114-0520/01 – Introduction to Microeconomics (MIC)
| Gurantor department | Department of Economics | Credits | 5 |
| Subject guarantor | Ing. Ivana Jánošíková, Ph.D. | Subject version guarantor | Ing. Ivana Jánošíková, Ph.D. |
| Study level | undergraduate or graduate | | |
| | Study language | English |
| Year of introduction | 2016/2017 | 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
Summary
The aim of the subject is to make the basis for students’ independent creative economic thinking. The main emphasis is laid on the behavior of consumers, households, firms and government. Attention is also paid to the labor market and capital market.
Content of the course:
1. Introduction to economics.
2. Economic backgrounds and consequences of the production.
3. Market and market mechanism.
4. Theory of the utility.
5. Market demand and its elasticity.
6. Aims and production activity of the firm.
7. Costs, revenues and profits of the firm.
8. Behavior of the firm in different market structures - perfect competition, monopoly, oligopoly, monopolistic competition.
9. Labor market.
10. Capital market.
11. Distribution of income and wealth.
12. Externalities and public goods.
Compulsory literature:
Recommended literature:
Way of continuous check of knowledge in the course of semester
Student can pass out the subject with a minimum 51 points from the total 100 points.
E-learning
Other requirements
active participation, 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.
- Mainstreams of contemporary economic thought.
2. Economic backgrounds and connections of the production.
- Needs and resources. Production factors and their scarcity.
- The concept of rationality in economics.
- Opportunity costs.
- The physical and institutional production possibility frontier – static and dynamic point of view.
3. 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.
4. The theory of utility.
- Cardinal and ordinal 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 behavior – consumer‘s equilibrium.
5. The demand and its elasticity.
- Individual, market and aggregate demand.
- The price elasticity of demand.
- The cross elasticity of the demand.
- The income elasticity of the demand – the goods typology from the income elasticity viewpoint.
6. 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 law of diminishing marginal productivity.
- The isoquant analysis.
- The producer‘s equilibrium.
7. Costs, revenues and profits of the firm.
- The economic and accounting approach to the costs.
- Explicit and implicit costs.
- The cost typology and their graphic expression.
- Firm revenues.
- The firm profit – normal and economic profit.
8. The firm behavior 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.
9. The behavior 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-weight-loss“.
- The natural monopoly and its regulation.
10. The firm behavior 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.
- The 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.
11. Labor market.
- The rationale time allocation and the individual labor supply curve formation.
- The market supply of labor.
- Determination of the individual labor demand. The market labor demand.
- The wage as an equilibrium price of the labor.
- Wage differences. Human capital. Discrimination on the labor market.
- The role of the government on the labor market.
12. Capital market.
- Different forms of capital.
- Investments. The demand for capital.
- The supply of capital, savings.
- Investment decisions, present values, an internal rate of returns.
- The portfolio, risks and returns.
13. 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.
14. Externalities and public goods.
- Market inefficiency with externalities.
- Private solutions to externalities.
- Public policies toward externalities.
- Public vs. private goods, the free-rider problem.
- Optimal quantity of public goods determination.
Conditions for subject completion
Conditions for completion are defined only for particular subject version and form of study
Occurrence in study plans
Occurrence in special blocks
Assessment of instruction
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