Microeconomics

This subject is not offered in 2014.

Both of:

None

Please refer to Prerequisites and Corequisites. Students proceeding to an honours degree in economics are required to take this subject in the third year of their course and the subject has been designed accordingly. There are, however, no restrictions on entry to the subject which all third year economics students are welcome to take.

None

For the purposes of considering requests for Reasonable Adjustments under the Disability Standards for Education (Cwth 2005), and Students Experiencing Academic Disadvantage Policy, academic requirements for this subject are articulated in the Subject Description, Subject Objectives, Generic Skills and Assessment Requirements for this entry.

The University is dedicated to provide support to those with special requirements. Further details on the disability support scheme can be found at the Disability Liaison Unit website: http://www.services.unimelb.edu.au/disability/

The objectives of the subject are to introduce new techniques of microeconomic analysis; and to study applications of microeconomic theory to a range of situations involving behaviour of consumers and firms, and market interaction. Topics include game theory and oligopoly, economics of information, behaviour under uncertainty and general equilibrium analysis.

• Distinguish between positive and normative issues;
• Appreciate the purpose of models and the inevitable limitation of every model;
• Apply formal models to analyse positive problems and answer normative questions;
• Identify the conditions under which markets can be expected to work satisfactorily, and the conditions under which they cannot;
• Apply thorough economic reasoning to shed light on ongoing policy debates;
• Identify and analyse problems that arise from imperfect information including the phenomenon of adverse selection and the principle-agent problem;
• Apply game theory techniques to analyse situations with strategic interactions, such as competition between firms with market power, provision of public goods, or between generals at war;
• Apply advanced economic tools and reasoning to inform policy debates;
• Identify the properties of standard competitive markets (consumer theory, producer theory, welfare theorems, decision making under uncertainty);
• Understand Coase Theorem and its implications, which include transaction costs economics, for environmental policy, and market design.

A 2-hour end-of-semester examination (80%) and class assignments totalling approximately 2000 words (20%).

Microeconomics with Calculus by Jeffrey M. Perloff, 2 nd ed (2011), Pearson Education.

This subject potentially can be taken as a breadth subject component for the following courses:

• Bachelor of Arts
• Bachelor of Biomedicine
• Bachelor of Environments
• Bachelor of Music
• Bachelor of Science
• Bachelor of Engineering

You should visit learn more about breadth subjects and read the breadth requirements for your degree, and should discuss your choice with your student adviser, before deciding on your subjects.

• High level of development: Economic reasoning; appreciation of the use of models; purpose and limitations of models; evaluate models; use models to analyse positive questions and to make normative evaluation of alternative policies;

• Moderate level of development: Mathematical analysis, written communication; critical thinking; problem solving; and receptiveness to alternative ideas.

• Some level of development: Independent thinking; solving new problems; constructing a coherent argument; apply economic reasoning to a variety of practical problems.

Students proceeding to an honours degree in economics are required to take this subject in the third year of their course and the subject has been designed accordingly. There are, however, no restrictions on entry to the subject which all third year economics students are welcome to take.