Examination arrangement

Course content

1.Introduction to microeconomic analysis

2.Consumer adaptation

• Budgetary condition and consumer preference scheme
• Effect of price and revenue changes
• Demand functions and elasticities
• Offers of work

4. Market theory

• Perfect competition
• How taxes and subsidies affect market equilibrium
• Market equilibrium and efficiency

5. Imperfect competition

• Monopoly
• Price discrimination
• Various forms of oligopoly/duopoly
• Stackelberg model
• Games
• Other causes of imperfect competition
• Imperfect competition and efficiency

6. Market failure and public policy

• Common good
• External realities
• Common resources

Learning outcome

Knowledge:

You must be able to:

• Gain basic insight into the principles of microeconomic analysis and its applications in different markets.
• Gain knowledge about how companies and individuals face financial choices in a market economy.
• Know how the interaction between consumers and producers creates balance.
• Know how consumer demand is affected by prices and revenues.
• Have knowledge of how the company's supply and demand for input factors affect prices and income.
• Be able to show how the company's supply and its demand are affected by product and factor prices
• Know how the business community can utilize microeconomic knowledge

Skill

You must be able to:

• Describe how utility maximization can be used to divert demand for goods and services.
• Describe how the company's desire for maximum return or profit can be used to divert supply of goods and services in a market economy.
• Explain the difference between different market forms such as perfect competition, monopoly and oligopoly.
• Explain how prices and production volume are determined under different market conditions.
• Explain what is meant by efficiency in the economic sense, and make simple assessments of whether a market economy is efficient in the economic sense.
• Explain how different market interventions affect economic efficiency.
• Apply mathematical optimization of functions with one or more variables to basic economic optimization problems.
• Explain whether it is the producers or consumers who are charged a tax in a market.
• Apply knowledge from business economics in the analysis of, among other things, production theory and market economics
• Make visible the benefit the business community has of insight into microeconomics
• Understand the reasons for public intervention in the economy and analyze challenges related to the adjustments

General competence

You shall:

• Through this course develop a critical attitude to professional analysis.
• Stimulate to assess economic goals against other societal considerations.
• Be able to connect microeconomic theory to the individual business and sector
• Be able to link knowledge from other subjects in the bachelor's education such as business administration and marketing to the production of microeconomics

Learning methods and activities

Lectures and compulsory exercises (may include simulations/serious games)

Compulsory assignments

• Approved exercises

Further on evaluation

Re-sit of written exam in August. The re-sit exam can be given as an oral exam.

There will be mandatory assignments in this course that needs to be approved to get access to the final exam. Assignments will be due weekly/bi-weekly. Details about the mandatory assignments will be gived in the beginning of the semester. Students who have already passed the mandatory assignments from earlier on do not need to retake them on later exam attempts unless major changes in the subject have been made.

Supporting material allowed on exams: Approved calculator regarding NTNUs support material code B-D "specific basic calculator". Other calculators that are allowed in the course are: Casio FC-100V and Texas Instruments - BAII Plus

Recommended previous knowledge

Mathematics, Statistics

Managerial Economics 101 (AE101108 or similar)

Course materials

Mandatory:

Pindyck, Rubinfeld og Synnestvedt: Introduksjon til Mikroøkonomi, newest edition, chapter. 1-11, Pearson.

MyEconLab is included when you buy the book.

(The American version of the same book is recommended and can be used!)

Recommended:

Ringstad, Vidar: Samfunnsøkonomi og økonomisk politikk (siste utgave), Oslo. Cappelen Akademiske Forlag.

Credit reductions