Microeconomics

COMPETENCES AND SKILLS THAT WILL BE ACQUIRED AND LEARNING RESULTS.

Knowledge

This course provides a set of tools appropriate for economic analysis. The applications are broad and include all fields of economics. The student learns to:

- Set up and solve the most common decision problems economic agents (consumers, firms) face.
- Identify the main variables that influence the behavior of economic agents.
- Understand the basic concepts of Consumer Theory: preferences, utility functions, marginal rate of substitution, budget set, demand functions, consumer surplus.
- Understand the concepts of uncertainty and risk, attraction and aversion to risk, risk premium, use and value of information.
- Understand the basic concepts of the Theory of the Firm: inputs and outputs, production function, opportunity cost, sunk costs, fixed and variable cost, total, average and marginal cost, short and long run costs, supply function.
- Evaluate the consequences al alternative regulatory policies in competitive and monopolistic markets (price controls, quotas, taxes and subsidies, tariffs).

Abilities
The course material teaches students how to:

- Frame economic problems by using formal models amenable to quantitative analysis.
- Use standard methods to solve decision problems.
- Apply equilibrium analysis to identify the results of the interactions of economic agents.

Aptitudes
The course encourages students to:

- Analyze economic problems without prejudices, and with precision and rigor.
- Reason critically.
- Learn autonomously.
- Argue a viewpoint showing its foundation and appreciating the merits of other opinions.

DESCRIPTION OF CONTENTS: PROGRAMME
The course focuses on the study of decision problems faced by consumers and firms, and on partial
equilibrium analysis. The concepts and tools presented are at the core of Economic Theory. Practical
applications are discussed to help understanding and show the potential of the theory. The use of
calculus provides economic analysis with a precision and functionality very useful in professional
activities.

The program includes the following topics:

I. Consumer Theory: preferences, utility functions, budget sets, demand functions, applications
(labor supply, taxes, subsidies, price indices), uncertainty (expected utility, risk attitudes, risk premium,
value of information).
II. Theory of the Firm: technology, production function, factors demand, cost functions, supply
function.
III. Partial Equilibrium Analysis: competitive and monopolistic markets.

LEARNING ACTIVITIES AND METHODOLOGY
The teaching methodology includes:
- Lectures in which the basic material is presented and discussed. Students are provided with class notes and basic textbook references to complete and deepen their understanding.
- Discussion of real occurring economic problems related to each of the topics.
- Experimental sessions in computer labs and other environments with the objective of helping understanding of the theory, promoting confidence in the theory¿s predictions, and revealing possible flaws.
- Solving and discussing practical exercises helpful to provide students with feedback on their level of
understanding and difficulties.
- Class presentations where student discuss the solution to exercises and/or relevant topics in the news, with the objective of developing students ability to analyze and communicate relevant information, and participating in fruitful exchanges of opinions.

ASSESSMENT SYSTEM
The course grade is a weighted average of the grade in the final exam (60%), which consists of exercises and short conceptual questions and is common to all the groups, and the "class grade" (40%), which is allocated based on the grades obtained on several quizzes that will be given during the course. In the "convocatoria extraordinaria", the grade will be that of that obtained in the exam.

% end-of-term-examination: 60
% of continuous assessment (assigments, laboratory, practicals?): 40