Microeconomics

Aim

After completing the course, the student should be able to:

• discuss a company's various production and cost relationships and how a profit-maximising company in perfect competition acts
• analyse how resource allocation via price formation works in different market forms
• in speech and writing, report on and analyse markets characterised by imperfect competition
• describe and apply methods for analysing strategic behaviour
• explain the meaning of economically efficient resource distribution and under which market conditions it can be achieved
• explain how incomplete information, external effects, and the nature of different goods can lead to markets not working efficiently
• apply economic models to analyse economic problems in the domains above.

Content

The course covers basic microeconomics. The course begins with the company's cost relationship and the market's complete competition being addressed. Furthermore, market power and imperfect competition are treated with the market forms of monopoly and oligopoly. Strategic behaviour and game theory are also addressed in connection with imperfect competition. The basic concepts of economic welfare theory, the definition of socioeconomic efficiency, and how markets with complete competition can lead to socioeconomic efficiency are covered. It then deals with how different market forms, incomplete information, and external effects can lead to inefficient resource allocation. Measures that can be taken to prevent inefficient resource allocation are also covered in the course.