• • Explain basic economic terminology (as e.g. opportunity costs, moral hazard, risk aversion) in a comprehensive and intuitive way.
• • Describe and rationalize the main assumptions behind simple economic models and analyze the role that those assumptions play in the models.
• • Use economic models graphically (diagrammatically) to analyze the effects of policy experiments (e.g. introducing taxes).
• • Derive numerically economic instruments and apply them in analytical settings (e.g. find a price elasticity and use the elasticity to predict a change in demand).
• • Solve algebraically simple microeconomic problems (e.g. utility maximization, profit maximization, and determination of the equilibrium economic variables), and reflect on the solutions with a critical mind.
• • Use economic intuition to explain topical policy issues (e.g. why are housing taxes popular among economists?).

Course content and structure

This course provides an introduction to the functioning of economic markets: it describes what lies behind the notions of demand and supply. Emphasis is placed on the behavioural assumptions that generate demand for particular products, and on whether the producers of a particular product compete in a perfect or an imperfect way. We also explore important extensions to the basic model such as uncertainty and symmetric information. The main blocks of the curriculum are:

• Supply and Demand
• Consumer theory: preferences, rationality assumptions, budgetary constraints
• Extensions: Uncertainty and information economics
• Producer theory: production and costs functions
• Market structure: perfect competition, monopoly, monopolistic competition, etc.

Practical Application of Theory

In each main block the theory is exemplified with everyday problems and issues. We will consider economic models evaluating policies such as minimum wages and commodity taxation.

Relation to a Business or an Institutional Setting

We consider in depth how different market structures affect firms and consumers. We also emphasize how governments design institutions to correct market imperfections.

Relation to International Business or Economics

Several examples from the international business area are considered. Examples will be drawn particularly from U.S., Canada and Europe.

Research Based Teaching

Issues which are currently under debate in economic research are presented when relevant. In particular, we will discuss the limits of neoclassical models and how the research frontier confronts those limits.

"Microeconomics",including MyEconLab, by Jeffrey M. Perloff