Microeconomics
A.Y. 2021/2022
Learning objectives
The objective of this course is that each student learns how to use microeconomic reasoning to analyse individual, group, and societal behaviour in a wide range of settings and to apply that reasoning to the challenges of our time.
Expected learning outcomes
Students will acquire a set of skills that will be useful for their future, both within and outside academia:
· Starting with a question or a problem about the economy—why the advent of capitalism is associated with a sharp increase in average living standards, for example— students will learn to identify which tools of economics can contribute to an answer.
· In doing so, students will acquire knowledge on the basic principles of microeconomics.
· This process, through mastering of economics tools, will enable students to apply these tools to new problems.
· By exercising critical thinking, students will be encouraged to evaluate critically the solutions offered by policy makers to these problems in the real world
The range of assignments for the course will improve students' ability to apply economic tools to real world problems, will give them the opportunity to acquire initial knowledge of and practice data analysis and writing skills, and will inform their future work (within and outside the university) by encouraging them to think in depth about a topic of their choosing within the course curriculum.
· Starting with a question or a problem about the economy—why the advent of capitalism is associated with a sharp increase in average living standards, for example— students will learn to identify which tools of economics can contribute to an answer.
· In doing so, students will acquire knowledge on the basic principles of microeconomics.
· This process, through mastering of economics tools, will enable students to apply these tools to new problems.
· By exercising critical thinking, students will be encouraged to evaluate critically the solutions offered by policy makers to these problems in the real world
The range of assignments for the course will improve students' ability to apply economic tools to real world problems, will give them the opportunity to acquire initial knowledge of and practice data analysis and writing skills, and will inform their future work (within and outside the university) by encouraging them to think in depth about a topic of their choosing within the course curriculum.
Lesson period: Third trimester
Assessment methods: Esame
Assessment result: voto verbalizzato in trentesimi
Single course
This course cannot be attended as a single course. Please check our list of single courses to find the ones available for enrolment.
Course syllabus and organization
Single session
Responsible
Lesson period
Third trimester
The lectures of the course will take place in presence. However, given the likely restrictions to classroom's capacity due to the Covid-19 pandemic, the lectures will also be streamed online. Given the challenges of blended teaching, three key goals guide the definition of the main features of the course:
1. Ensuring continuous student engagement throughout the course.
2. Monitoring student engagement and progress throughout the course.
3. Fostering students' interaction with the instructor and with each other.
Consistent with these goals, the following features are envisioned:
· Live online classes will feature
o online polls, to monitor students' engagement and understanding of the topics being covered; and
o opportunities for discussions in pairs or small groups on specific topics or empirical evidence;
· Live online classes will in principle not be recorded, unless particular students' needs should emerge. Lecture slides will be shared, to facilitate students' independent learning. All the course material will be uploaded on the Ariel course page.
· Reading, and possibly media, material will be provided before live lectures: students will be required to familiarize themselves with the material before the lectures, so that more time can be devoted during the lectures to the discussion of the material, and less to frontal teaching.
· A Forum will be created within the course page on Ariel for students to interact with the instructor and each other on the required course material and more in general on the topics of the course.
· In order to incentivize students to read the material before lectures and to interact, the evaluation for the course will in part consist in short quizzes on the material and will reward students' participation during lectures and in the Forum.
· In person office hours, for small groups, will be held weekly to ensure also in person interaction with the instructor for students who wish or can attend. Similar opportunities for online office hours will be given to students not able to access the University.
1. Ensuring continuous student engagement throughout the course.
2. Monitoring student engagement and progress throughout the course.
3. Fostering students' interaction with the instructor and with each other.
Consistent with these goals, the following features are envisioned:
· Live online classes will feature
o online polls, to monitor students' engagement and understanding of the topics being covered; and
o opportunities for discussions in pairs or small groups on specific topics or empirical evidence;
· Live online classes will in principle not be recorded, unless particular students' needs should emerge. Lecture slides will be shared, to facilitate students' independent learning. All the course material will be uploaded on the Ariel course page.
