ECO2101 : Microeconomic Analysis
- Offered for Year: 2024/25
- Module Leader(s): Professor John Sessions
- Owning School: Newcastle University Business School
- Teaching Location: Newcastle City Campus
Semesters
Your programme is made up of credits, the total differs on programme to programme.
| Semester 1 Credit Value: | 15 |
| Semester 2 Credit Value: | 15 |
| ECTS Credits: | 15.0 |
| European Credit Transfer System | |
Aims
To equip students at an intermediate-level with knowledge of core microeconomic concepts and develop their problem-solving ability. In particular, an understanding of consumer theory, producer theory, choice under uncertainty, theory of the firm and theory of the industry, general equilibrium theory and welfare economics, including market failure, and their application to the analysis of economic issues within each of these core areas.
Outline Of Syllabus
1. INTRODUCTION
• Aims and approach of course.
• Mathematical notation and properties.
• Constrained optimisation.
• Existence and uniqueness theorems.
2. CONSUMER THEORY
• Neoclassical consumer theory: Preference relations and indifference curves.
• Utility function.
• Demand analysis. Marshallian and compensated demand functions and curves.
• Revealed preference theory and price indices.
3. THEORY OF THE INDUSTRY
• Oligopoly: Cournot and Stackelberg models, Bertrand model and efficiency.
• Collusive oligopoly: joint-profit maximization, stability of cartels and market sharing.
• Monopoly: price and output determination.
• Price discrimination and efficiency.
4. PRODUCER THEORY
• Production function: linear programming and neoclassical approaches.
• Isoquants and production functions.
• Cost minimization.
• Homogeneous production functions, including Cobb-Douglas.
5. THEORIES OF THE FIRM
• Owner-managed, profit-maximising assumption.
• Managerial discretion and principal-agent problem.
• Sales revenue model and expense preference model.
• Alternative approaches.
6. CHOICE UNDER UNCERTAINTY
• Decision rules for state-contingent outcomes.
• Expected values, expected utility theorem, ex-post utility function and risk.
• Applications to insurance.
• Criticisms of expected utility theory.
7. PRODUCTION AND CONSUMPTION
• Robinson-Crusoe and Man Friday economy.
• Edgeworth-Bowley box and the production possibility curve.
• Application to international trade.
8. GENERAL EQUILIBRIUM THEORY
• The 2 x 2 x 2 model and Walrasian general equilibrium.
• General equilibrium: diagrammatic treatment.
• Properties of equilibrium: Walras Law, and existence, uniqueness and stability.
9. WELFARE ECONOMICS
• Value judgements, inter-personal utility comparisons and ethical judgements
• Pareto criteria: Pareto improvements, efficiency and welfare maximisation.
• Fundamental theorems of welfare economics.
• Criticisms of Pareto: alternative welfare systems, utilitarianism and Rawls.
10. MARKET FAILURE
• Introduction, market failure and the nature of government intervention.
• Pure public goods, and solutions.
• Externalities, Coase theorem and solutions.
Teaching Methods
Teaching Activities
| Category | Activity | Number | Length | Student Hours | Comment |
|---|---|---|---|---|---|
| Guided Independent Study | Assessment preparation and completion | 1 | 90:00 | 90:00 | Time for students to complete formative and summative assessment |
| Scheduled Learning And Teaching Activities | Lecture | 34 | 1:00 | 34:00 | Present in person lectures |
| Guided Independent Study | Directed research and reading | 1 | 100:00 | 100:00 | N/A |
| Scheduled Learning And Teaching Activities | Small group teaching | 12 | 1:00 | 12:00 | Present in person seminars |
| Guided Independent Study | Independent study | 1 | 60:00 | 60:00 | N/A |
| Scheduled Learning And Teaching Activities | Scheduled on-line contact time | 4 | 1:00 | 4:00 | Synchronous, online pre- and post-exam sessions and Q&A sessions |
| Total | 300:00 |
Teaching Rationale And Relationship
Lectures provide a treatment of the core course material. Seminars facilitate small group interaction with the seminar leader and to practice problem-solving exercises to reinforce learning. Drop-in surgery to deal with specific problems experienced by students and pre- and post-assessment classes, including generic feedback on the assessed essay. Private study facilitates review and understanding of lecture material and problem sets.
Assessment Methods
The format of resits will be determined by the Board of Examiners
Exams
| Description | Length | Semester | When Set | Percentage | Comment |
|---|---|---|---|---|---|
| Written Examination | 180 | 2 | A | 80 | Candidates answer 4 questions from 10. Alternative exam in case of lockdown 24 hour online exam. |
Other Assessment
| Description | Semester | When Set | Percentage | Comment |
|---|---|---|---|---|
| Essay | 1 | M | 20 | 1500-word assessed essay counting as 20% of the overall module assessment. |
Formative Assessments
Formative Assessment is an assessment which develops your skills in being assessed, allows for you to receive feedback, and prepares you for being assessed. However, it does not count to your final mark.
| Description | Semester | When Set | Comment |
|---|---|---|---|
| Prob solv exercises | 1 | M | Seminar questions provided. |
| Prob solv exercises | 2 | M | Seminar questions provided. |
Assessment Rationale And Relationship
The written examination is designed to encourage study and test understanding across the range of microeconomic topics. The 1500-word assessed essay enables students to explore a topic in-depth and provides an opportunity for formative feedback.
Reading Lists
Timetable
- Timetable Website: www.ncl.ac.uk/timetable/
- ECO2101's Timetable