PRINCIPLES OF ECONOMICS - 2 PRACTICE - 2

The integrative courses of Microeconomics II aim to ignite the interest of the student for the practice of industrial organization. As part of the foreign trade studies, the course is part of a theoretical and applied mathematics context, through which the student will be able to learn and study the empirical issues of perfect market equilibrium and its distortions, from monopoly up to the applications of game theory.
The student will therefore be able to focus attention on the application of the concepts inherent to the stability of the balances in the different market situations proposed and will thus be able to develop a critical awareness of the conformation of the market in which the different types of companies are working.
The practical tools that will be made available to the student, moreover, will focus on the marginalist analysis, thanks to which the derivation and algebra at an interesting level of application can be awakened and deepened.
Along with other theoretical studies, such as macroeconomics, development economics and international economics, the practical study of microeconomics allows the student to have a rather in-depth general view of the dynamics through which certain types of markets are formed. In particular, thanks to the study of industrial organization, the student will be able to acquire important notions about the concentration of the market power of industries and will lay the foundations for a possible future development of the concepts connected to these phenomena.

After the practical teaching of Microeconomics II, the student will need to know and apply the practical optimization tools related to the analysis of perfect market equilibrium and all its distortions.
The student must therefore know analytically the form of the profit functions associated with the several types of companies operating in the market and must know the procedures for optimizing these functions, based on the concentration of the power of the companies in the markets proposed during the exercises.
Specifically, the student will be able to separate the analytical practice inherent in the perfect market, the open market, taxation, monopoly and duopolies.
The student must also master algebra and the analysis of functions, Cartesian graphical representations and, above all, must know the meaning and interpretation of the calculations and the results obtained during the optimization procedures applied.
Finally, the student must be able to draw conclusions and critically analyze the different market concentrations presented during the lessons, evaluating the conditions for creating well-being.

Formally, OFA of Mathematics is sufficient.
The knowledge of the derivation of all the functions (with the exception of the trigonometric ones), the management of a Cartesian plane and of the algebra associated with the resolution of equations and systems is highly recommended.

- Profit maximization for price-taker companies and competitive equilibrium.
- Interventions in the market: taxes and subsidies, minimum and maximum prices, tariffs and import quotas.
- Monopoly: equilibrium and social loss. Monopoly regulation.
- Price policies: perfect price discrimination, two-part tariff, multimarket discrimination.
- Game theory: Nash dominance and equilibrium. Sequential games.
- Oligopoly: Cournot and Bertrand models.

Hal R. Varian "Microeconomia". Libreria Editrice Cafoscarina, Settima Edizione a cura di A. Medio, 2011
Eserciziari consigliati:
M.C. Molinari, Esercizi di Economia Politica (seconda edizione), Cafoscarina, 2017.
T.C. Bergstrom H.R Varian, Esercizi di microeconomia, Cafoscarina.

Written exam of 90 minutes, with open questions of theory and exercises similar to those carried out in practice and present in the exercise book. The exam is passed with 18 points. The value of each question is indicated in the exam.

The course is divided into:
a) lectures;
b) weekly classroom exercises;
c) individual study.
Students are strongly encouraged to actively attend lectures and exercises. Performing the exercises (available on the Moodle platform) is an integral part of the preparation.

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