MICROECONOMICIS is a course of the second year of the Grado en Administración y Dirección de Empresas. This course develops topics on Microeconomic Theory to analyze the markets of goods and services. It overviews some market failures and analyzes the consequences of those situations on the optimal decision making and interaction of the firms, as well as on the market allocation and derived welfare.

This course builds upon the knowledge acquired by the student in the first year, more precisely, upon the consumer theory, the theory of the firm and the analysis of competitive markets.

After successfully following this course, the student will be able to identify the relevant assumptions on market theory that are suitable to describe the functioning of a given real market. They will also master the analytical tools to: (1) represent and quantify the market allocation and derived welfare, (2) consider the strategic interaction of agents, and (3) analyze the effect of some policies aimed at achieving efficient allocations when there are market failures.

The contents of this course are related to those of other courses as in the case of economic policy (fiscal policies and market regulation policies), strategic management and marketing (optimal pricing), as well as with legal issues of the firm and competition policy.

The course's competencies are related to the Sustainable Development Goals (SDGs) of the UN 2030 Agenda in various dimensions. This course teaches:

- SDG 2 Zero Hunger (target 2c). The course shows how markets work, which can be applied to specific markets such as food commodities (Topics 1, 2 and 3).

- SDG 3 Health and well-being (target 3.8). The course teaches how to identify economic inefficiencies and how to eliminate them, thus helping to release relevant resources for this objective. The analysis of the market power (which increases prices and reduces resources) is measured in terms of the well-being of consumers and society (Topics 1, 2, and 3). The effects of asymmetric information in the health insurance market are also analyzed (Topic 5)

- SDG 7 Affordable and clean energy (targets 7.a). Basic concepts of Game Theory are studied that allow studying the possibilities of international cooperation in technological matters (Topic 4).

- SDG 13 Climate Action (goal 13.2) and SDG 12 Responsible Consumption and Production (goals 12.2, 12.5, 12.c), SDG 15 Life on Land (goal 15.2). Issues related to the efficient management of the environment, common property and public goods, relevant to these objectives, are analyzed (Topic 6).

This course is part of the IKD i3 project.

SKILLS AND GOALS



1.- Give rationality to the analysis and describe the market's behavior, from individual behavior of firms and households.



2.- Learn the ability to evaluate the consequences of different scenarios and select the best, given the objectives, in markets where agents interact.



3.- Understand the role of economic models to be able to explain the microeconomic relationships in markets where agents are rational. Understand the microeconomic strategies and their implications for management.



4.- Learn the ability to identify key factors of a microeconomic problem.



5.- Understand the effects of microeconomic policies using different graphical and mathematical tools.



6.- Learn the ability to pose, and solve analytically, problems of noncompetitive markets. Understand the consequences of market power and the different competitive strategies of firms with market power.



7.- Learn the ability to explain the answers to the problems of asymmetric information developed in the markets. Understand the implications of asymmetric information on the interaction between economic agents.



8.- Learn the ability to understand market failures and some government regulations to address those failures. Understand the consequences of market failures.



SPECIFIC COMPETENCIES OF THE SUBJECT

C1. Identify and build models of economic empirical facts related to the functioning of markets.

C2. Interpret in economic terms the outcomes of microeconomic models.

C3. Understand the decision making of firms in oligopolistic, monopoly and perfect competition markets.

C4. Understand the relationship between models of strategic behavior and real-world economic problems.

THESE SPECIFIC COMPETENCES ARE LINKED TO THE COMPETENCES OF THE MODULE: M02CM05.



TRANSVERSAL COMPETENCES OF THE SUBJECT

CT1. Ability of analyzing and summarizing (level 3: ability to obtain and argue the outcomes of the analysis of a complex reality and establish its limitations).

CT2. Decision-making and problem solving (level 2: ability to propose a solution to the problem with some degree of autonomy).



LEARNING OUTCOMES:

- Building models of economic empirical facts related to the functioning of markets.

- Interpretation in economic terms of the results of microeconomic models.

- Understanding of concepts related to business decision making in oligopolistic monopoly and perfect competition markets.



EDUCATION FOR SUSTAINABLE DEVELOPMENT-SUSTAINABLE DEVELOPMENT GOALS (SDGS): In addition, the transversal key competences for sustainability are worked on the basis of the achievement of cognitive, socio-emotional and behavioural learning objectives. The competences, objectives and concrete results are described in the corresponding student guides. The assessment of these outcomes is included in the context of continuous assessment.

Contents



Part One: Market Structure and Competitive Strategy



Topic 1.- Market Power: Monopoly and Monopsony.

Topic 2.- Pricing with Market Power.

Topic 3.- Monopolistic Competition and Oligopoly.

Topic 4.- Game Theory and Competitive Strategy



Part Two: Information, Market Failure, and the Role of Government



Topic 5.- Markets with Asymmetric Information.

Topic 6.- Externalities and Public Goods.

Lectures and classes to solve problem sets.

• Continuous Assessment System
• Final Assessment System
• Tools and qualification percentages:
  • Multiple-Choice Test (%): 100

The grading rule is based on the assessment of participation in various activities developed during the course and final multiple choice test. The grading rule is the same in both the first (January) and second (June) call.



The continuous assessment will evaluate the student's participation and performance in activities proposed by the instructor in class. The continuous assessment will have at most a weight of 25% in the final grade. Students will also have to take a final written multiple choice exam. When the multiple-choice test score is at least 4 points, the course grade will be the sum of the class participation score and the test score.



For students not participating in class activities, the final grade will be based on a final written multiple choice exam.



The final exam will be taken on-campus. If for any reason the UPV/EHU decided that an on-campus exam were not recommended, the exam format might change. The instructor would let students know about changes in the assessment policy as soon as possible.

The grading rule is the same in both the first (January) and second (June) call. The final exam will be taken on-campus. If for any reason the UPV/EHU decided that an on-campus exam were not recommended for the second call, the exam format might change. The instructor would let students know about changes in the assessment policy as soon as possible.

R.S. Pindyck and D.L. Rubinfeld, Microeconomics, Pearson Prentice Hall.

Basic bibliography

R.S. Pindyck and D.L. Rubinfeld, Microeconomics, Pearson Prentice Hall.

In-depth bibliography

To be determined by the faculty responsible for this course

Journals

To be determined by the faculty responsible for this course

Web addresses

https://www.un.org/sustainabledevelopment/es/objetivos-de-desarrollo-sostenible/