After completing the course, the student is expected to be able to:
verbally, graphically and mathematically describe how consumption theory explains the decisions of a consumer and apply this to analyse different kinds of consumer decisions
describe the explanation of production theory for the optimisation behaviour of producers and explain the relation between this and the costs of firms
analyse equilibrium and welfare effects on different kinds of markets
discuss the consequences of public policy
identify and describe market failures and be able to explain how different kinds of instruments of control can adjust these
understand and explain the basic ideas behind general equilibrium and decisions under uncertainty.
The aim of the course is to provide more profound insights into economic theory. It starts by a short repetition of the basic elements in a market economy. Then, there is a discussion of how a consumer chooses his consumption and how a producer determines his production method (consumption and production theory, respectively). Then, the costs for a firm are explained (cost theory). Moreover, the equilibrium on a market is studied under different conditions and the welfare consequences of different equilibria and government interventions are analysed. The course ends with a survey of general equilibrium, market failures and decisions under uncertainty. Besides theoretical analyses, certain areas for application and examples will be discussed during the course.
The instruction consists of lectures with exercises.
The grades on the course are pass with distinction (VG), pass (G) and fail (U). The assessment consists of a test corresponding to 2 credits and a written exam corresponding to 13 credits. The grades on the test are pass (G) and fail (U) and for the exam pass with distinction (VG), pass (G) and fail (U).
Each part of the course is reported separately into the University's student register. A total grade for the whole course amounting to 15 credits is given when both parts have been completed. For the grade pass (G), a pass is required on both the test and the exam. For the grade pass with distinction (VG), pass with distinction (VG) is required on the exam and pass (G) on the test.