Microeconomics studies the behaviour of individual economic agents (firms and consumers) and their interaction in the market place, introducing students to the basic analytical tools, reasoning and language of economics. This course approaches the topic in two ways. It provides an introductory overview of the main pillars of microeconomic theory: the price mechanism and decision-making; demand and supply; the operation of markets; the theory of the firm; monopoly and competition; efficiency and the role of government. In parallel, it explores how applicable these theories are, via project work on markets for specific products and services.
Titular Professors
No previous knowledge required
The intention of this subject is for the student to know and master the basic concepts that govern economics and develop a critical capacity that allows them to analyze the events that occur in the everyday economic world.
Introduction: This session will provide an overview of the course structure, objectives, and key themes that will be explored throughout the semester.
TOPIC 1: What is economics?
What is economics? What are the differences between micro-and- macroeconomics? Circular flow diagram and markets. Project Set-up (Groups Set-Up)
TOPIC 2: The market forces of supply and demand.
The price mechanism, the interaction of demand and supply, and the equilibrium price that clears the market.
TOPIC 3: Elasticity and its applications.
The sensitivity of supply and demand to changes in prices and income and the effect on total revenue and profit. How elasticity defines different types of goods.
TOPIC 4: Consumers, producers and the efficiency of markets.
Measuring efficiency and welfare: consumer surplus, producer surplus, deadweight loss and market failure.
TOPIC 5: Supply, demand, and government policies.
How price regulation and taxes affect market outcomes.
TOPIC 6: Public goods and Externalities.
The differences between private and social costs and benefits. Justification for government intervention in the markets. Pigovian taxes.
TOPIC 7: The costs of production
The difference between economic and accounting profit. Total cost, average cost and marginal cost. Economies and diseconomies of scale.
TOPIC 8: Firms in competitive markets, monopolies, oligopolies and monopolistic competition
The characteristics of perfect competition: free entry, no product differentiation, price takers and zero economic profits. The case of a single firm or very few firms. Barriers to entry, economic profits and deadweight loss, government regulation. Collusion and price-fixing.
Lectures will follow closely the structure and content set out in the main textbook ECONOMICS by Mankiw, N. Gregory and Taylor, Mark P. Students are expected to come to class prepared, having completed a first approximation to each topic. Lecture slides will be available to download after the class, and online videos will also be referenced for class preparation and review. Good preparation will generate more time for interactive class sessions and project work.
Students will form project groups (of FOUR or SIX people) at the beginning of the course. Each group will choose a market sector (for any product or service) which will be the focus of weekly project work and a final presentation. The project will progressively construct a comprehensive profile of the chosen market in one or two countries (at the professor’s discretion), incorporating what we have learned about each topic into the analysis. The grade for this project will be based on both weekly work and the final presentation.
Weekly homework quizzes will also be assigned to test students’ knowledge of the material covered in the lectures and should help students to develop a regular study routine and sit the exams with confidence.
The main methodologies used for this course are:
MD.0 Class Lecture
MD.1 Problem-oriented classes and exercises
MD.4 Seminars
MD.6 Project-based learning
This course consists of the following evaluation activities:
Class Participation (moderately significant assessment activity) / 10% of the final grade. The maximum percentage of the grade is obtained when the student attends all or almost all the scheduled sessions. In addition to attendance, punctuality and the student's participation in class will be taken into account, either by answering the questions posed by the teacher or by asking relevant questions and/or engaging in discussions with other classmates whenever the session allows it. Finally, the student's participation in class during group activities will also be considered.
Homework completion (moderately significant assessment activity) / 10% of the final grade. This activity not only assesses that the exercises, readings, case studies, etc., are being completed but also that at the end the knowledge explained in the classroom is understood and allows the student to advance positively throughout the course. Homework assignments will consist of quizzes (multiple choice questions), required readings, and practical cases.
Market project (considerably significant assessment activity) / 20% of the final grade. Students will work on a semester-long project that must be completed in groups and submitted through a scheduled task on the eStudy platform. All students will be required to prepare to present the project in the final week of December and to answer questions based on this presentation. More specific guidelines on the content of this evaluation activity will be provided in class.
Midterm exam (highly significant assessment activity) / 30% of the final grade. The midterm exam will consist of a part with multiple-choice questions and another part with long-answer questions where students will have to answer on topics and/or issues worked throughout the course. The exam will not allow students to consult class materials or notes.
Final examination (highly significant assessment activity) / 30% of the final grade. The final exam will also consist of a part with multiple-choice questions and another part with long-answer questions where students will have to answer on topics and issues worked on throughout the course. This exam will evaluate the students on any topic worked on during the course, and therefore may question the students again on issues worked on and asked in the midterm exam. This exam does not allow students to consult class materials or notes
Retake policy: To pass the course, students must complete all components. Failure to attempt any component will result in an automatic fail (grade 4) and require retaking the course the following academic year. Students who fail the market project component will automatically fail the course.
This course consists of the following evaluation activities:
Class Participation (moderately significant assessment activity) / 10% of the final grade. The maximum percentage of the grade is obtained when the student attends all or almost all the scheduled sessions. In addition to attendance, punctuality and the student's participation in class will be taken into account, either by answering the questions posed by the teacher or by asking relevant questions and/or engaging in discussions with other classmates whenever the session allows it. Finally, the student's participation in class during group activities will also be considered.
Homework completion (moderately significant assessment activity) / 10% of the final grade. This activity not only assesses that the exercises, readings, case studies, etc., are being completed but also that at the end the knowledge explained in the classroom is understood and allows the student to advance positively throughout the course. Homework assignments will consist of quizzes (multiple choice questions), required readings, and practical cases.
Market project (considerably significant assessment activity) / 20% of the final grade. Students will work on a semester-long project that must be completed in groups and submitted through a scheduled task on the eStudy platform. All students will be required to prepare to present the project in the final week of December and to answer questions based on this presentation. More specific guidelines on the content of this evaluation activity will be provided in class.
Midterm exam (highly significant assessment activity) / 30% of the final grade. The midterm exam will consist of a part with multiple-choice questions and another part with long-answer questions where students will have to answer on topics and/or issues worked throughout the course. The exam will not allow students to consult class materials or notes.
Final examination (highly significant assessment activity) / 30% of the final grade. The final exam will also consist of a part with multiple-choice questions and another part with long-answer questions where students will have to answer on topics and issues worked on throughout the course. This exam will evaluate the students on any topic worked on during the course, and therefore may question the students again on issues worked on and asked in the midterm exam. This exam does not allow students to consult class materials or notes
Retake policy: To pass the course, students must complete all components. Failure to attempt any component will result in an automatic fail (grade 4) and require retaking the course the following academic year. Students who fail the market project component will automatically fail the course.
Mankiw, N. G., & Taylor, M. P. (2020). ECONOMICS. Cengage Learning EMEA.
Begg, D., Dornbush, R. & Fisher, S., ECONOMICS, Ed. Mc Graw Hill. Pindyck, Robert S., Rubinfeld, Daniel L., MICROECONOMICS. Ed. Prentice Hall. Salvatore, Dominick, MICROECONOMICS, Ed. Mc Graw Hill (Schaum’s outlines series).