Economics: Microeconomic Theory with Applications

Why has chocolate gotten so expensive? Why is it so difficult to get a student apartment? Why does the economy usually boom just before an election year? And why are students more likely to lose their phone when they have insurance? These are the types of questions we ask in this course.

The goal is to give you a broad overview of microeconomic theory and introduce you to the tools that are used to study microeconomic questions. This will help you analyse and better understand the forces at work in our daily market economy. It also helps prepare you for intermediate and advanced courses in microeconomics you might be aiming to take in the future.

We start by studying the principles of the market economy, showing how the invisible hand can generate great welfare but also lead to pollution and inequality (and expensive chocolate). We then shift our focus to firms, understanding how their choices are affected by market conditions. Throughout the course, our focus lies in understanding the incentives faced by consumers, firms and other interested parties. We then extend this logic to interesting applications, such as the political process, insurance markets and how to design incentives for employees.

Course literature

The course literature listed may be updated up to eight weeks before the course begins.

The main body of this course consists of lectures. During these lectures, you will be guided through the various chapters of the book. The lectures will cover new examples and act as a guide to solving some of the more technical problems. Part of the lectures may be dedicated to classroom problem sets, giving you the opportunity to practice new skills. Several lectures will be given by guest lecturers, sharing their expertise on topical questions. There will be further opportunity to practice your skills in a series of support lessons that are taught by teaching assistants. Teaching assistants will also conduct a classroom experiment early in the course to give you hands-on experience with market mechanisms.

Assessment will be done in two main forms. The first is a classic in-person hand-written exam. The exam will be roughly equally split between verbal and math-based questions. The second is a group project in which you are asked to apply your knowledge of microeconomic theory to a practical application (such as student apartments in Lund). In addition to handing in a written essay, you will also be asked to present the results in front of the class.

Prerequisites

General and courses corresponding to the following Swedish Upper Secondary School Programs: English 6, Mathematics 3b/3c and Social Studies 1b/1a1+1a2.