· Reading, and possibly media, material will be provided before live lectures: students will be required to familiarize themselves with the material before the lectures, so that more time can be devoted during the lectures to the discussion of the material, and less to frontal teaching.
· A Forum will be created within the course page on Ariel for students to interact with the instructor and each other on the required course material and more in general on the topics of the course.
· In order to incentivize students to read the material before lectures and to interact, the evaluation for the course will in part consist in short quizzes on the material and will reward students' participation during lectures and in the Forum.
· In person office hours, for small groups, will be held weekly to ensure also in person interaction with the instructor for students who wish or can attend. Similar opportunities for online office hours will be given to students not able to access the University.
Course syllabus
Students will find on the course Ariel website the detailed course calendar and the lecture slides, containing all the information on required readings for each lecture.
The course will cover the following topics:
Topic 1 - Introduction. The importance of approaching economics through an empirical lens and the basic idea of an economic models are introduced using themes as economic growth, inequality and causality.
Topic 2 - Interactions between economic actors. We develop this topic in four steps.
- We start from the individual and examine the concept of preferences and constrained optimization, applying these concepts to the choice of work and consumption, and responses to wage increases in different countries.
- Next, we examine strategic interactions between individuals and introduce basic concepts in game theory, drawing from recent advances in behavioral economics.
- We then discuss the efficiency and fairness of economic exchanges, and how the distribution of surplus from exchanges depends on power relationships and institutions.
- Finally, we analyze the labor market and introduce principal-agent problems to describe employment relationships.
Topic 3 - Firms and markets. We discuss the microeconomics of firms and markets, introducing concepts such as demand functions, cost functions and the determination of market prices. We examine price-making firms selling differentiated goods as well as perfect competition.
Topic 4 - Intertemporal choice. We present the model of intertemporal consumption, and use it to explain how markets function in various contexts, specifically when incomplete information is an important feature.
Topic 5 - Market performance and failure. We conclude by considering the performance of actual markets. We examine the many different cases of external effects and unify them under the concept of incomplete contracts.
Additional topics may be covered, depending on time and students' interests. Possible topics are globalization; inequality; environmental conservation; innovation and the information economy; and institutions, policies and governments.
The course will cover the following topics:
Topic 1 - Introduction. The importance of approaching economics through an empirical lens and the basic idea of an economic models are introduced using themes as economic growth, inequality and causality.
Topic 2 - Interactions between economic actors. We develop this topic in four steps.
- We start from the individual and examine the concept of preferences and constrained optimization, applying these concepts to the choice of work and consumption, and responses to wage increases in different countries.
- Next, we examine strategic interactions between individuals and introduce basic concepts in game theory, drawing from recent advances in behavioral economics.
- We then discuss the efficiency and fairness of economic exchanges, and how the distribution of surplus from exchanges depends on power relationships and institutions.
- Finally, we analyze the labor market and introduce principal-agent problems to describe employment relationships.
Topic 3 - Firms and markets. We discuss the microeconomics of firms and markets, introducing concepts such as demand functions, cost functions and the determination of market prices. We examine price-making firms selling differentiated goods as well as perfect competition.
Topic 4 - Intertemporal choice. We present the model of intertemporal consumption, and use it to explain how markets function in various contexts, specifically when incomplete information is an important feature.
Topic 5 - Market performance and failure. We conclude by considering the performance of actual markets. We examine the many different cases of external effects and unify them under the concept of incomplete contracts.
Additional topics may be covered, depending on time and students' interests. Possible topics are globalization; inequality; environmental conservation; innovation and the information economy; and institutions, policies and governments.
Teaching methods
Live lectures: lectures will consist of live presentations over slides, with the inclusion of pair or small group discussions; and online polls and quizzes. The lectures will take place in the classroom, and streamed live on Teams. Students will be informed of the time of the lectures and connection details both through direct invitations from the platform and through announcements on Ariel.
