Student guide Faculty of Economics A.Y. 2008/09

Aim of the course
The course covers those aspects of political economy which examine the logic of individual and social choices and their implications in terms of welfare, determined by the interaction between the different agents within markets, enterprises and institutions, from a regulatory perspective for what concerns the private operators and public authorities.

The Microeconomics has a preparatory function, in that it provides an introduction to the method of economic analysis using relatively simple mathematical tools already in possession of the students. The course also examines the concrete decisional problems which arise in various situations involving consumers, enterprises and public administrations.

The course will include a series of tutorial sessions devoted to in-depth analysis and the discussion of examples by working through exercises.
The following topics will be covered:
1. The economic method: individual economic rationality and social optimality; efficiency and equity;
2. Demand, supply and the market: review;
3. Theory of consumer choice and individual demand;
4. Market demand and elasticity;
5. Theory of production;
6. Theory of production costs;
7. Equilibrium of market and firm under perfect competition;
8. General equilibrium and efficiency: the two theorems of welfare economics;
9. Monopolies and their regulation: equilibrium and efficiency under a monopoly market, price discrimination, natural monopoly and antitrust policies;
10. Oligopoly and theory of games: quantity and price competition and collusion; leader and follower firms;
11.   Decisions under uncertainty.
12.   Market failures: asymmetric information
13.   Market failures: externalities.
There will be a written exam, comprising both theoretical questions and exercises. For students who attend lectures there will also be an intermediate progress test.

Reading list
Frank, R.H., Microeconomia. Comportamento razionale, mercato ed istituzioni, Milano, McGraw-Hill, 1992.
Lecture notes by Guerini, 1997.