Principles of microeconomics

 

The section titles link to the supporting material of the lecture. In the reference list, stars denote suggested readings. For any question or query regarding the course : nicolas.jacquemet@univ-lorraine.fr

                                                      

Beyond the material provided on the go, several books are certainly worth having a look at ; they are listed and quickly presented below. None of them is mandatory.

 

 


Contents

 

 

                                             I.       Introduction

1.     What economics used to be, what it is now

2.     Principles of the principles: distinguishing ideas on which economics are based

3.     Road map of the course

 

 

                                       II.           Thinking Like an Economist: The Analytical Toolbox

1.     Models: What they tell us, what they donÕt

2.     How empirical works can identify causal effects

3.     Economists as policy advisors

 

 

                                     III.           Why an Exchange Economy? Gains from Trade and Specialization

1.     Resource allocation in an autrachy economy

2.     What trade changes, and for whom

 

 

                                     IV.           Utility Functions, Budget Constraint, and Demand

1.     Behind choices: preferences and their shape

2.     What can be afforded: the budget constraint

3.     Constrained optimization and individual demand

 

 

                                       V.           ProducersÕ Behavior. Cost Functions, Perfect Competition and Profit Maximization, Supply

1.     What is a firm? The microeconomics view

2.     The competitive single-factor firm

3.     The cost structure of firms

 

 

                                     VI.           How Markets Work. Supply, Demand, and Market Equilibrium

1.     All consumers: from optimal consumption to demand function

2.     All producers: From optimal production to supply function

3.     Everybody: Market equilibrium

 

 

                                   VII.           What Markets Achieve. Surpluses and Efficiency

1.     Demand and willingness to pay: ConsumersÕ surplus

2.     Supply and unitary profit: producersÕ surplus

3.     Market equilibrium and welfare

 

 

                                 VIII.           Market Equilibrium and Government Policies

1.     The instruments of market intervention, and their qualitative consequences

2.     Towards a quantitative assessment: supply and demand elasticities

3.     Quantitative consequences of market interventions

 

 

                                     IX.           Introduction to Public Economics: The Allocation of Non Market Goods

1.     Externalities as a source of market failure

2.     Alternative allocation mechanisms

3.     Public goods and common resources

 

 

                                          X.      Introduction to Industrial Organization: Allocation on Imperfectly Competitive Markets

1.     Market allocation when firms have market power

2.     Regulation: why monopoly firms?

 

 


Suggested readings

 

The best way to learn more on the topic it is to read about economics. One possibility is to look for academic papers on topics of interest to you. Another (which I would favor) is to read writings for a general audience produced by trustable economists (donÕt ask me for a definition of that). Below is a list of such books that I advise. IÕm also adding a few comments on the go to help you make your choice. When available, the link on the title will get you to the google book version.

 

 

 

Pierre Cahuc and Andre Zylberberg, Translated by William McCuaig. The Natural Survival of Work: Job Creation and Job Destruction in a Growing Economy

 

A fascinating book about how economics informs about the labor market, and the state of the art on active labour market policies evaluation. If you are to read only one this year, this should be your choice.

 

 

Richard H. Thaler and Cass R. Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness

 

Interesting new perspective on how to design public policies based on what we know about actual economic behavior.

 

 

Daniel Cohen and William McCuaig. Three Lectures on Post-Industrial Society

 

If youÕre not sure whether economics is actually a social science and whether it really helps to think the world, this book is definitely for you. If you like it, just pick up any other book by Daniel Cohen: some are better than others, but they will all make you think thanks to economics.

Steven D. Levitt and Stephen J. Dubner. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything

 

All kind of funny stuff economists are working on, written in a vey mickey mouse style. But interesting and will give you a broad view of what economics is about today.

Paul Krugman. Pop Internationalism

 

A good book about international trade and the challenges of globalization. It is old, but many of its ideas are still to be understood, others proved wrongÉ

Tim Harford.  The Undercover Economist

 

I never read it, but I read the blog on a regular basis, it is interesting and well inspired. The book is pretty famous and has been supported by people I trust.

 

 


Credits

 

This teaching material owes a lot to inputs from, and comments and discussions with, Christelle Dumas and Olivier L'haridon