Microeconomics II

Code:

1EC110

Acronym:

MICII

Keywords
Classification	Keyword
OFICIAL	Economics

Instance: 2023/2024 - 2S

Active?	Yes
Responsible unit:	Agrupamento Científico de Economia
Course/CS Responsible:	Bachelor in Economics

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
LECO	380	Bologna Syllabus since 2012	1	-	6	63	162

Teaching language

Portuguese

Objectives

To provide students with solid and strong foundations of microeoconomic theory in order to be prepared for the applied microeconomics courses, that are provided in the next academic years.

Learning outcomes and competences

The student must be able to:
(1) distinguish between short-run and long-run as well as variable factors and fixed factors;
(2) explain teh concept of returns to scale;
(3) explain and apply the law of diminshing marginal product;
(4) solve the firm's cost minimization problem both in the short- and long-run;
(5) explain the notions of economies and diseconomies of scale;
(6) solve the pofit maximization problem of a price-taker firm in the short- and long-run and compute the firm's supply curve in the short- and long-run;
(7) analyze and explain the equilibrium in the short- and long-run in a perfectly competitive market;
(8) evaluate the effects of a tax/subsidy in the market equiibrium in the short- and long-run;
(9) explain the concept of entry barriers;
(10) solve the profit maximization problem of a monopolist;
(11) explain the notion of price discrimination and identify the types of price discrimination;
(12) identify the optimal quantity produced by a monopolist in the case of perfect price discrimination and compute how the economic surplus is spilt between the consumers and the monopolist;
(13) solve the monopolist's profit maximization problem in the case of third degree price discrimination;
(14) evaluate the effects of a tax/subsidy in a monopolist market;
(15) explain the notion of economic regulation and evaluate the effects in the market of a price cap.

Working method

Presencial

Program

Part I - Production Theory and Costs
Chapter 1. Production theory
1.1 Concept of production
1.2 Production function
1.3 Production analysis in the short-run
1.4 Production analysis in the long run
1.5 Particular cases of production functions
1.6 Returns to scale

Chapter 2. Production Costs and cost functions
2.1 Concept of economic cost
2.2 Cost minimization in the short-run
2.3 Cost functions in the short-run
2.4 Cost minimization in the long-run
2.5 Cost functions in the long-run
2.6 Relationship between cost functions in the long-run and short-run

Part II - Markets
Chapter 3. Perfect competition
3.1 Properties of perfect competition
3.2 The concept of economic profit
3.3 The firm's problem of total profit maximization in the short-run
3.4 Market equilibrium in the short-run
3.5 The firm's problem of total profit maximization in the long run
3.6 Market equilibrium in the long-run
3.7 Taxes and subsidies
3.8 Welfare Analysis

Chapter 4. Monopoly
4.1 Entry barrriers
4.2 Maximization problem of the monopolist's total profit
4.3 Price discrimination
4.4 Welfare analysis
4.5 Taxes
4.6 Monopoly regulation:price cap.

Mandatory literature

Besanko David; Microeconomics. ISBN: 9781118716380 (5th edition)

Complementary Bibliography

Mankiw and Taylor; Microeconomics, Cengage, 2023. ISBN: 1473787122

Teaching methods and learning activities

Discussion of the topics in the syllabus with the students' participation. Some economic problems are solved at the end of each chapter/section.

Software

No need of software

Evaluation Type

Distributed evaluation without final exam

Assessment Components

Designation	Weight (%)
Teste	100,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Estudo autónomo	103,50
Frequência das aulas	58,50
Total:	162,00

Eligibility for exams

Students can be evaluated doing either a final exam or three tests. The first test covers chapters 1 and 2; the second test covers chapter 3; and the third test covers chapter 4.
The date of the third test is the same as of the first final exam.

Calculation formula of final grade

The three tests have equal weights and students are approved if the average of the three tests is greater or equal to 9,5 points, as long as the grade of each test is greater than 7 points. If a student gets a grade lower than 7 points in any of the three tests, he/she fails, in which case he/she has to do the final exam.
 

Classification improvement

Exam.