040184 UK Microeconomics (2024W)

FORMAT (subject to change depending on the situation):
- There will be two in-person lectures each week on Wednesdays 18.30 - 20.00 and Thursdays 18.30 - 20.00.
- There will be one in-person Q&A session each week on Fridays (to be confirmed) to go over the weekly problem set.
- Johannes Hoelzemann will teach the lectures. Teaching assistants will hold the Q&A sessions.
- All course material will be posted on Moodle.

CONTENT: This is an introductory course in microeconomics. In the first part of the course, students are introduced to the benchmark of perfectly competitive markets. In the second part, we explore ways in which actual markets differ from this benchmark such as market power, externalities, public goods, and asymmetric information problems. Throughout we discuss the scope and role of government intervention in markets. This course serves three main purposes:
- to introduce students to basic microeconomic principles;
- to help students understand the business world through the lens of economic models;
- to develop students' skills in critical thinking and comprehension.

Tentative course schedule:

Week 1: What is microeconomics? What is a perfectly competitive market? Why is it a useful but unrealistic benchmark?

Week 2: What determines consumer demand?

Week 3: What determines producer supply?

Week 4: How are quantities and prices determined in equilibrium? How are the gains from competitive market exchanges shared between consumers and producers?

Week 5: Market power and oligopolies.

Week 6: Market power and monopolies (1), how do monopolies choose what price to charge?

MID-TERM TEST: November 14 (Thursday), 18.30 - 20.00 (Hörsäle 1, 6 and 14).

Week 7: Market power and monopolies (2), how should we regulate monopolies?

Week 8: Externalities. How does welfare change in a market where one agent's consumption has a positive or negative impact on others (e.g. pollution)?

Week 9: Public goods and redistribution. Why do markets sometimes lead to underprovision of certain types of goods (e.g. healthcare, defense, education)?

Week 10: Information frictions between consumers and firms (1). How can the lack of information available to consumers lead firms to obtain more market power?

CHRISTMAS BREAK

Week 11: Information frictions between consumers and firms (2). How can the lack of information available to consumers lead to market breakdown?

Week 12: Information frictions within organisations. Do firms' managers always maximise firms' profits?

FINAL EXAM: January 23 (Thursday), 13.15 - 14.45 (Hörsäle 1, 4 and 14).

The lecture takes place in class at OMP and is held in German.

i. Format:
There will be two lectures per week, as well as a Q&A session to discuss the weekly problem sets. Course materials are distributed through the Moodle platform.

ii. Content:
The course offer an introduction to microeconomics. In the first part, students are introduced to the ideal model of a perfectly competitive market. In the second part, we examine how real-world markets differ from this ideal, for example, due to market power, externalities, public goods, and asymmetric information problems. Finally, we discuss the role and scope of government intervention in markets. Basic mathematical knowledge is required (especially algebra, differential calculus, optimization with constraints).

iii. Objectives:
The course has the following learning objectives: (1) to introduce basic microeconomic principles, (2) to analyze the economic world using economic models, (3) to develop critical thinking.