Microeconomics and Environment
A.Y. 2026/2027
Learning objectives
The course examines the intersection between individual economic behavior and environmental sustainability. It explores how markets allocate resources, why environmental externalities arise, and how policy instruments, such as taxes, subsidies, and regulations, can correct market failures. The course is structured in two parts (modules).
The first part of the course is designed to provide a rigorous introduction to the conceptual apparatus of modern microeconomics, including consumer choice, production and cost decisions, game theory, and firm behavior under different market structures. Its objective is to equip students with the basic analytical tools required to read and understand contemporary literature in theoretical and applied microeconomics and possibly to approach more advanced research topics in this area.
The second part of the course applies the microeconomic approach to environmental problems. It examines how market failures such as externalities and public goods lead to environmental degradation and how policy instruments—taxes, permits, standards and behavioral interventions—can address these problems with a focus on their respective strengths and weaknesses. Students learn to analyze renewable resource management, apply basic cost-benefit analysis, and understand methods for valuing environmental goods. The course also introduces tools for policy evaluation. Students develop analytical skills to critically assess environmental policies and empirical evidence.
The first part of the course is designed to provide a rigorous introduction to the conceptual apparatus of modern microeconomics, including consumer choice, production and cost decisions, game theory, and firm behavior under different market structures. Its objective is to equip students with the basic analytical tools required to read and understand contemporary literature in theoretical and applied microeconomics and possibly to approach more advanced research topics in this area.
The second part of the course applies the microeconomic approach to environmental problems. It examines how market failures such as externalities and public goods lead to environmental degradation and how policy instruments—taxes, permits, standards and behavioral interventions—can address these problems with a focus on their respective strengths and weaknesses. Students learn to analyze renewable resource management, apply basic cost-benefit analysis, and understand methods for valuing environmental goods. The course also introduces tools for policy evaluation. Students develop analytical skills to critically assess environmental policies and empirical evidence.
Expected learning outcomes
By the end of the course, students will:
Module 1 - Microeconomics
Demonstrate a thorough understanding of the foundations of modern microeconomic analysis.
Explain and interpret key economic phenomena characterizing contemporary market economies.
Apply the analytical methods and theoretical tools of modern microeconomics to problems involving consumer and producer behavior, price formation, market efficiency, and social welfare.
Module 2 - Environmental Economics
Develop a solid understanding of the economic causes of environmental problems and compare alternative policy instruments designed to correct market failures, evaluating their effectiveness, advantages, limitations, and potential government failures.
Distinguish between the environmental challenges associated with renewable and non-renewable resources and identify appropriate policy responses.
Critically assess the methods used for the monetary valuation of environmental goods and services and perform basic cost-benefit analyses.
Understand the main tools used for environmental policy evaluation, recognize their application in academic research, interpret empirical findings, discuss them within the broader context of environmental economics, and communicate results using appropriate technical terminology.
Module 1 - Microeconomics
Demonstrate a thorough understanding of the foundations of modern microeconomic analysis.
Explain and interpret key economic phenomena characterizing contemporary market economies.
Apply the analytical methods and theoretical tools of modern microeconomics to problems involving consumer and producer behavior, price formation, market efficiency, and social welfare.
Module 2 - Environmental Economics
Develop a solid understanding of the economic causes of environmental problems and compare alternative policy instruments designed to correct market failures, evaluating their effectiveness, advantages, limitations, and potential government failures.
Distinguish between the environmental challenges associated with renewable and non-renewable resources and identify appropriate policy responses.
Critically assess the methods used for the monetary valuation of environmental goods and services and perform basic cost-benefit analyses.
Understand the main tools used for environmental policy evaluation, recognize their application in academic research, interpret empirical findings, discuss them within the broader context of environmental economics, and communicate results using appropriate technical terminology.
Lesson period: year
Assessment methods: Esame
Assessment result: voto verbalizzato in trentesimi
Single course
This course can be attended as a single course.
Course syllabus and organization
Single session
Responsible
Lesson period
year
Prerequisites for admission
Basic mathematics and statistics for economics.
Assessment methods and Criteria
The final examination consists of two partial examinations, one for each course module:
1. Advanced Microeconomics (first-semester module)
2. Environmental Economics (second-semester module)
Each module contributes 50% to the final course grade.
For organizational purposes, students must register for each partial examination through the University booking system. The final course grade is registered once students have passed both module examinations with a minimum grade of 18/30.
