The course aims to provide a rigorous albeit simple formalization of the individual decision making process in economics. While the description of the rational choice model will be made using the consumer's decision, the course will present possible extensions of its application. The course will also describe the most important market institutions, and provide basic principles of decision under risk, game theory, and taxation.
Expected learning outcomes
At the end of the course the students are expected to have acquired the tools necessary to: · interpret individual decisions as well as market outcomes in the real world using the perspective of an economist; · know how to frame an individual economic decision in a rational choice model; · attend other courses requiring the knowledge of principles of Microeconomics.
Lesson period: Third trimester
(In case of multiple editions, please check the period, as it may vary)
Introduction. Thinking like an economist. Cost-Benefit Analysis (Ch.1) Supply and Demand. (Ch.2) Consumer choice: the budget constraint (Ch.4) Consumer choice: Preferences (Ch.4) Consumer choice: Utility maximization (Ch.4) Individual Demand (Ch.5) Income and substitution effect (Ch.5) Elasticity (Ch.5) Taxation, Consumer Surplus (Ch. 6) Information (Ch. 7) Choice under risk (Ch. 7) Cognitive limitations and consumer behaviour (Ch. 9) Introduction to Game TheoryOther regarding behaviour (Ch. 8) Production, short and long run (Ch. 10) Costs, short and long run (Ch. 11) Relationship between cost curves (Ch. 11) Profit maximization and market equilibrium in the short run (Ch. 12) Adjustment in the long run (Ch. 12) Monopoly (Ch. 13) Price discrimination (Ch. 13) Cournot Model (Ch. 14) Bertrand Model, Collusion (Ch. 14) Labour (Ch. 15) Externalities (Ch. 18)
Prerequisites for admission
A successful attendance of the course relies upon basic mathematical tools such as systems of linear equations. Knowledge of differential calculus though not mandatory is very useful. Exam consists in a written test based on multiple choice questions and two open questions: one on the theory and one proposing a simple exercise.
Teaching consists in a theoretical part coupled with practical exercises and some experiments in class
The reference textbook is: Frank R. and E. Cartwright Microeconomics and Behaviour, 2nd Ed., McGraw Hill (2016) (Monopolistic Competition - pp. 414-27 - and Stackelberg model in Chapter 14, as well as chapter 16, 17 and 19 are not required)