To provide students with a thorough grounding in the basic principles of microeconomics and exposure to a range of applications of the theory. Students should develop an understanding of consumer and producer theory and how they can be used to solve problems. The module aims to provide students with an understanding of how markets work, including strategic behaviour of firms and the various models under which firms might behave. The module aims to provide students with the skills and techniques to analyse problems from a mathematical, graphical and intuitive perspective and to apply their knowledge to real world scenarios.
Principal Learning Outcomes
By the end of the module the student should have developed a solid grasp of the basic theoretical material and be able to demonstrate knowledge of important areas of application, show understanding of core concepts in consumer and producer theory.
Explain a variety of concepts using different approaches, including those involving mathematical, graphical and intuitive analysis.
Construct models of both consumer and producer behaviour and understand the implications and understand the way in which economic models are used to analyse problems and the limitations of them.
The module will typically cover the following topics:
Supply and Demand. Supply; demand; market equilibrium; equilibrium shocks; government intervention; supply and demand elasticities. Consumer theory. Preferences; utility; budget constraints; individual demand; substitution effects; income effects; Applications, behavioural economics and critiques of rational choice framework Production. Technology; isoquants; marginal rate of technical substitution; marginal products; cost curves; long and short run; returns to scale; profit maximisation; cost minimisation; cost curves; supply curves. Competition. Profit maximisation; short run; long run; market equilibrium; consumer welfare; producer welfare; applications. Imperfect Competition; Models of Oligopoly: Cournot Model; Stackelberg Model; Comparison of Collusive, Cournot, Stackelberg, and Competitive Equilibria; Bertrand Model; Game Theory.
An introduction to terminology and Nash equilibria. General Equilibrium Models and the Welfare Theorems; Externalities, public goods, asymmetric information – moral hazard and adverse selection.
- Core Module
- L100 - Year 1, L116 - Year 1
- Pre or Co-requisites
- A-level Mathematics or the equivalent
- Pre-requisite for
- This module is restricted to L100 and L116 students
- Part-year Availability for Visiting Students
- Available in the Spring term only (1 x test - 12 CATS) and in the Autumn and Spring terms together (2 x tests - 24 CATS)
- Assessment Method
- Coursework (20%) + 3 hour exam (80%)
- Coursework Details
- Two 50-minute tests (worth 10% each)
- Exam Timing
Time Allowed: 3 Hours.
Answer BOTH questions in Section A (40 marks total), and THREE questions in Section B (20 marks each). Answer Section A questions in one booklet and Section B questions in a separate booklet.
Approved pocket calculators are allowed.
Read carefully the instructions on the answer book provided and make sure that the particulars required are entered on each answer book. If you answer more questions than are required and do not indicate which answers should be ignored, we will mark the requisite number of answers in the order in which they appear in the answer book(s): answers beyond that number will not be considered.
Previous exam papers can be found in the University’s past papers archive. Please note that previous exam papers may not have operated under the same exam rubric or assessment weightings as those for the current academic year. The content of past papers may also be different.