The Microeconomics module builds on ‘Introduction to Economics.’ Whereas that module is devoted to laying down the foundations of economic thinking and applying such thinking to macro concepts, this one will be all about the small constituents of the economy: individuals and firms. We will learn about the pros and cons of taxation, examine the rationale behind governments’ dislike of monopolies, and try to understand why economists believe that competitive firms necessarily make 0 profits.
Similar to the ‘Introduction’ module for Seniors, we will have 4 two-hour meetings. That means that you will have a new problem set every week, so be prepared to work hard on the details of the material.
In the first session, we will discuss how markets work, what elasticities are, and how governments should use taxation. We will also discuss how those concepts interact with the way in which markets create and distribute welfare. In the second session, we will introduce the concept of utility and take a deep look at how consumers make choices. In the third session, we will focus on the theory of a firm. We will compare and contrast the main types of market structure, like perfect competition, monopoly and oligopoly. We will also pick up some simple game theory along the way. In the final session we will cover a range of important topics in microeconomics: externalities, public goods, and sources of income inequality.
Similar to the ‘Introduction’ module, this course will be based around Greg Mankiw’s “Principles of Economics” textbook. Unsurprisingly, this time we will only focus on the microeconomics part of it.