Microeconomics

This subject has the following teaching availabilities in 2015:

Estimated total time commitment of 120 hours per semester

Plus one of:

For the purposes of considering request for Reasonable Adjustments under the Disability Standards for Education (Cwth 2005), and Student Support and Engagement Policy, academic requirements for this subject are articulated in the Subject Overview, Learning Outcomes, Assessment and Generic Skills sections of this entry.

It is University policy to take all reasonable steps to minimise the impact of disability upon academic study, and reasonable adjustments will be made to enhance a student's participation in the University's programs. Students who feel their disability may impact on meeting the requirements of this subject are encouraged to discuss this matter with a Faculty Student Adviser and Student Equity and Disability Support: http://services.unimelb.edu.au/disability

The subject is an advanced treatment of the Economics of Information and Game Theory. Students study the foundations of consumer and producer theory. Game theoretic interpretations of equilibrium are introduced including those appropriate for asymmetric situations. The concept of a Bayesian Nash equilibrium is applied to models of moral hazard and adverse selection and provides an introduction to auction theory and mechanism design.

On successful completion of this subject students will be able to:

• Understand and use the mathematical concepts that are required for graduate microeconomics;
• Understand and use consumer theory, producer theory, the competitive model and comparative statics;
• Understand and use expected utility theory;
• Understand and use the equilibrium concepts for static games under complete and incomplete information;
• Understand and use the concept and models of moral hazard;
• Understand and use the concept of adverse selection and markets with adverse selection; and
• Understand and use basic aspects of the theory of incentives, auctions and mechanism design.

• 3-hour end-of-semester examination, due during the examination period (60%);
• One 1.5 hour mid-semester test (due mid-semester (20%); and
• Four class assignments totalling no more than 3000 words, due every 3rd week (20%).

You will be advised of prescribed texts by your lecturer.

This subject is not available as a breadth subject.

On successful completion of this subject, students will have improved the following generic skills:

• Evaluation of ideas, views and evidence;
• Synthesis of ideas, views and evidence;
• Critical thinking;
• Application of theory to economic policy and business decision making; and
• Problem solving skills.