Recorded videos: it is possible that specific topics will be covered by short recorded videos.
Classes: classes will apply the concepts discussed during the lectures through exercises.
Recorded videos: it is possible that specific topics will be covered by short recorded videos.
Classes: classes will apply the concepts discussed during the lectures through exercises.
Teaching Resources
The textbook for the course is "The Economy", by The CORE Team. Available for free online at: https://www.core-econ.org.
The other main material for the course are the lecture slides, which will be regularly uploaded on the course Ariel website.
Students will also find on the course Ariel website the detailed course calendar and the lecture slides, containing all the information on required readings for each lecture.
In addition, a warmly suggested read for any student, beyond its use within the course is:
· Banerjee, A. V. and E. Duflo. Good Economics for Hard Times. New York: Public Affairs, 2019.
The other main material for the course are the lecture slides, which will be regularly uploaded on the course Ariel website.
Students will also find on the course Ariel website the detailed course calendar and the lecture slides, containing all the information on required readings for each lecture.
In addition, a warmly suggested read for any student, beyond its use within the course is:
· Banerjee, A. V. and E. Duflo. Good Economics for Hard Times. New York: Public Affairs, 2019.
Assessment methods and Criteria
Evaluation criteria
A combination of assignment methods is planned, in order to evaluate and reward:
· Knowledge of the learning material
· Participation and engagement (for attending students only)
· The ability to use the tools of microeconomics to answer real-world economic questions
· The ability to ask new questions starting from the learning material
Attending students
· Participation (15% of the final grade): participation will be monitored during the live lectures, in terms of participation to the group discussions and pertinent interventions; and in the online Forum, in terms of contributions to the discussions on the reading material and lecture topics.
· Ongoing evaluation (45% of the final grade): part of the evaluation will involve quizzes on the live lectures, reading material or other teaching material, to be administered throughout the duration of the course.
· Problem set (20% of final grade): the problem set will consist of exercises that apply the tools learnt during the lectures and practiced during the classes.
o Group assignment (20% of final grade): students will be asked to choose a topic out of the ones covered during the course; to gather recent empirical evidence on it and comment it critically; and to identify potential directions for further research. The groups for this assignment will be formed by students, based on their interests in the different topics.
Non-attending students
Written exam: the exam will consist in multiple-choice questions of two types: long ones, similar to exercises; and short ones, to review the theory and test the ability to apply the concepts covered during the course to new problems.
Oral exams will be conducted when only few students enroll to an exam session.
A combination of assignment methods is planned, in order to evaluate and reward:
· Knowledge of the learning material
· Participation and engagement (for attending students only)
· The ability to use the tools of microeconomics to answer real-world economic questions
· The ability to ask new questions starting from the learning material
Attending students
· Participation (15% of the final grade): participation will be monitored during the live lectures, in terms of participation to the group discussions and pertinent interventions; and in the online Forum, in terms of contributions to the discussions on the reading material and lecture topics.
· Ongoing evaluation (45% of the final grade): part of the evaluation will involve quizzes on the live lectures, reading material or other teaching material, to be administered throughout the duration of the course.
· Problem set (20% of final grade): the problem set will consist of exercises that apply the tools learnt during the lectures and practiced during the classes.
o Group assignment (20% of final grade): students will be asked to choose a topic out of the ones covered during the course; to gather recent empirical evidence on it and comment it critically; and to identify potential directions for further research. The groups for this assignment will be formed by students, based on their interests in the different topics.
Non-attending students
Written exam: the exam will consist in multiple-choice questions of two types: long ones, similar to exercises; and short ones, to review the theory and test the ability to apply the concepts covered during the course to new problems.
Oral exams will be conducted when only few students enroll to an exam session.
Professor(s)
Reception:
Tuesday 9:30-12:30. Preferably, students are requested to set an appointment by email. Otherwise, they can send an email or a message on Teams during the office hours to check availability.
Room 219, Via Livorno