Dr Margaret Bray 32L4.27 and Prof Timothy Besley 32L3.37

This course is compulsory on the BSc in Environmental Policy with Economics, BSc in Geography with Economics, BSc in Government and Economics and BSc in Social Policy and Economics. This course is available on the BSc in Accounting and Finance, BSc in Business Mathematics and Statistics, BSc in Economic History with Economics, BSc in Economics, BSc in Economics and Economic History, BSc in Economics with Economic History, BSc in Finance, BSc in Mathematics and Economics, BSc in Mathematics with Economics, BSc in Mathematics, Statistics, and Business, BSc in Philosophy and Economics, BSc in Philosophy, Politics and Economics, BSc in Politics and Economics, Diploma in Accounting and Finance and MSc in Economics (2 Year Programme). This course is available as an outside option to students on other programmes where regulations permit. This course is available with permission to General Course students.

This is an intermediate course in microeconomic analysis.  Students are expected to have completed Economics A (EC100) OR Economics B (EC102), or an equivalent introductory course in economics based on textbooks such as Morgan W., M. Katz and H. Rosen, Microeconomics.  Students are also expected to have completed an introductory mathematics course such Quantitative Methods (Mathematics) (MA107) and should revise calculus including partial derivatives and the use of Lagrangians.

I. Consumer Theory. Utility functions and indifference curves. Income and substitution effects. The Slutsky equation. The expenditure function, compensating and equivalent variation, and consumer surplus. Selected applications to savings and labour supply, including the effects of taxes and benefits. II. Producer Theory. Production and cost functions. Firm and industry supply. Perfect Competition and Monopoly. III. Strategic Choice. Basic ideas in game theory. Applications to oligopoly. IV. The market system and general equilibrium.  Efficiency, distribution and inequality. V. Arguments for and the effectiveness of government intervention. Public goods and externalities. VI. Uncertainty and information. Moral hazard and adverse selection.

20 hours of lectures and 20 hours of classes in the MT. 20 hours of lectures and 20 hours of classes in the LT.

Two hours of revision lectures will be held in week 11 of both MT and LT

Students should complete the weekly web-based quizzes before attending classes. In addition, at least four pieces of written work will be required and marked by class teachers.

A reading list will be provided at the start of the course. The main text for the course is Snyder, C. and Nicholson, W.  "Microeconomic Theory: Basic Principles and Extensions". Reference is also made to other texts and to journal articles.

Exam (25%, duration: 1 hour, reading time: 15 minutes) in the January exam period.
Exam (75%, duration: 3 hours, reading time: 15 minutes) in the summer exam period.

The Lent term examination is based on the Michaelmas term syllabus, and the Summer exam on 33% on the Michaelmas term syllabus and 67% on the Lent term syllabus.