Students may retake each partial examination. In this case, the grade obtained in the most recent attempt replaces any previous grade for that module.
Partial examinations taken during the 2026/2027 academic year remain valid until the end of the February 2028 examination session.
1. Partial examination - Advanced Microeconomics
The Advanced Microeconomics examination is the same for attending and non-attending students and consists of a closed-book written examination followed by an oral examination.
The written examination includes:
- Multiple-choice questions (8 questions covering theoretical concepts and short exercises, each with four possible answers, only one of which is correct). Each correct answer is worth 1 point. Incorrect answers receive no penalty.
- Open-ended exercises (3 problems, each divided into 4-5 sub-questions). Each problem is worth up to 8 points.
The oral examination follows the written examination and may include a discussion of the written test and broader course topics. It assesses students' ability to explain and critically discuss key concepts and integrate knowledge across different parts of the course.
A mock written examination will be provided before the end of the teaching period. Attending students who actively participate in classroom activities (e.g., quizzes and problem-solving exercises) may earn up to 2 bonus points.
2. Partial examination - Environmental Economics
The assessment differs for attending and non-attending students.
- Attending students
The module grade is based on:
-- Group assignment (30%)
-- Final examination (70%)
Group assignment
Students work in groups to investigate an environmental problem, critically assess the relevant scientific evidence, and prepare an in-class presentation (maximum duration: 30 minutes). Further details will be provided during the course.
Final examination
The final examination consists of a written examination followed by an oral examination.
The written examination includes:
- Multiple-choice questions assessing familiarity with the fundamental concepts of environmental economics.
- Applied exercises requiring the use of economic tools in specific contexts.
- Short essay questions designed to assess a deeper understanding of the course material and the ability to critically discuss and connect different topics.
The oral examination follows the written examination and may include a discussion of the written examination, the group assignment, and broader course topics. It assesses students' ability to explain and critically discuss key concepts, integrate knowledge across different parts of the course, and demonstrate an individual understanding of the group project.
Both the group assignment and the final examination are graded on a 30-point scale. The module grade is computed as the weighted average of the two components (30% group assignment and 70% final examination) and is expressed out of 30.
Students who obtain a passing grade (18/30 or higher) in the group assignment may retain that grade until the end of the February 2028 examination session.
- Non-attending students
For non-attending students, the module grade is based entirely on the final examination (100%), consisting of the written and oral examinations described above.
1. Advanced Microeconomics (first-semester module)
2. Environmental Economics (second-semester module)
Each module contributes 50% to the final course grade.
For organizational purposes, students must register for each partial examination through the University booking system. The final course grade is registered once students have passed both module examinations with a minimum grade of 18/30.
Students may retake each partial examination. In this case, the grade obtained in the most recent attempt replaces any previous grade for that module.
Partial examinations taken during the 2026/2027 academic year remain valid until the end of the February 2028 examination session.
1. Partial examination - Advanced Microeconomics
The Advanced Microeconomics examination is the same for attending and non-attending students and consists of a closed-book written examination followed by an oral examination.
The written examination includes:
- Multiple-choice questions (8 questions covering theoretical concepts and short exercises, each with four possible answers, only one of which is correct). Each correct answer is worth 1 point. Incorrect answers receive no penalty.
- Open-ended exercises (3 problems, each divided into 4-5 sub-questions). Each problem is worth up to 8 points.
The oral examination follows the written examination and may include a discussion of the written test and broader course topics. It assesses students' ability to explain and critically discuss key concepts and integrate knowledge across different parts of the course.
A mock written examination will be provided before the end of the teaching period. Attending students who actively participate in classroom activities (e.g., quizzes and problem-solving exercises) may earn up to 2 bonus points.
2. Partial examination - Environmental Economics
The assessment differs for attending and non-attending students.
- Attending students
The module grade is based on:
-- Group assignment (30%)
-- Final examination (70%)
Group assignment
Students work in groups to investigate an environmental problem, critically assess the relevant scientific evidence, and prepare an in-class presentation (maximum duration: 30 minutes). Further details will be provided during the course.
Final examination
The final examination consists of a written examination followed by an oral examination.
The written examination includes:
- Multiple-choice questions assessing familiarity with the fundamental concepts of environmental economics.
- Applied exercises requiring the use of economic tools in specific contexts.
