Microeconomic Theory

Module aims

  • This unit aims to provide students with a theoretical foundation in microeconomic analysis. It seeks to explain the principles underpinning mathematical models of economic behaviour and demonstrate how they can be useful in analysing resource allocation problems. 

Learning outcomes

On successfully completing this course unit, students will:

  • Understand how economic theory can be used to analyse the functioning of markets and make judgments about the allocation of resources. 
  • Have skills in mathematical and graphical modelling to describe the core theoretical principles of microeconomics and analyse market outcomes.  
  • Be able to communicate microeconomic analyses to others. 

Module syllabus

  • An introduction to the microeconomic analysis of resource allocation via markets.  
  • Demand side economics is discussed in relation to the rules of consumer preferences and the theory of utility maximisation.  
  • The Slutsky equation and inverse demand interpretations are also introduced and the concept of consumers’ surplus is studied.  
  • Supply side economics is covered in the theory of the firm and discussed in relation to cost and production functions and profit maximising and cost minimising behaviour.  
  • Solutions for optimising behaviour are derived using the Lagrange multiplier method and equilibria are established and analysed.  
  • The course also considers situations in which markets fail and discusses how public interventions can be evaluated and the conditions under which they can improve resource allocation via markets. 

Week No.  

Topic 

Staff 

01 

Introductory Concepts 

DJG 

02 

The Theory of Consumer Behaviour 

DJG 

03 

The Demand for Goods 

DJG 

04 

Inverse Demand and Welfare 

DJG 

05 

Consumers Surplus and Elasticities 

DJG 

06 

Coursework 1 Review 

GTAs 

07 

The Theory of the Firm 

DJG 

08 

Costs, Supply and Competition 

DJG 

09 

Market Failure: Externalities and Public Goods 

DJG 

10 

Coursework 2 review and exam preparation 

GTAs 

Pre-requisites

Students need no prior knowledge of economics, but must have a basic background in mathematics, including algebra, multivariate calculus, and principles of optimisation.

Co-requisites: CIVE97025 Innovation in Civil Engineering, CIVE97021 Project Management, CIVE97023 Business Environments and Construction Law

Teaching methods

There will be 16 hours of lectures delivered over 10 weeks in two hour blocks. We will have tutorials after each two-hour lecture to review and practice problems and to set coursework. If you have questions about specific problems, please be prepared to ask them at the tutorials. Review sessions will be held in weeks 6 and 10 to go through the set coursework problems and provide feedback on submitted work. A special session will be held in week 10 to help prepare for the exam.

Assessments

Two pieces of coursework will be assigned. 

An examination in microeconomic theory will be held at the beginning of the second term. The exam will last 1.5 hours and will comprise a set of multiple choice questions covering core material that has been taught in lectures and tutorials or covered in the recommended text for the course.   

B1 - Microeconomics 

Rubric: 

Multiple choice questions 

Weighting 

80% 

Coursework: 

Two pieces of written coursework 

Weighting 

20% 

Coursework title 

When set 

When due 

Return date to students 

Weighting 

Set by 

Demand coursework 

Week 4 

10 days after being set 

Week 6 

50% 

DJG 

Supply 

coursework 

Week 8 

10 days after being set 

Week 10 

50% 

DJG 

Reading list

Core

Supplementary

Module leaders

Professor Daniel Graham