ØASØK4100 Microeconomics Course description

Microeconomics takes as its starting point the individual consumer and the individual company to explain how an advanced market economy, such as the Norwegian one, works. Knowledge of microeconomic theory is essential to be able to analyze questions about regulation of markets, design of the tax system, the necessity of public measures, the importance of uncertainty for decisions etc.

In the first part of the course, we go through theory for consumers' choice of work, leisure, savings and consumption composition. We also look at how uncertainty affects these choices. Furthermore, we take up the theory of companies' behavior. Here, the focus is on the companies' choice of input factors, production volume and price. Finally, the theories for consumer and business adaptation are combined into a theory of markets. Here, we study the market forms of perfect competition and monopolistic competition.

In the second part of the course, we analyze public goods, the need to collect taxes as well as the socio-economic costs of collecting taxes. We also study positive and negative externalities, and briefly go into how the authorities can correct for these in order to improve the functioning of the market. We also look at economies of scale that give rise to falling average costs, and how so-called natural monopolies can be regulated.

In the last part of the course, we apply the theory to cost-benefit analysis. We go through the principles of benefit-cost-benefit analysis, and the students themselves then carry out a complete analysis of a public initiative.

Language of instruction is English.

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After completing the course, the student should have the following overall learning outcomes defined in terms of knowledge, skills and general competence:

Knowledge

The student has in-depth knowledge of

• socio-economic theory of utility maximization and profit maximization
• socio-economic theory of markets
• socio-economic theory of taxation and other public interventions in markets
• cost-benefit analysis

Skills

The student ​

• has an analytical approach to solving problems
• can use mathematics to systematize and organize knowledge

General competence

The student can

• analyze demand and supply in different markets
• carry out a cost-benefit analysis
• participate in socio-economic discussions about public regulations and measures

The teaching is given as a combination of regular lectures and exercises. The exercises are examples of exam questions.

The following coursework requirements must have been approved for the student to take the exam:

• Coursework 1: Written submission (5-10 pages) which is carried out in groups of two or individually.

All required coursework must be completed and approved by the given deadline for the student to take the exam. If the coursework requirements have not been approved, the student will be given one opportunity to submit an improved version by a given deadline.

The exam in the course is a supervised exam of 4 hours.

The following aids are permitted:

• Calculator (see regulations for the use of calculators in the programme description)
• One dictionary (either first language-English/English-first language or English/English)

Grade scale A – F

The exam papers are assessed by one internal and one external examiner.

At least 25% of the exam papers will be assessed by two examiners. The grades awarded for the papers assessed by two examiners form the basis for determining the level for all the exam papers.

Jacopo Bizzotto