Microeconomics

• Credit value: 30 credits at Level 7
• Tutors: Kenjiro Hori, Arup Daripa
• Assessment: a three-hour examination in January (80%) and two in-class tests (the higher of the two marks contributes 20%)

This module familiarises you with basic tools in microeconomic theory and enables you to apply these tools to solve problems in public policy. The lectures aim to promote the ability to think in a structured framework, and clarify the importance of formal arguments.

An important aim of the module is to demonstrate the art of formal modelling which requires simplifying a problem by identifying the key elements without oversimplifying and trivialising the issue.

By the end of the module, you should be able to:

• solve the optimisation problems faced by consumers and producers under certainty as well as uncertainty
• derive the general equilibrium of specific economies
• apply the basic solution concepts in game theory
• solve for optimal contracts under adverse selection and moral hazard
• solve for optimal bidding behaviour in standard auctions
• explain the effect of externalities and public goods.