- Short essay questions designed to assess a deeper understanding of the course material and the ability to critically discuss and connect different topics.
The oral examination follows the written examination and may include a discussion of the written examination, the group assignment, and broader course topics. It assesses students' ability to explain and critically discuss key concepts, integrate knowledge across different parts of the course, and demonstrate an individual understanding of the group project.
Both the group assignment and the final examination are graded on a 30-point scale. The module grade is computed as the weighted average of the two components (30% group assignment and 70% final examination) and is expressed out of 30.
Students who obtain a passing grade (18/30 or higher) in the group assignment may retain that grade until the end of the February 2028 examination session.
- Non-attending students
For non-attending students, the module grade is based entirely on the final examination (100%), consisting of the written and oral examinations described above.
Advanced microeconomics (first semester)
Course syllabus
The course will cover the following topics:
1. Consumer Behavior
The Market; Budget Constraint; Preferences; Utility; Choice; Demand; Consumer's Surplus; Market Demand
2. Market Interaction
Equilibrium; Welfare
3. Production and Costs
Technology; Cost Minimization; Cost Curves
4. Firm Behavior in Different Market Structures
Firm Supply (and Competitive Firms); Industry Supply; Monopoly; Monopolistic Competition; Oligopoly; Game Theory
1. Consumer Behavior
The Market; Budget Constraint; Preferences; Utility; Choice; Demand; Consumer's Surplus; Market Demand
2. Market Interaction
Equilibrium; Welfare
3. Production and Costs
Technology; Cost Minimization; Cost Curves
4. Firm Behavior in Different Market Structures
Firm Supply (and Competitive Firms); Industry Supply; Monopoly; Monopolistic Competition; Oligopoly; Game Theory
Teaching methods
Face-to-face lectures and in-class exercises.
Teaching Resources
Slides and other course materials will be made available regularly by the instructor on the Ariel platform.
The suggested textbook is:
Hal R. Varian, Marc J. Melitz, Intermediate Microeconomics: A Modern Approach, 2024, 10th Edition W. W. Norton & Co. (ISBN: 978-1324034308)
The suggested textbook is:
Hal R. Varian, Marc J. Melitz, Intermediate Microeconomics: A Modern Approach, 2024, 10th Edition W. W. Norton & Co. (ISBN: 978-1324034308)
Environmental economics (second semester)
Course syllabus
Students will find on the course Ariel platform 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:
1. Welfare economics and the environment
2. Market failures, externalities, and environmental degradation
3. Environmental policy instruments, their evaluation, and their failure
4. Evaluation of environmental goods and cost-benefit analysis
5. Common-pool resources and environmental public goods
6. Behavioral environmental economics
The course will cover the following topics:
1. Welfare economics and the environment
2. Market failures, externalities, and environmental degradation
3. Environmental policy instruments, their evaluation, and their failure
4. Evaluation of environmental goods and cost-benefit analysis
5. Common-pool resources and environmental public goods
6. Behavioral environmental economics
Teaching methods
Face-to-face lectures, in-class exercises, case studies, in-class discussions, group assignments (project work and presentation).
Teaching Resources
Slides and other course materials will be made available regularly by the instructor on the Ariel platform.
Suggested textbooks are:
Goodstein, Wong, Polasky "Economics and the Environment", Wiley, 10th edition, 2025
Turner, R. K., Pearce, D. W., & Bateman, I. (1993). Environmental economics: An introduction.
Suggested textbooks are:
Goodstein, Wong, Polasky "Economics and the Environment", Wiley, 10th edition, 2025
Turner, R. K., Pearce, D. W., & Bateman, I. (1993). Environmental economics: An introduction.
Modules or teaching units
Advanced microeconomics (first semester)
ECON-01/A - Economics - University credits: 6
Exercises: 16 hours
Lessons: 40 hours
Lessons: 40 hours
Professors:
Alderighi Marco, Frattini Federico Fabio
Environmental economics (second semester)
ECON-01/A - Economics - University credits: 6
Lessons: 48 hours
Professor:
Bonan Jacopo Daniele
Professor(s)
Reception:
Lunedì 14.30-15.30
Via Conservatorio 7, 2nd floor
Reception:
Thursday 16.00 - 17.30
Office - via Celoria 2, first floor or TEAMS (always on appointment)
Reception:
Lunedì 15:00 - 16:00
Microsoft Teams. I kindly ask for an email prior to the appointment.