Microeconomics I

COURSE DESCRIPTION

The course teaches the fundamentals of microeconomics by exploring the theoretical issues in the field and analyzing a current microeconomic situation in a case study. At the end of the course, the student is familiar with the theoretical aspects of microeconomics and is able to perform mathematical and statistical calculations on issues in the field.

CONTENT

1.Definition of the market. Consumer behaviour: choice in regard to the market basket, preferences, characteristics of preferences.
2.Utility function; indifference curves and preference map.
3.Consumer behaviour: maximizing of utility through the optimal choice of the market basket within the total budget. Marginal rate of substitution condition (MRS), its applications.
4.Demand system. Income-demand trajectory; Engel curves.
5.Demand system. Price-demand trajectory; demand curve, cross demand curve.
6.Demand, classification of goods: normal or inferior; ordinary, extraordinary goods; substitute, complementary goods.
7.Demand, classification of goods: normal or inferior; ordinary, extraordinary goods; substitute, complementary goods.
8.Consumer surplus (CS).
9.From individual demand to market demand. Flexibility of demand, flexibility of income, cross-flexibility.
10.Definition of a perfectly competitive market. Market demand.
11.Market supply. Flexibility of supply prices. Producer surplus (PS).
12.Balance in the market with perfect competition, balance in Pareto efficiency.
13.Government intervention: taxes, subsidies, price threshold, price ceiling, rationing. Deadweight loss (DL).
14.Time in the money market. The theory of national trade: exports, imports.
15.Manufacturing: technology, function of manufacturing, economic laws of manufacturing. Short and long term. CRS, IRS, DRS industries. Economy of scale.
16.The behaviour of a manufacturer in the market with perfect competition: analysis of the cost and profit of the usage of company's resources in the case of constant resources and product prices, factor demand.