Microeconomics

The aim of the Microeconomics lecture is to ensure understanding and provide knowledge of fundamental notions regarding the individual behaviour of consumers and producers, and their interaction in markets under the hypothesis of rationality. The rationale of the subject is to address the problem of how societies allocate scarce resources, with a focus on market economies. The lecture builds on the laws of demand and supply, discussing how we all face trade-offs and when making choices we sacrifice something else, how the consumer reaches its optimum; it then addresses the producer behaviour using production functions and costs, both in the short and in the long run. Later on, the lecture discusses various market structures and how firms make decisions depending on the market structure they are part of, along with optimality problems. Most importantly, the lecture teaches students how to think in an economic way, for instance by comparing marginal benefits and marginal costs (thinking at the margin), by understanding that people respond to incentives and that markets are the best way to organize economic activity or that there is no such thing as a free lunch. Microeconomics (and Economics in general) is useful because it creates well-informed members of the society, it helps individuals to gain and retain economic security and it provides businesses with strategic information and interpretations.