The aim of the course is to introduce the fundamentals of microeconomic theory and provide a comprehensive foundation for understanding individual economic decision-making and market interactions. Having completed the course, students will be able to define core economic concepts, explain the behavior of households and firms under different market structures, evaluate market efficiency, and identify market failures alongside appropriate government interventions. Furthermore, students will gain insight into modern microeconomic topics, including behavioral anomalies, game theory, and information asymmetry.

Course Syllabus

1. Introduction to Microeconomic Thinking & Models

o Principles of economics, scarcity, trade-offs, opportunity cost, rational decision-making, role of economic models and empirical data.

2. Market Forces: Demand, Supply & Elasticity

o Market mechanisms, law of demand and supply, market equilibrium, price elasticity of demand and supply, income and cross-price elasticity.

3. Consumer Behavior & Behavioral Economics

o Utility theory, indifference curves, budget constraints, consumer equilibrium, introduction to behavioral economics and bounded rationality.

4. Production & Cost Structure

o Production functions in the short and long run, law of diminishing marginal returns, cost curves (FC, VC, TC, MC, AC), economies of scale.

5. Firms in Perfectly Competitive Markets

o Profit maximization rules, short-run and long-run supply curves, shutdown decisions, consumer and producer surplus, market efficiency.

6. Monopoly & Pricing Strategies

o Barriers to entry, profit maximization of a monopolist, deadweight loss, price discrimination, natural monopoly, public policy and regulation.

7. Oligopoly, Monopolistic Competition & Game Theory

o Product differentiation, excess capacity, strategic interaction, Prisoner’s Dilemma, Nash equilibrium, cartel behavior.

8. Markets for Factors of Production: Land & Capital

o Marginal revenue product, demand and supply of capital and land, interest rates, net present value (NPV), economic rent.

9. Labor Market & Modern Employment Trends

o Demand and supply of labor, wage determination, labor unions, minimum wage impacts, human capital, wage inequality and automation.

10. Risk, Uncertainty & Information Asymmetry

o Decision-making under risk, expected utility, risk aversion, adverse selection, moral hazard, principal-agent problem, market signaling.

11. Market Failures & Environmental Microeconomics

o Negative and positive externalities, Coase theorem, Pigouvian taxes, public goods, common resources, tragedy of the commons.

12. Income Inequality, Redistribution & Public Choice

o Measuring inequality (Lorenz curve, Gini coefficient), poverty, public choice theory, voting models, government failure.

Literature

Greenlaw, S. A., & Shapiro, D. (2021). Principles of microeconomics (3rd ed.). OpenStax. https://assets.openstax.org/oscms-prodcms/media/documents/principles-microeconomics-3e_-_WEB.pdf

Acemoglu, D., Laibson, D., & List, J. A. (2021). Microeconomics (3rd global ed.). Pearson.

Mankiw, N. G. (2023). Principles of microeconomics (10th ed.). Cengage Learning.

Evaluation & Completion Criteria

· Course Credit: Seminar attendance (min. 80%), active participation, seminar tests, and credit test.

· Examination: Course credit prerequisites met; written examination (exercises, essay, etc.).