Microeconomics II

2026/2027

Academic Year

ENG

Instruction in English

6

ECTS credits

Delivered at:

Department of Economics

Course type:

Compulsory course

When:

2 year, 2, 3 module

Instructor

Butukhanov, Aleksandr V.

Course Syllabus

Abstract

The compulsory course is taught to the 2nd year undergraduate students. The learning goals for this course include: familiarizing students with basic concepts of the microeconomic theory, development skills of formal analysis of economic processes and phenomena at the micro level using models of the behavior of economic agents (consumers, firms, government), and using economic theory to understand and evaluate policy proposals. It is assumed that students know the basics of differential calculus, optimization theory, and probability theory as well as introductory microeconomics, or Microeconomics I studied before.

Learning Objectives

• Establish the axiomatic foundation of consumer choice and develop the theoretical framework for deriving demand from rational preferences.
• Analyze how consumers respond to price and income changes through decomposition of effects and endowment considerations.
• Extend traditional consumer theory to incorporate social preferences and relative consumption concerns.
• Develop the theory of the firm and analyze partial equilibrium in competitive markets.
• Analyze equilibrium across multiple markets and evaluate economic efficiency.
• Examine monopolistic market structures and sophisticated pricing strategies.
• Model strategic firm behavior in concentrated markets.
• Analyze markets with differentiated products and their competitive implications.
• Examine markets with network effects, two-sided platforms, and factor market interactions.
• Analyze strategic relationships between firms at different levels of the supply chain.

Expected Learning Outcomes

• Synthesize microeconomic principles to formulate and critique real-world business and policy decisions
• Model economic decision-making using formal optimization techniques.
• Analyze market efficiency and evaluate economic policy in equilibrium frameworks.
• Evaluate strategic firm behavior and market outcomes under imperfect competition.
• Analyze how market structure and product characteristics influence firm strategy.
• Apply microeconomic principles to factor markets and strategic contracts.
• Incorporate behavioral and social dimensions into standard economic models.
• Test the consistency of economic behavior using revealed preference theory.

Course Contents

• Preferences and Utility
• Consumer Choice and Demand
• Income and Substitution Effects
• Endowment: Buying and Selling
• Social Preferences and Relative Consumption
• Producer Theory
• Partial Equilibrium
• General Equilibrium and Welfare
• Monopoly and Price Discrimination
• Oligopoly, Collusion, Horizontal Mergers
• Product Differentiation and Advertising
• Monopolistic Competition
• Network Industries
• Factor Markets and Bargaining
• Vertical Contracts

Assessment Elements

• Quizzes
  Quizzes on each topic are posted in Smart LMS. The objective of quizzes is to assess a student's ability to apply core theoretical models to complex problems, analyze specific economic scenarios, and demonstrate a deeper, intuitive understanding beyond rote memorization. Regular, low-stakes quizzes allow students to practice their pacing and timing for much more heavily weighted midterms and final exams. This practice without proctoring reduces test anxiety and builds confidence.
• Midterm 1
  A midterm exam is designed to assess a student's understanding of course material covered so far.
• Midterm 2
  A midterm exam is designed to assess a student's understanding of course material covered so far.
• Seminars
  Students are expected to read the assigned textbook chapters and supplementary materials before attending seminars in order to grasp foundational concepts. Seminar time is dedicated to applying this knowledge through guided problem-solving, analytical discussions, and peer collaboration. Problem sets serve as essential tools for self-study and preparation. Short assessments — such as 5–10 minute quizzes at the end of selected seminars — may be used to reinforce understanding and monitor progress.
• Final exam
  The final exam will be a written work covering all topics from the current syllabus, using assessment and test materials (ATMs) in sum similar to those used for the midterms.

Interim Assessment

• 2026/2027 3rd module
  0.2 * Midterm 1 + 0.05 * Quizzes + 0.2 * Midterm 2 + 0.4 * Final exam + 0.15 * Seminars

Bibliography

Recommended Core Bibliography

• Hugh Gravelle, & Ray Rees. (2004). Microeconomics. Harlow: Financial Times/ Prentice Hall. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1417798
• Intermediate microeconomics with calculus, Varian, H., 2014

Recommended Additional Bibliography

• Microeconomic theory: basic principles and extensions, Nicholson, W., 2016
• Microeconomics: theory and applications with calculus, Perloff, J. M., 2017

Authors

• Butukhanov Aleksandr Vladimirovich
• Konovalov Aleksandr Viktorovich