economics, and business.

Economics is ultimately about problem-solving through critical thinking. We are asked to provide logical, well-argued, defensible answers to complex questions. To do this we must strip problems down to their essential assumptions, arguments, and then critically analyze them. We do not expect you to master problem-solving or critical thinking in this one course. We do expect that you will greatly increase your proficiency at these skills. 
  
The emphasize is on applications because economic conditions, and thus, "answers" are constantly changing. What is transferable, fundamental, and constant is the method of economic analysis which we will develop. The ability to apply these tools to varying situations and to make the results clear to others is what gives value to economic analysis.

The primary focus of this course is on the development of analytical prowess or "critical thinking." The discipline of economics originated within philosophy, rhetoric, logic and mathematics and transitioned through political economy in the 19th century into modern economics.  As a result, economics is a very broad social science drawing upon the interconnectedness of human action. We model human behaviors within particular institutional arrangements.
 
This course focuses on the behaviors of individuals, firms, and institutional actors. Students should be able to successfully apply time-tested, empirical models of microeconomic behavior.  

Preliminary Assignment: 
(1) Read the first two chapters of the textbook and prepare any questions that you may have for our first class meeting. 

(2) Carefully read this article: Hayek, F. A. 1945. “The Use of Knowledge in Society.” American Economic Review, 35(4): 519–30. Prepare answers to the questions supplied below and we will take time in class to discuss them.   

These are questions for our class discussion of this article: Hayek, F. A. 1945. “The Use of Knowledge in Society.” American Economic Review, 35(4): 519–30.

1. What is the central problem of designing "a rational economic order" according to Hayek? 
2. What role has mathematics of neoclassical models played in the economist’s quest to address economic problems? 
3. What has the development of neoclassical economics done to solve the problem according to Hayek?  
4. What does Hayek mean by this?
5. Hayek speaks to a misconception of the economic problem.  How is Hayek critical of the kind of modeling that we have been developing in this course?  What is the reality society must face in framing a rational economic order?
6. What is the crucial problem that must be explained by any theory of economic systems and process?  
7. Does Hayek reject "planning" in an economy?
8. What does Hayek say about the notion of centralized planning?
9. Hayek draws a distinction between scientific knowledge and what he calls “a body of very important but unorganized knowledge which cannot possibly be called scientific”?  Why does Hayek critical of scientific knowledge?
10. What is this knowledge that is dispersed and not scientific?
11. Why is “…the knowledge of the particular circumstances of time and place” an important distinction for Hayek in his study of economic systems?
12. How does society often view “the knowledge of particular circumstances of time and place”?  
13. What originates an economic problem? 
14. How would this fit in with both static and dynamic equilibrium models developed in neoclassical microeconomics?
15. What are the implications for planners? 
16. Why can’t the producers and buyers in an economy provide the information needed to economic planners which would allow the planners to correctly direct resources to their most highly valued use?
17. Under a functioning economic system what is the vital information which is available to all players and is used to direct resources to their most highly-valued use? 
18.  Explain Hayek’s famous tin example. 
19. What do people have to know in order to act? 
20. How do individual actions in a market get translated into social signals?
21.  How does “the whole act as one” under a market?
22.  How must we view the price system according to Hayek? 
23. What is the most significant factor the price system according to Hayek?
24. What does Hayek say about perfectibility? 
25. What would Hayek have us marvel at concerning the workings of the market system?
26. Does Hayek believe that "man" invented the price system as a way of supporting economic activity?  
27. Hayek wrote this article prior to the advent of the computer age.  We can now store and process far more information than previously.  What do you think Hayek would say about attempting to use this new technology to run a centrally-planned economy?
28.  Does today's Denmark take Hayek's arguments seriously? Why or why not?

Midterm Feedback Activity:
The Midterm Feedback Activity (MFA) offered will be a take-home examination covering only the course materials up to that point.  It will be of similar format to the final examination. Its format will be multiple choice and short answer. It will be posted on LEARN a week prior to its due date - the beginning of Class Meeting 5. This MFA is best viewed as learning opportunity for students. I encourage you - and you have my explicit permission - to work with a classmate or small team. of classmates. Ideally, you will learn from one another. The MFA questions will be drawn from the test bank which is a supplement to your textbook. 

Class 1 
Chapter 1 - The Big Ideas
Chapter 2 - The Power of Trade and Comparative Advantage

Class 2 
Chapter 3 - Supply and Demand
Chapter 4 - Equilibrium: How Supply and Demand Determine Prices

Class 3 
Chapter 5 - Elasticity and Its Applications
Chapter 6 - Taxes and Subsidies

Class 4 
Chapter 7 - The Price System: Signals, Speculation, and Prediction 
Chapter 8 - Price Ceilings and Floors

Class 5
Chapter 9 - International Trade
Chapter 10 - Externalities: When Prices Send the Wrong Signals

Class 6 
Chapter 11 - Costs and Profit Maximization Under Competition
Chapter 12 - Competition and the Invisible Hand

Class 7
Chapter 13 - Monopoly
Chapter 14 - Price Discrimination

Class 8 
Chapter 15 - Cartels, Oligopolies, and Monopolistic Competition
Chapter 16 - Competing for Monopoly: The Economics of Network Goods

Class 9 
Chapter 17 - Labor Markets
Chapter 18 - Public Goods and the Tragedy of the Commons

Class 10 
Chapter 19 - Political Economy and Public Choice 
Chapter 20 - Economics, Ethics, and Public Policy

Class 11 Comprehensive Review

Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings or video clips to be read or viewed before the start of classes with a related task scheduled for class 1 in order to 'jump-start' the learning process.

Course timetable is available on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams.

We reserve the right to cancel the course if we do not get enough applications. This will be communicated on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams end February 2018 at the latest.

Mandatory readings:

The Preliminary Assignment articles is available through JSTOR from the CBS Library. Hayek, F. A. 1945. “The Use of Knowledge in Society.” American Economic Review, 35(4): 519–30.

Textbook for the course: 
Tyler Cowen and Alex Tabarrok
Modern Principles of Microeconomics
ISBN-13: 978-1429278416
ISBN-10: 1429278412
Macmillan Publishing, 3rd Edition