|Year of offer||2017|
|Subject level||Undergraduate Level 3|
|Mode of delivery|
On Campus — Parkville
|Fees||Subject 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.
- 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.
- 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.