Syllabus academic year 2011/2012
(Created 2011-09-01.)
MICROECONOMIC ANALYSISEXTF50
Credits: 7,5. Grading scale: TH. Cycle: G2 (First Cycle). Main field: Technology. Language of instruction: The course will be given in Swedish. EXTF50 overlaps following cours/es: NEKB21, NEKG21 and TEK135. Optional for: F4, F4fm, I4, Pi4, Pi4fm. Course coordinator: Kristian Bolin, kristian.bolin@nek.lu.se, Department of Economics. Prerequisites: Introductory Microeconomics (EXTA40, TEK116, TEK15 or VFT120). Assessment: Tuition consists of lectures and supervised exercises. Written exams take place at the end of the course. There will be further opportunities for examination close to this date. The course also contains two optional home exercises, which will be graded and the marks carried forward to examinations taken the same term. Home page: http://www.nek.lu.se/GU/GUB.asp.

Aim
The aim of the course is to provide deepened insights into microeconomic theory and its applications.

Knowledge and understanding
For a passing grade the student must

· understand and be able to describe the underlying principles guiding optimal individual consumption decisions,

· understand and be able to describe the underlying principles guiding optimal individual consumption decisions under uncertainty,

· understand and be able to describe the underlying principles guiding the optimal production decisions by firms in both the short run and the long run,

· understand and be able to describe the underlying principles behind general equilibrium in an exchange economy,

· understand the basic problems faced by a monopolist in terms of pricing and price discrimination,

· understand simple instances of quantity competition (the Cournot model).

Skills and abilities
For a passing grade the student must

have the ability to independently:

· formulate and solve the utility maximisation and expenditure minimisation problems faced by an individual,

· formulate and solve the cost minimisation and profit maximisation problems faced by a firm,

· analyse the basic problems faced by a monopolist in terms of pricing and price discrimination,

analyse simple instances of quantity competition (the Cournot model).

Judgement and approach
For a passing grade the student must

Students shall be able to acquire further knowledge in the area with little guidance or support.

Contents
The course deals primarily with economic decision making concerning consumption and production. The course starts with a treatment of the underlying principles that guide an individual's optimal consumption decisions under both certainty and uncertainty. This treatment leads to the utility maximisation and expenditure minimisation problems faced by an individual which, in turn, determine individual demand. Next, there is a treatment of the underlying principles guiding the optimal production decisions by firms in both the short run and the long run. This treatment leads to the cost minimisation and profit maximisation problems faced by a firm which, in turn, determine firm supply. There is also a treatment of general equilibrium in a simple exchange economy, and a treatment of the problems faced by a monopolist in terms of pricing and bundling ("price discrimination"). The course is concluded by an extension of the monopolist's problem to the Cournot model.

Literature
Varian, Hal (2009): Intermediate Microeconomics, a modern approach, eighth edition
Supplementary material
Recommended literature: Andersson, Tommy (2007): Föreläsningsanteckningar till Mikroekonomisk analys B, mimeo