The module Microeconomic Theory is a compulsory module for all Economics students on the single and joint honours degree programmes.  Its role is to build upon the analysis developed in the year 1 module Microeconomics and to provide the theoretical basis upon which the option modules in years 2 and 3 can develop.  The function of the module in terms of progression varies across the degree programmes. For Economics it provides the intermediate step towards the advanced microeconomic theory of year 3. For Business Economics and Money Banking & Finance it provides the foundations for the specialist core modules of those programmes.

The aim of the module is to provide second year undergraduates studying economics as a single or a joint honours degree with an understanding of key intermediate microeconomic concepts and their application.

A    Knowledge and Understanding:

• demonstrate an understanding of the key areas of microeconomics: consumer theory, theories of the firm and market structure, general equilibrium analysis, basic welfare economics and various forms of market failure.

B    Intellectual Skills: 

• analyse the operations of market economies.
• evaluate alternative theoretical models.

C    Discipline Specific Skills

Demonstrate an ability to:

• identify appropriate theoretical models and associated analytical techniques to answer specific problems in microeconomics.
• use certain mathematical techniques to address specific problems in microeconomics.

D    Transferable Skills: 

Demonstrate an ability to:

• manipulate mathematical equations and solve numerical problems.
• understand both theoretical and real-world examples.
• develop presentational skills in classes.
• apply logic and reason in addressing problems and issues.

The formal timetabled components of the module comprise 33 hours of lectures and 11 hours of seminars. The lecture programme is supported by a module outline which details the reading to be completed by students for each section of the module. Students receive lecture handouts from time to time and a regular series of fortnightly seminar worksheets which are integrated with the lectures, and which encourage students to utilise the knowledge gained, both from lectures and from their associated reading. The questions on the seminar worksheets test student understanding of key theoretical microeconomic concepts and their ability to apply those concepts in addressing specific problems. In this way students develop their analytical and decision-making skills in order to help them attain the learning outcomes for this module. Students are supported throughout the module through the provision of fortnightly seminars, the posting of worksheet answers on the electronic noticeboard and have access to the lecturers through advertised weekly ‘office hours’ and student-lecturer e-mail contact.

Indicative study hours:   200

The Autumn Semester assessment contains a range of questions relating to the material taught in the section of the module dealing with household/consumer choice. The paper is divided into two sections. The first section assesses the ability of students to judge whether statements made are true or false and their ability to explain why, using appropriate microeconomic concepts. Questions require a combination of written answers accompanied by appropriate diagrammatic or mathematical reasoning. These true/false questions test students’ development of intellectual, communication, numeric and reasoning skills, as well as subject-specific knowledge. The second section of the assessment does likewise but, through a compulsory question, more specifically assesses their ability to understand a key mathematical technique, namely that of Lagrangean functions.

The Spring Semester examination follows a similar format to that of the Autumn Semester examination, but is longer since it deals with the section of the module, that on firms, markets and efficiency, which comprises approximately two-thirds of the module teaching allocation. The examination has three sections: a true/false section; a mathematical section; and a longer answer section. The addition of the third section enables a formal assessment to be made of the students to write longer answers and/or to show an understanding of linked analytical topics.

Informal and semi-informal assessment is provided through seminar worksheet questions which are taken in by tutors for scrutiny. A variety of class, examination-standard, questions are designed to stimulate independent learning and to provide an ongoing mechanism for assessing the extent to which students are meeting the module’s learning outcomes. Students are encouraged throughout the module to consult those members of staff who conduct their seminars, the lecturers and the module leader, with any queries they may have about any aspects of the module.

The syllabus is divided into two sections: (i) Household/consumer choice (approximately one-third of the module teaching allocation): basic consumer theory – indifference curve analysis; compensating and equivalent variations; extensions of the basic consumer model – income/leisure trade-off and the borrowing/lending decision; (ii) Firms, markets and efficiency (approximately two-thirds of the module teaching allocation) – production and cost theory; the competitive model; general equilibrium analysis; market power; market failure and missing markets.

W Morgan, M L Katz and H S Rosen Microeconomics 2^nd European ed (2009)

H R Varian Intermediate Microeconomics 8^th ed (Norton, 2000)

H Gravelle and R Rees Microeconomics 3^rd ed (FT Prentice-Hall, 2004)