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GEI Micro 1

microeconomia

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9 views

GEI Micro 1

microeconomia

Uploaded by

rogerpuerta2006
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Introduction

Microeconomics
Prof. Olga Chiappinelli
Department of Economics, Section of Economic
Theory (building 696, 4th floor, office 435)
[email protected]
GEI Course 2024/2025
Practical info

◼ Classes (theory + exercises)


 Monday 10.00-12.00 (Aula 2007)
 Thursday 10.00-12.00 (Aula 2007)
◼ Materials and communication
 Campus Virtual
◼ Office hours
 By appointment (write me an email
explaining doubts in advance)
Evaluation Option 1:
Continuous Evaluation
◼ Partial Exam 1
 Topic blocks 1+2: 50% grade
 4th November 10.00-12.00 (Aula 2007)
◼ Partial Exam 2
 Topic blocks 3+4: 50% grade
 19th December 10.00-12.00 (Aula 2007)

◼ Multiple choice questions (40%), theory questions and


practical exercises (60%).
◼ Minimum mark of each partial exam to make an
average: 4/10.
◼ Minimum average mark to pass the course: 5/10
Continuous evaluation
• Can re-do failed parts in Final Exam
• Continuous evaluation grades are not carried over for
retake exam

Retake Exam
(Reevaluación)
04/02/2025
PE1 PE2 Average grade ≥ 5
50% ≥4 50% ≥4 Pass the exam with
04/11/2024 19/12/2024 continuous evaluation
Average
grade < 5
<4 Average
or if <4 grade < 5
you don’t or If you Final Exam
show up don’t (Única)
show up 14/01/2025
Evaluation Option 2: Unique
Evaluation

◼ Final Exam: 14th January 12-14.30


 Topic blocks 1+2+3+4: 100% grade
 Minimum mark to pass the course: 5/10
 Multiple choice questions (40%), theory
questions and practical exercises (60%)
◼ Retake: 4th February 12-14.30
Course contents

◼ Block 1: The consumer


◼ Block 2: Demand, Supply, Market
Equilibrium
◼ Block 3: Theory of the firm, Perfect
Competition
◼ Block 4: Imperfect competition
Recommended textbooks
◼ VARIAN, Hal R. Intermediate microeconomics : a
modern approach. 9th ed. New York: W. W. Norton
& Co., 2014
◼ MANKIW, N. Gregory. Principles of
Microeconomics. 8th edition. London: Cengage
Learning, 2016
◼ KRUGMAN, Paul R. and Robin WELLS.
Microeconomics. 4th edition. New York: Worth
Publishers, 2015
◼ Nechyba, Thomas J. Intermediate Microeconomics.
An intuitive approach with calculus. Cengage.
EMEA Edition. 2018
Topic 1
The Consumer
Topic 1. The Consumer.
2.1. Budget constraint
2.2. Consumer preferences: Indifference curves
2.3. Consumer equilibrium
2.4. The price-consumption function
2.5. Derivation of consumer demand
2.6. The substitution effect and income effect
2.7. The consumption function and Engel curves
The Budget Constraint
◼ The budget constraint requires that the cost of a
consumer’s consumption bundle be no more than the
consumer’s total income.
◼ The budget constraint depicts the limit on the
consumption bundles (combinations of goods and
services) that a consumer can afford.
◼ A consumer’s budget set is the set of all consumption
possibilities that is all consumption bundles that can be
consumed given the consumer’s income and prevailing
prices.
◼ A consumer’s budget line shows the consumption
bundles available to a consumer who spends all of his or
her income.
x1·p1 + x2·p2 + x3·p3 + ... + xn·pn = m
x1·p1 + x2·p2 = m
The Budget Constraint

The Budget Line


The Slope of the Budget Constraint

◼ The slope of the budget constraint line


equals the relative price of the two
goods, that is, the price of one good
compared to the price of the other.
◼ It measures the rate at which the
consumer can trade one good for the
other.
Changes in Income Shift the Budget Line
Exercises

◼ Exercise 1
The consumer initial income is 500 monetary units (m.u.), the price
of food is 25 m.u. per unit of product and the price of other goods
is 50 m.u. per unit.
◼ a) Draw the budget line with food on the horizontal axis and
the rest of goods on the vertical axis
◼ b) Assume that the price of food increases to 50 m.u. Draw the
new budget line and interpret the change of the budget line
Exercises

◼ Exercise 2 (at home)


Maria consumes two goods: pizzas and books. Let's consider the
following consumer baskets:
 X = basket containing 5 units of each of the two goods.
 Y = basket containing 10 pizzas and 2 books.
 Z = basket containing 3 pizzas and 6 books.
Represent the budget line of Mary (putting pizzas on the x-axis
and books in the y-axis) and tell which of these three baskets are
affordable in the following cases:
◼ a) When Mary has an income of 60€, the price of pizzas is 10€ per unit and
the price of books is 2€ per unit
◼ b) When Mary has an income of 110€, the price of pizzas is 10€ per unit and
the price of books is 5€ per unit
◼ c) When Mary has an income and prices of goods are such that the basket Z
is on its budget line, assuming that the opportunity cost of a pizza is one book.

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