2289.23 - Intermediate Microeconomics 2

2289.23

Intermediate Microeconomics 2

7.5

Pass grade in Mathematics B at the upper secondary level. Skills and knowledge from or equivalent to those taught in the courses Principles of Economics, Intermediate Microeconomics 1, Mathematics 1 and Mathematics 2 is an advantage.

The purpose of the course is to acquire the skills to read and understand economic journal papers and to use microeconomic theory and method when analysing questions in the field of economics.

This course analyses formal, mathematical models of microeconomic questions. The course emphasises independent problem-solving of microeconomic questions. While the course Intermediate Microeconomics 1 consisted of a basic treatment of economic models with perfect competiton, Intermediate Microeconomics 2 widens and nuances this treatment by analysing market failures stemming from market power, strategic interaction, externalities, public goods, or asymmetric information which by construction are excluded from models with perfect competition, and what can be done about these market failures. The analysis is based on the theoretical concepts and the mathematical models, that are presented in the course.

The material is presented in weekly lectures and tutorials. In the tutorials, the students present their solutions to assigned exercises.

After successfully compeleting the course, the student should be able to: • Analyse monopoly behaviour • Analyse strategic interaction with ‘normal form games’ and to find Nash-equilibria • Analyse strategis interaction with ‘strategic form games’) and find subgame perfect equilibria • Analyse firm behaviour in markets with oligopolistic competition using the models of Cournot, Bertrand ella Stackelberg • Analyse consumer and producer behaviour under uncertainty • Analyse consumer and producer behaviour, and market equilibria in factor markets • Analyse how externalities impact consumer and producer behaviour, and when and how government can mitigate market inefficiencies stemming from externalities • Analyse challenges with respect to production and use of public goods Analyse market situations with asymmetric information – including ‘hidden action’ and ‘hidden characteristics’ problems in markets

Three hours written exam without the aid of textbooks and notes. Students are required to pass a minimum of two assignments in order to attend the exam.

External

7-

TBA

Hans Ellefsen