A20030 Economics I

Students completing this course will learn:

1. The fundamental principles and theories of microeconomic analysis
2. Application of those theories through problem solving using algebraic, geometric and graphing tools.      
3. Presentation and discussion of real world applications of microeconomic theories to market structure, firm strategies and public policy matters.

Course Prerequisites:  This is an introductory course in microeconomics and requires no prior background in economics.  However, enrollment in the course requires the following basic math prerequisites: computational skills, basic algebra (solving linear equations), geometry (areas of simple geometric figures) and graphing skills (plotting linear equations, finding intercepts, calculating slopes), excel.  Students who do not have these skills must enroll and successfully complete the Math for Economics course prior to enrolling in Microeconomics 1.

This course gives students a sound foundation in microeconomic theory and its applications, including:

1. How markets work: the demand supply model, market equilibrium, elasticity, economic welfare, impact of price ceilings/floors, taxation on the market outcome
2. An introduction to theory of the firm, producer and consumer theory
3. The 5 market models
4. Rationale for and forms of government intervention into markets

The aim of the course is to help students develop a clear, useful and open-minded way of thinking about microeconomic concepts and theories.  In doing so,  is makes extensive use of real-world examples and case studies to illustrate and analyze these theories, including:

• Estimating elasticity of demand in the US cigarette market
• Effect of OPEC cartel strategy on profitability in the world oil market
• Prices that are “too low”: agricultural subsidies and the WTO debate.
• Zegna, Ferrero, Armani and Illy’s decision to remain privately held
• Game theory applied to the movie industry: from phenomenal success to huge losses
• US and EU price fixing cases: vitamins, beer, flat screens.
• Antitrust: Microsoft, Intel suits
• Italian privatization in the 1990s: from telecom to tomatoes

Course lectures and tutorials: The course will follow a lecture + tutorial format.  Each week will include a 3 hour class lecture conducted by Prof. Della Valle + 1.5 hour class tutorial conducted by the course's teaching assistant.  The purpose of the tutorial is to review the current week’s lecture material and answer students’ questions.

Students are responsible for LEARNING the assigned lecture material before coming to class and for PROVIDING a meaningful contribution to the discussion led by the instructor. Enrollment in this class involves a commitment from students to dedicate the time and energy required to be prepared and active class participants.  

Students are responsible for consulting on a regular basis the website of the course on “my.liuc.it” where lecture materials and course updates are posted. 

Weekly problem sets 20%: Problems sets will be assigned each week to help students review and practice the current week’s lecture material.  Problem sets are due promptly a week after they are assigned and should be handed in to the teaching assistant for grading.  Problem sets handed in late will not be graded.  Answers to the problem sets will be posted on the My LIUC website.  

Midterm exam 40%: The midterm is a three-hour written exam which covers the material for the first half of the course. 

Final exam 40%: The final is a three-hour written exam which covers the material for the second half of the course.

Note: Attending students are strongly urged to take the final exam on the first available exam date following the end of classes (primo appello) when all of the course material is fresh in their minds.  They may however choose to take the exam on the second available exam date (second appello).  Beyond those dates, students who have not completed the course requirements will be considered to be non-attending and required to submit to the corresponding grading guidelines for non-attending students (see below).

Non attending students:

Due to the nature and structure of this course, students are strongly discouraged from following this course if they cannot attend classes.  However, those students who wish to do so can take a non-attending student exam which will be based on comprehensive knowledge of the following:

1. All of the material (lecture slides, notes, problem sets and readings) posted on MY LIUC for the course.

2. The contents of the textbook chapters indicated in the course syllabus: N. Gregory Mankiw, Principles of Microeconomics, edition 2e, Cengage Learning, 2011.

3. Ability to argue and discuss real world applications of microeconomic theory through case studies and examples.

The exam for non-attending students will be in the form of a 3 hour written exam.  The professor may choose to also conduct an oral examination to further assess the student’s preparation and knowledge.