1 / 22

Lecture # 01 Introduction Lecturer: Martin Paredes

Lecture # 01 Introduction Lecturer: Martin Paredes. Outline. Definition of Microeconomics Who Should Study Microeconomics? Course Information Microeconomic Modeling Elements of models Solving the models. Definition of Microeconomics.

shakti
Download Presentation

Lecture # 01 Introduction Lecturer: Martin Paredes

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Lecture # 01 Introduction Lecturer: Martin Paredes

  2. Outline • Definition of Microeconomics • Who Should Study Microeconomics? • Course Information • Microeconomic Modeling • Elements of models • Solving the models

  3. Definition of Microeconomics • Microeconomics studies economic behavior of individual economic decision-makers • E.g.: consumers, workers, firms, managers. • This study involves: • The behavior of these economic agents on their own • The way their behavior interacts to form larger units, such as markets.

  4. Who Should Study Microeconomics? Example: The Railroad Industry in the US 74.9% of all freight, 1929 39.8% of all freight, 1970 1970’s: poor profits, bankruptcies, inability to invest 1980’s: loosened regulation and union rules improved profitability

  5. Who Should Study Microeconomics? • Analysis of this issue requires Microeconomic tools. • Who are the actors who need to know something about Microeconomics? • Managers • Union Leaders / Workers • Lenders • Policy Makers • …and beyond!

  6. Course Information • Main (required) textbook: David Besanko & Ronald Braeutigam, Microeconomics John Wiley & Sons, 2nd Ed., 2005. • Ancillaries: • Study Guide • APLIA: Online resources and problem sets.

  7. Course Information • Alternative textbooks (“at your own risk”) • B. Curtis Eaton, Diane Eaton, & Douglas Allen, Microeconomics: Theory With Applications, Prentice Hall, 6th Edition, 2004. • Robert Pyndick & Daniel Rubinfeld, Microeconomics Prentice Hall, 6th Edition, 2005. • Andrew Schotter, Microeconomics: a Modern Approach, Addison Wesley, 3rd Edition, 2001. • Hal Varian, Intermediate Microeconomics: a Modern Approach, W.W. Norton, 6th Edition, 2006.

  8. Course Information • Course Website: http://www.tcd.ie/Economics/staff/paredesm/~EC2010

  9. Course Information • Lecture Meetings • Tuesdays from 10:00 AM to 11:00 AM • Wednesdays from 5:00 PM to 6:00 PM • Location: Arts building, room 1008 • Lecture from January 9th to be rescheduled after Reading Week

  10. Course Information • Class Meetings

  11. Course Information • Office Hours - Martin Paredes: • Mondays from 3:00 PM to 4:00 PM • Thursdays from 11:30 AM to 12:30 PM • Office: Arts Building, room 3012

  12. Course Information • Office Hours – Teaching Assistants: • Marta Zieba: Mondays, 11:00 AM to 1:00 PM • Padraig Flynn: Fridays, 10:00 AM to 12:00 PM • Office: Arts Building, room 3002

  13. Course Information • Course Assessment: Two Examinations. • Hilary Term Test: 20% • Final Exam: 60% • Several homeworks to be assigned during the semester on a weekly basis

  14. Course Information • The Final Exam includes both Macro & Micro in equal proportions • Five questions in Micro: • One compulsory question • Answer two out of the remaining four. • Five questions in Macro: • One compulsory question • Answer two out of the remaining four. • Answer a total of 6 questions

  15. Course Outline 1. Introduction Ch. 1. 2. Demand and Supply Ch. 2. 3. Consumer Theory Ch. 3, 4 & 5. 4. Production and Cost Theory Ch. 6, 7 & 8.

  16. Course Outline 5. Perfect Competition Ch. 9 & 10. 6. Monopoly Ch. 11 & 12. 7. Imperfect Competition, Game Theory and Strategic Behavior Ch. 13 & 14 8. Risk and Information Ch. 15 9. General Equilibrium Theory Ch. 16 10. Externalities and Public Goods Ch. 17

  17. Microeconomic Modeling • Models are simplifications…like maps • Resemble reality • Understandable • Appropriate scale (not all details)

  18. Example: World-wide market for unprocessed coffee beans, December, 1997 Price per pound Supply (P,W) Quantity, pounds

  19. Example: World-wide market for unprocessed coffee beans, December, 1997 Price per pound Supply (P,W) Demand (P,I) Quantity, pounds

  20. Microeconomic Modeling • Elements of Models • Need to specify: • Choices/Alternatives • Assumptions

  21. Exogenous and Endogenous Variables • Definition: • Variables that have values that are taken as given in the analysis are exogenous variables. • Variables that have values that are determined as a result of the workings of the model are endogenous variables.

  22. Opportunity Cost Definition: The Opportunity Cost of a resource is the value of that resource in its best alternative use. Example: €100K in facilities yields €800K in revenue €100K in R&D yields €1M revenue  Opportunity cost of investing in facilities = €1M  Opportunity cost if investing in R&D = €800K Note: Opportunity cost depends on how we specify alternatives.

More Related