Microeconomics for Economic Policy 1.

Course Description: 

Microeconomics studies how individual market participants, like households and firms, make their
choices from the alternatives available to them. It also studies how such choices interact in the
market to determine prices and resource allocations. A thorough understanding of microeconomics
will be useful for any economic course students will take in the future and will provide an invaluable
analytical framework for addressing a number of economically-relevant questions. Examples
of such questions are the following: how do consumers make their choices? how do firms set
wages for their employees? how do firms set prices for their products?
The course Microeconomics for Economic Policy 1 is devoted to the study of consumer and
producer theory and it will illustrate the ideal circumstances under which the market solves the
allocation problem and in which sense.

Learning Outcomes: 

Learning Outcomes
Successful completion of the course enables students to:
• understand and formalize the optimizing behavior of market participants;
• understand and formalize how interaction among market participants generates market outcomes
under perfect competition;
• understand and formalize the notion of perfectly competitive equilibrium;
• understand under what assumptions markets are efficient;


A student’s grade in this course will be a weighted average of his/her performance on the homework
assignments and the exams.
For the students enrolled in the MA in Global Economic Relations, the weights are as follows:
• Homework assignments: 25%;
• Exam: 75%.
The students enrolled in the MA in Economic Policy in Global Markets are also required to take
Microeconomics for Economic Policy 2 and will receive a single grade, which will be a weighted
average of their performance in both courses. In particular, the weights are as follows:
• Homework assignments: 25%;
• Exam part 1: 35%;
• Exam part 2: 40%.
The number of homework assignments is yet to be determined. The assignments will be available
on the course website. Students are encouraged to work in groups. Solutions to the homework
assignments must be handed in to the teaching assistant (or uploaded to the course website)
before the seminar and will be graded. During the seminars, the solutions will be presented.
The exam will be closed-book and students cannot bring any personal notes. The exam will
consist of both theoretical questions and exercises.
Active class participation is strongly encouraged.


Knowledge of basic calculus is not a strict requirement, although it would be tremendously helpful.
Because of the crucial role of marginal reasoning in microeconomics, during the course we will
often make use of the tools of differential calculus.

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