114-0500/02 – Microeconomics A (MIC A)
| Gurantor department | Department of Economics | Credits | 6 |
| Subject guarantor | doc. Ing. Martin Hodula, Ph.D. | Subject version guarantor | prof. Dr. Ing. Jan Libich |
| Study level | undergraduate or graduate | Requirement | Compulsory |
| Year | 1 | Semester | winter |
| | Study language | English |
| Year of introduction | 2012/2013 | Year of cancellation | 2020/2021 |
| Intended for the faculties | EKF | Intended for study types | Bachelor |
Subject aims expressed by acquired skills and competences
The aim of the course: students are able to:
- describe the basic economic cathegories,
- think in independent and creative way about economic problems,
- explain the behaviour of consumers, households and firms
- understand, how the product markets and the labour and capital market work.
- analyze causes and consequences of market failures and to conceive the microeconomic role of the government.
Teaching methods
Lectures
Individual consultations
Tutorials
Summary
The aim of the subject is to make the basis for students’ independent creative economic thinking. The main emphasis is laid on the behaviour of consumers, households, firms and government. Attention is also paid to the labour market and capital market.
Compulsory literature:
Recommended literature:
Way of continuous check of knowledge in the course of semester
Student will get a credit after writing compulsory tests with a minimum assessment 18 points (up to 35 points).
After that follows the written exam with a minimum 26 points from the maximum 65 points.
Student can pass out the subject with a minimum 51 points from the total 100 points.
E-learning
Other requirements
active participation in seminars, study of recommended literature
Prerequisities
Subject has no prerequisities.
Co-requisities
Subject has no co-requisities.
Subject syllabus:
1. Introduction to economics.
• The conception of economics as the science, its aim and methods.
• The origin and the genesis of economics.
• Positive and normative economics.
• The place of economics in the system of economic disciplines.
• Main streams of contemporary economic thought.
2. Economic backgrounds and connections of the production.
• Needs and resources. The production and consumption.
• Production factors and their scarcity. Production factors’ valuing.
• The concept of rationality in economics. Opportunity costs.
• The physical and institutional production possibility frontier – static and dynamic point of view.
3. Money.
• Division of labour and specialization.
• The necessity of the exchange. Barter and the formation of money.
• The money definition and their forms.
• Money functions.
4. Market and market mechanism.
• Basic market elements – supply, demand and price.
• The logic and mechanics of the market mechanism.
• Factors determining the demand and demand quantity. The law of diminishing demand and its interpretation.
• Factors determining the supply and supply quantity.
• The process of determining the equilibrium market price.
• Market failure.
• The role of the government in the market economy.
5. The theory of utility.
• Cardinalistic and ordinalistic approach to the utility.
• The law of the diminishing marginal utility.
• The consumer surplus and the „value paradox“.
• The indifference analysis.
• Assumptions of the rational consumer‘s behaviour – consumer‘s equilibrium.
6. The demand and its elasticity.
• Individual, market and aggregate demand.
• The price elasticity of demand.
• The difference between the slope of the demand curve and the price elasticity of the demand.
• The cross elasticity of the demand.
• The income elasticity of the demand – the goods‘ typology from the income elasticity viewpoint.
7. The firm – its aims and production activity.
• Firm‘s aims.
• The choice of technology – combination and substitution of the production factors.
• The output and production functions.
• The isoquant analysis.
• The producer‘s equilibrium.
• The law of diminishing marginal productivity.
8. Costs, revenues and profits of the firm.
• The economic and accounting approach to the costs.
• The costs‘ typology and their graphic expression.
• Explicit and implicit costs.
• Firm revenues.
• The firm profit – normal and economic profit.
9. The firm behaviour in perfect competition conditions.
• The market structures‘ typology.
• The perfect competition characteristic. The firm as a price-taker.
• The production extent decision. The perfect competition firm‘s supply curve shaping.
• The firm with economic profit and economic loss.
• The break-even point and the shutdown point of the firm.
• The sense of perfect competition firm‘s model.
10. The behaviour of the monopoly.
• The characteristics of the monopoly.
• The difference between determining of the marginal revenue and the price.
• The production extent and the decision of the monopoly price.
• The monopoly profit. Interpretation of the „dead-weigth-loss“.
• Antitrust law.
• The natural monopoly and its regulation.
11. The firm behaviour in oligopoly and in monopolistic competition conditions.
• The types of oligopoly and the price coordination.
• Essential elements of the games theory and their application in oligopoly conditions.
• Monopolistic competition and its principles.
• The competition by product differentiation – real and seeming differentiation. The role of the advertisement.
• The equilibrium of the monopolistic competitive firm in the short run and in the long run.
12. Labour market.
• The rationale time alocation and the individual labour supply curve formation.
• The market supply of labour.
• Determination of the individual labour demand. The market labour demand.
• The wage as an equilibrium price of the labour.
• The economic rent and the transfer earnings.
• Wage differences. Human capital. Discrimination on the labour market.
• The role of the government on the labour market. The guarranted minimum salary – its function and consequences.
13. Capital market.
• Different forms of capital.
• Investments.
• The demand for capital.
• The supply of capital, savings.
• International capital flows.
• Investment decisions, present values, an internal rate of returns.
• The portfolio, risks and returns.
14. The distribution of income and wealth.
• The sources of inequality.
• How to measure inequality among income classes.
• The role of government in redistribution processes.
• Efficiency vs. equality.
15. Externalities and public goods.
• Market inefficiency with externalities, graphical analysis of inefficiency.
• Policies to correct externalities, government programs and private approaches.
• Public vs. private goods, free-rider problem.
• Optimal quantity of public goods determination.
16. Public choice theory
- Subjects on the political market and their aims.
- Mechanism and results of public choice.
- Typical situations and problems solved in the public choice.
- Government failure.
Conditions for subject completion
Occurrence in study plans
Occurrence in special blocks
Assessment of instruction