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Microeconomics (ECON30010)

Undergraduate level 3Points: 12.5On Campus (Parkville)

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Year of offer2017
Subject levelUndergraduate Level 3
Subject codeECON30010
Semester 1
FeesSubject EFTSL, Level, Discipline & Census Date

The objectives of the subject are to introduce new techniques of microeconomic analysis; and to study applications of microeconomic theory to a range of situations involving behaviour of consumers and firms, and market interaction. Topics include game theory and oligopoly, economics of information, behaviour under uncertainty and general equilibrium analysis.

Learning outcomes

  • 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.

Last updated: 30 March 2017