114-0502/04 – Microeconomics B - Intermediate Microeconomics (Mic B)

Gurantor departmentDepartment of EconomicsCredits5
Subject guarantordoc. Dr. Ing. Jan LibichSubject version guarantordoc. Dr. Ing. Jan Libich
Study levelundergraduate or graduateRequirementChoice-compulsory
Year1Semestersummer
Study languageEnglish
Year of introduction2015/2016Year of cancellation
Intended for the facultiesEKFIntended for study typesFollow-up Master
Instruction secured by
LoginNameTuitorTeacher giving lectures
JAN27 Ing. Hana Janáčková, Ph.D.
JAW127 Ing. Jan Janků, Ph.D.
Extent of instruction for forms of study
Form of studyWay of compl.Extent
Full-time Credit and Examination 2+2

Subject aims expressed by acquired skills and competences

- interpret modern microeconomics at the intermediate level - illustrate the consumer behaviour through indifference analysis and connect the basic model of consumer behaviour with consumer decision-making under risk - formulate the conditions of different market structures and compare models of firm's decision-making on the price and size of the output in terms of perfect and imperfect competition - analyze the market of inputs and identify perfectly and imperfectly competitive markets of inputs - classify the types of market failure and evaluate the solutions of market failure - connect the consumer choice and behaviour of the firm in general equilibrium analysis

Teaching methods

Lectures
Seminars
Individual consultations

Summary

The aim of this course is to give students the conceptual basis and the necessary tools for understanding modern microeconomics at the intermediate level. This course develops the neoclassical theory of optimising behaviour of consumers and firms. The discussion of consumer theory is followed by a careful examination of price and output determination under alternative market structures. The implications of alternative goals of firms are also examined. After the theory of supply and demand in the output market, the focus turns to an examination of resource markets.

Compulsory literature:

Compulsory literature: KRUGMAN, Paul and Robin WELLS. Microeconomics. 4th ed. New York: Worth Publishers, 2015. ISBN 978-1-4641-4387-8. NICHOLSON, Walter and Christopher SNYDER. Intermediate Microeconomics and Its Applications. 12th ed. Mason: South-Western Cengage Learning, 2015. ISBN 978-1-133-18902-2. SALVATORE, Dominick. Microeconomics: Theory and Applications. 5th ed. Oxford: Oxford University Press, 2008. ISBN 978-0195336108.

Recommended literature:

Recommended literature: MANKIW, N. Gregory. Principles of Microeconomics. 7th ed. Mason: South-Western College, 2014. ISBN 978-1285165905. FRANK, Robert H. Microeconomics and Behavior. 9th ed. New York: McGraw-Hill Higher Education, 2014. ISBN 978-0078021695. VARIAN, H. R. Intermediate Microeconomics. A Modern Approach. 9th ed. New York: W. W. Norton & Company, 2014. ISBN 978-0-393-91967-7.

Way of continuous check of knowledge in the course of semester

E-learning

Další požadavky na studenta

Termination requirements: Credit: active work on seminars written test (4 examples solved with the help of mathematics) Combined exam: 50% written test (10 questions) 50% oral part (1 thematic question)

Prerequisities

Subject codeAbbreviationTitleRequirement
114-0500 MIC A Microeconomics A Recommended

Co-requisities

Subject has no co-requisities.

Subject syllabus:

1. Utility and choice Utility, assumption about utility, Voluntary trades and Indifference Curves (their characteristics, slope, Marginal rate of substitution in consumption), Illustrating Particular preferences, Budget constraint (slope – marginal rate of substitution in exchange, shifts), Graphic and mathematic demonstration of Utility-maximization. 2. Individual Demand Curves Demand function, Changes in Income, Income Consumption Curve, Normal Goods, Inferior Goods, Changes in a Good´s Price, Substitution and Income Effect for Various Goods, Changes in The Price of another Good, Substitutes and Complements, Construction of Individual Demand Curve, Shifts in an Individual´s Demand Curve, Consumer Surplus. 3. Market Demand and Elasticity Construction of the Market Demand Curve, Elasticity, Price Elasticity of Demand, Income Elasticity of Demand, Cross Elasticity of Demand 4. Production Production function, Marginal Product, Isoquant Analysis, Isoquant maps, Rate of technical Substitution, Returns to Scale, Input Substitution, Changes in Technology, Isocost Line (mathematic and graphic presentation), Cost-Minimalizing Input Choice, The firm´s Expansion Path 5. Firm´s costs, revenues, profit Basic Concepts of Costs (accounting costs, opportunity costs, economic costs), Cost Curves, Marginal and Average Cost, Distinction Between the Short Run and Long Run, Revenues, Marginal and Average Revenues, Marginal Revenues and Price Elasticity, Economic Profit 6. Uncertainty and Strategy Probability and Expected Value, Risk Aversion, Methods for Reducing Risk, The economics of Information (Certainty line, ISO EX-line, Indifferent curves). 7. Perfect Competition Timing of a Supply Response, Pricing in the Very Short Run, Short-Run Supply, Shifts in Supply and Demand Curves, Long Run (Equilibrium Condition, Profit Maximization, Entry and Exit, Long-Run Equilibrium), the Constant Cost Case, Increasing Cost Case, Decreasing Cost Case and Long-Run Supply, Applying the Competitive Model 8. General Equilibrium and Welfare A Perfectly Competitive Price System, Pareto model, Efficiency for Exchange, Efficiency for production, Exchange-Production Efficiency, The Edgeworth Box Diagram, PPF. 9. Monopoly Causes of Monopoly (Technical Barriers to Entry, Legal Barriers to Entry), Profit Maximization, Monopoly Profits, Monopoly Supply Curve, Another Monopoly Goals, Monopolistic Distortions and Transfers of Welfare, Price Discrimination (I., II. III. Degree), Natural Monopolies 10. Oligopolies Concept of Oligopoly, Barriers to Entry, Cournot Model, Bertrand Model, Other Model of Oligopolies 11. Monopolistic Competition Concept of Monopolistic Competition, Demand Curve, Barriers to Entry, Compering with Perfect Competitive Firm, Sector Efficiency, Chamberlin Model 12. Pricing in Input Markets Marginal Productivity Theory of Input Demand, Input Supply, Equilibrium Input Price Determination, Monopsony, Bilateral Monopoly, 13. Labour Market Allocation of Time, Income and Substitution Effects of a Change in the Real Wage Rate, Labour Supply, Demand for Labour 14. Capital Market Individual Savings – The Supply of Loans, Capital, Investments, Interest Rate, Firm´s Demand for Capital and Loans, Determination of the real Interest Rate, Efficiency of Investment (appreciation methods), PV, FV, NPV, Perpetuita 15. Market Failure Asymmetric information (causes, consequences for market), Moral Hazard, Adverse Choise, Signalling, Externalities, Definition, Externalities and Allocational Efficiency, Property Rights, Bargaining, Coase Thorem, Public Goods, Characteristics, Derivation of the Demand for a Public Goods

Conditions for subject completion

Full-time form (validity from: 2015/2016 Winter semester)
Task nameType of taskMax. number of points
(act. for subtasks)
Min. number of points
Credit and Examination Credit and Examination 100 (100) 51
        Credit Credit 35 (35) 18
                Small written test Written test 12  0
                Presentation Semestral project 3  0
                Credit test Written test 20  0
        Examination Examination 65  1
Mandatory attendence parzicipation: not specified

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