Syllabus academic year 2008/2009
(Created 2008-07-17.)

Higher education credits: 6. Grading scale: TH. Level: G1 (First level). Language of instruction: The course will be given in Swedish. EXTA40 overlap following cours/es: GEMA35, TEK115 och TEK116. Compulsory for: I2, Pi2. Course coordinator: Erik Jonasson, Nationalekonomiska inst. Assessment: The exam consists of a written exam (80%), internet-based quizzes (12%) and a home assignment (8%). Grading is according to the LTH scale (failed, 3, 4, 5). 5: 84–100%, 4: 66–83%, 3: 50–65%, U: 0–49%. Home page:

The aim of the course is to give the student a well balanced overview of microeconomic theory and its central issues and problems and a sound knowledge base for further studies in economics.

In particular, the course aims at creating an understanding of the functioning of markets, of how producers and consumers make their decisions and of how economic agents gains or loses from government intervention (regulations, taxes, subsidies etc.) of markets.

Emphasis is placed on the part of microeconomic theory that can be assumed to be of particular interest so students in the programmes for industrial economics and technical mathematics: production theory and the behavious of producers in different market structures (industrial organisation).

Knowledge and understanding
For a passing grade the student must

After the course, students shall have an understanding of:

the forces determining prices on markets,

how government intervention in a market affects the markets and its agents,

what determines the price sensitivity of agents and the consequences of various degrees of price sensitivity,

the fundamental microeconomic theory of production and the behaviour of producers in different forms of competition,

the fundamental microeconomic theory of consumer behaivour and the fundamental theoay of externalities and public goods.

Skills and abilities
For a passing grade the student must

After the course, students shall be able to apply basic analytical tools to:

analyse how supply, demand and price on a market are affected by external factors,

estimate the price sensitivity of market agents and anslyse economic effects based on the different price sensitivities of different agents,

analyse and account for winners and losers on a market as a result of government intervention,

based on microeconomic theory account for the optimal behavious of producers in various market structures,

identify markets with externalities and account for solutions to correct those externalities,

discuss and account for welfare effects of regulations and market failure.

Judgement and approach
For a passing grade the student must

After the course, students shall understand the difference between posotive and normative statements. Students shall also develop the skill to judge economic statements based on microeconomic theory and assess to what extent they are consistent with the implications of the theory.

The course introduces microeconomic theory and is divided into four parts. The first part consists of the theory of supply, demand and equilbrium on a market and is the basis of studies in economics. The second part consists of consumer theory, i.e. the theory of the economic behaviour and decision-making of individuals. The third part consists of the theory of production and deals with the actions of a firm under various market structures (perfect competition, monopoly, oligopoly and monopolistic competition). The fourth and final part consists of two forms of market failure externalities and public goods. Here, it is analysed how society deals with the production and distribution of goods where the market cannot achieve the optimal solution on its own.

The course rests on three pillars: lectures, the course literature and exercises. For each part, there are exercises and an exercise session. The exercises both fulfill the pedagogical function of promoting an understanding of the theory and allows the student to practice the application of the analytical tools.

In the course, there are internet-based quizzes. The tests aims to provide the student with a diagnostic tool to assess his or her understanding and is also intended to promote studying on a regular basis during the course.

As a supplement to the exercises, there is a home assignment. The purpose of the home assignment is for the student to apply a certain part of the theory on a topical economic phenomenon in a deeper and more rigorous manner.

Paul Krugman & Robin Wells (2005), Microeconomics. Worth Publishers. ISBN 9780716762775
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