Advanced Microeconomics

Microeconomics examines how individuals, households, and firms make decisions under resource scarcity. This math-intensive course develops the tools of modern microeconomic theory and their applications, offering a rigorous framework for understanding individual and firm decision-making in pursuit of utility and profit maximization.

The course begins with consumer behaviour and decision-making, then shifts to firms and optimal production decisions. It proceeds to competitive equilibrium and the associated welfare theorems, followed by individual decision-making under risk and uncertainty, with emphasis on expected utility theory, risk preferences, and market mechanisms such as insurance. The final section examines market failures arising from information asymmetry, externalities, and public goods.

This course provides a rigorous introduction to modern microeconomic theory through a mathematical framework for analysing individual and firm decision-making. Students explore consumer choice, producer theory, competitive equilibrium, welfare economics, decision-making under uncertainty, and market failures arising from externalities, public goods, and asymmetric information. The course emphasises analytical reasoning and mathematical modelling to understand economic behaviour and policy implications.

By the end of this course, students will be able to:

• Explain the concepts of utility, preferences, and budget constraints and their role in consumer behaviour.
• Develop mathematical models to derive demand functions through utility maximisation.
• Analyse firm behaviour using production, cost, and profit-maximisation models.
• Understand Pareto optimality, competitive equilibrium, and welfare theorems.
• Apply expected utility theory to analyse decision-making under risk and uncertainty.
• Evaluate the effects of externalities, public goods, and asymmetric information on market efficiency.

Upon successful completion of this course, students will be able to:

• Develop and apply models to explain consumer preferences, utility maximisation, and demand functions.
• Evaluate production and cost functions to determine profit-maximising output and pricing strategies.
• Examine competitive equilibrium and assess its implications for efficiency and resource allocation.
• Apply expected utility theory to analyse economic behaviour under uncertainty.
• Analyse market failures caused by externalities, public goods, and asymmetric information, and propose economic solutions.
• Apply advanced calculus, optimisation techniques, and mathematical modelling to solve microeconomic problems.

• Intermediate Microeconomics: A Modern Approach (8th Edition) – Hal R. Varian.
• Microeconomic Theory: Basic Principles and Extensions (11th Edition) – Walter Nicholson and Christopher Snyder.
• Microeconomics: Theory and Applications with Calculus (5th Edition) – Jeffrey M. Perloff.
• Microeconomics (7th Edition) – Robert S. Pindyck and Daniel L. Rubinfeld.
• Mathematics for Economists – C. P. Simon and Lawrence Blume.

What will I learn in this course?

You will develop a rigorous understanding of modern microeconomic theory, including consumer behaviour, producer theory, competitive equilibrium, welfare economics, decision-making under uncertainty, and market failure.

Is this a mathematically intensive course?

Yes. The course emphasises mathematical modelling, optimisation techniques, and analytical reasoning to solve advanced microeconomic problems.

How is the course assessed?

Assessment includes mid-semester and end-semester examinations, class participation, attendance, in-class quizzes, and problem sets.