Microeconomics (ECON30010)

Intended learning outcomes

On successful completion of this subject, students should be able to:

• Distinguish between positive and normative issues;
• Appreciate the purpose of models and the inevitable limitation of every model;
• Apply formal models to analyse positive problems and answer normative questions;
• Identify the conditions under which markets can be expected to work satisfactorily, and the conditions under which they cannot;
• Apply thorough economic reasoning to shed light on ongoing policy debates;
• Identify and analyse problems that arise from imperfect information including the phenomenon of adverse selection and the principle-agent problem;
• Apply game theory techniques to analyse situations with strategic interactions, such as competition between firms with market power, provision of public goods, or between generals at war;
• Apply advanced economic tools and reasoning to inform policy debates;
• Identify the properties of standard competitive markets (consumer theory, producer theory, welfare theorems, decision making under uncertainty);
• Understand Coase Theorem and its implications, which include transaction costs economics, for environmental policy, and market design.

Generic skills

• High level of development: Economic reasoning; appreciation of the use of models; purpose and limitations of models; evaluate models; use models to analyse positive questions and to make normative evaluation of alternative policies;

• Moderate level of development: Mathematical analysis, written communication; critical thinking; problem solving; and receptiveness to alternative ideas.

• Some level of development: Independent thinking; solving new problems; constructing a coherent argument; apply economic reasoning to a variety of practical problems.