Course Objectives. The goal of this course is the one of providing students with the tools necessary to understand individual consumption and production choices under different institutional setups and under both certainty and uncertainty. During the course we will analyze the functioning of the market and its allocative properties. This knowledge constitutes the basic framework necessary to continue studying
economics. Moreover, it helps the student in analyzing economic phenomena in order to build up an
informed and personal opinion of economic reality.

Course Contents. Preferences and consumers’ choice: budget constraint, utility function, indifference curves; utility maximization and individual demand functions; income effect and substitution effect; optimal choice with income expressed in form of good endowments; demand elasticity; demand/supply equilibrium, Intertemporal choice: the dis-counted utility model. Choice under uncertainty: the expected utility model; attitude towards risk.

TEXTBOOK: “Intermediate Microeconomics: a modern approach” by Hal Varian (last edition), W. W. Norton & Company

The firm and technology: production function, marginal and average product; isoquants and iso-costs; returns to scale; revenue curves, cost curves in short and long run: profit maximization, cost minimization, factor demands. Market structure: perfect compe-tition, monopoly and oligopoly
(Bertrand, Cournot and Stackelberg)

Introduction to game theory: simultaneous and sequential games, dominant strategies, Nash equilibrium, subgame-perfect Nash equilibrium.

General equilibrium: Edgeworth box and Pareto efficiency under different market structures, first and second welfare theorems.

Externalities and public goods