| CODE | ECN2051 | |||||||||
| TITLE | Intermediate Microeconomics 1 | |||||||||
| UM LEVEL | 02 - Years 2, 3 in Modular Undergraduate Course | |||||||||
| MQF LEVEL | Not Applicable | |||||||||
| ECTS CREDITS | 4 | |||||||||
| DEPARTMENT | Economics | |||||||||
| DESCRIPTION | The study-unit focuses on optimal rational behaviour by economic agents, both firms and households. The objective is to make students familiar with the basic static optimisation problems encountered in the microeconomics field. The study-unit deals with such issues as the determination of the optimal consumption bundle and the optimal input mix. Different market structures are also assessed to compare how outcomes vary according to the manner in which economic agents interact. Study-unit Aims: The aim is to enable students to analyse real world behaviour, at the microeconomic level, through the use of appropriate tools. The emphasis is on understanding and enable the prediction of likely market outcomes. Learning Outcomes: Knowledge & Understanding: By the end of the study-unit the student will be able to: a) Strategic behaviour through Game theory: - Including: normal form representation and decision trees - Static & dynamic games - Dominant strategies - Concept of iterated dominance - Nash Equilibrium and best response - Grim-trigger strategy including present value of future payoffs and estimating validity and sustainability of strategy b) Monopoly: - Solving for the optimal profit of a monopolist, and comparing with the competitive case - Deriving the deadweight loss - Natural monopoly - Monopolistic competition (location model) c) Oligopolies: - Deriving a Cournot equilibrium - Deriving a Bertrand equilibrium - Deriving a Stackelberg equilibrium - Mapping of reaction functions both mathematically and graphically - Explaining the intuition of a first mover advantage or disadvantage within a stackelberg context and implicit impact on profit d) Optimal input mix, production functions and cost curves: - Using Lagrangian to optimize a Cobb Douglas - Using Lagrangian to optimize a CES function e) General equilibrium: - Partial equilibrium analysis - Trade between 2 agents in a general equilibrium context within an edgeworth box and with initial endowments - Derivation of the contract curve and its implicit properties - First theorem of welfare economics - Second theorem of welfare economics f) Signalling: - Attainment of a pooling and separating equilibrium within an educational context g) Auctions: - English auctions - Dutch auctions - Sealed-bid auctions - Basic bidding strategies in sealed bid auctions - Winner's curse - Revenue equivalence theorem h) Indifference curves and budget constraints: - Utility and marginal utility - Revealed preference - Weak axiom of revealed preference - Strong axiom of revealed preference - Slutsky equation: • Slutsky substitution effect • Hicks substitution effect - Compensating and equivalent variation Main Text/s and any supplementary readings: - Varian Hal R (1999) Interemediate Microeconomics – A modern approach, 5th edition, WW Norton & co, USA - Perloff J, (2011) Microeconomics with calculus, 2nd edition, Pearson. |
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| RULES/CONDITIONS | Before TAKING THIS UNIT YOU MUST TAKE ECN1001 OR ( TAKE ECN1021 AND TAKE ECN1011 ) | |||||||||
| STUDY-UNIT TYPE | Lecture | |||||||||
| METHOD OF ASSESSMENT |
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| LECTURER/S | Lino Briguglio Marianna Scicluna |
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The University makes every effort to ensure that the published Courses Plans, Programmes of Study and Study-Unit information are complete and up-to-date at the time of publication. The University reserves the right to make changes in case errors are detected after publication.
The availability of optional units may be subject to timetabling constraints. Units not attracting a sufficient number of registrations may be withdrawn without notice. It should be noted that all the information in the description above applies to study-units available during the academic year 2025/6. It may be subject to change in subsequent years. |
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