URL study guide
https://studiegids.vu.nl/en/courses/2024-2025/W_JSM_108Course Objective
By the end of the course students will• be able to grasp the breadth, depth and scope of microeconomics, and its relevance for and applicability to pressing social issues in modern societies;
• be familiar with the main, unifying microeconomic principles, and know how to analyze microeconomic problems using graphical and mathematical tools;
• have acquired knowledge in the decisions taken by individual consumers and producers to maximize utility and profits, respectively;
• have insight into the determination of equilibrium quantities and prices in different market structures.
Course Content
The course gives students an understanding of how economic decisions are being made at the micro level by households, firms and the government. It offers tools for evaluating the consequences of policy choices on ‘equilibrium’ outcomes. The course consists of two parts. After introducing some basic principles, such as the cost-benefit approach to decision making and the supply and demand framework for explaining prices and quantities of goods traded in markets, the first part develops the theory of consumer behavior. We show how the theory of rational choice can be used to derive individual and market demand curves. The model is extended to cover intertemporal choice and choice under risk and uncertainty. We also study the interplay between egoistic and non-egoistic behavior in an evolutionary setting of natural selection. Main results from the field of behavioral economics on bounded rationality and cognitive limitations of consumer choice are discussed. The second part of the course focuses on the theory of the firm in different market structures. We begin with the theory of production, which shows how labor, capital and other inputs are combined to produce output. We then translate the theory of production into a coherent theory of costs. Finally, we analyze price setting behavior in four different market structures: perfect competition, monopoly, duopoly/oligopoly and monopolistic competition. Throughout the course the theories we discuss will be applied to real-world cases that fall broadly within the domain of PPE.Teaching Methods
Lectures and seminars (maths labs and active learning groups)Method of Assessment
Midterm exam (50%) Final exam (50%) Seminar assignments (pass/fail)Literature
Robert Frank & Edward Cartwright, Microeconomics and Behaviour, 3rd edition, McGraw Hill Education.Target Audience
First year PPE studentsAdditional Information
Please note that participation in the seminars is mandatory.Language of Tuition
- English
Study type
- Bachelor