Microeconomic Principles and Policy

Welcome to the module Microeconomic Principles and Policy. We hope that you will find the module stimulating and useful.
The module introduces a wider range of microeconomic theories and applications than only those reflecting traditional or ‘neoclassical’ views. Some of these are more contentious than others as they have implications for public policy.

There are two narratives, or theoretical approaches, running through this module. The first is the traditional neoclassical approach, which is based on the assumption that all economic actors behave rationally to improve their own self-interest in markets that are competitive. The second narrative covers alternative approaches that have been developed to analyse economic behaviours.

Learning outcomes

By the end of this module you will be able to:

• explain the principles underlying consumer demand from different perspectives
• discuss what economists mean by the 'theory of the firm'
• spell out the implications of competitive and noncompetitive market structures on the firm's pricing and output decisions
• evaluate how firms respond to the pricing and output decisions of other firms in the market
• debate the importance of the markets for inputs or factors of production, such as labour, capital and natural resources
• analyse how firms expand and the implications for market structure
• discuss how globalisation has influenced the firm's behaviour and the implications for pricing and output decisions.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Pindyck, R & D Rubinfeld (2018) Microeconomics, 9th Edition. Pearson.
  Goodwin N, J Harris, JA Nelson, B Roach & M Torras (2019) Microeconomics in Context. 4th Edition, Routledge.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, which is a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Introduction to Microeconomics

• 1.1 Introduction
• 1.2 Markets
• 1.3 Supply and Demand
• 1.4 Elasticity
• 1.5 Conclusion

Unit 2 Theories of Consumer Behaviour

• 2.1 Introduction
• 2.2 Traditional Approach of Utility Theory
• 2.3 Limitations of the Consumer Theory
• 2.4 Behavioural Approach
• 2.5 Policy Issues
• 2.6 Conclusion

Unit 3 Theory of Production and Costs

• 3.1 Introduction
• 3.2 Types of Resources Used in Production
• 3.3 Production and Costs
• 3.4 Production Decisions
• 3.5 Analysing Costs and Production
• 3.6 Conclusion

Unit 4 Markets and Competition

• 4.1 Introduction
• 4.2 Perfect Competition
• 4.3 Non-Competitive Market Structures – Monopoly
• 4.4 Monopsony
• 4.5 Non-Competitive Market Structures – Monopolistic Competition
• 4.6 Conclusion

Unit 5 Oligopoly and Other Noncompetitive Markets

• 5.1 Introduction
• 5.2 Oligopoly models of output decision-making
• 5.3 Oligopoly models of price competition
• 5.4 Game theory
• 5.5 Collusion by firms
• 5.6 Prohibiting collusion
• 5.7 Case study – China's airline markets
• 5.8 Conclusion

Unit 6 Markets for Resources – Labour, Capital and Other Inputs

• 6.1 Introduction
• 6.2 Labour Markets
• 6.3 Manufacture, Natural and Social Capital Markets
• 6.4 Finance Capital
• 6.5 Conclusion

Unit 7 Industry Structures, Pricing Behaviour and Globalisation

• 7.1 Introduction
• 7.2 Alternative Theories of Firms' Behaviour
• 7.3 Big Business
• 7.4 Pricing Behaviour
• 7.5 Globalisation
• 7.6 Conclusion

Unit 8 Microeconomics Applied to Externalities, Public Goods and Environmental Economics

• 8.1 Introduction
• 8.2 Externalities and Public Goods
• 8.3 Direct Public Provision: the changing role of State Owned Enterprises
• 8.4 Environmental Economics
• 8.5 Conclusion

Module samples

• M457 Module Introduction (PDF)
• M457 Specimen Examination (PDF)
• M457 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules