This course is designed to provide an understanding of microeconomic theory at the intermediate level. The students will be introduced to the concepts and terminology and the analytical tools and methods used by economists to describe and explain consumer and producer behavior. This course includes a thorough development of the technical aspects of the economic concepts relating to consumer and producer behaviour including consumer preferences, utility maximization, individual and market demand, Slutsky (income and substitution effects) decomposition, optimization (first and second order conditions), production theory, the supply decision, firm and industry supply, and industry structure (perfect competition in contrast with monopoly).
- Introduction and the market
- The budget constraint
- Utility and the utility function
- Consumer demand and revealed preference
- Slutsky decomposition (income and substitution effects)
- Intertemporal choice (optional)
- Market demand
- Production technology, production function
- Profit maximization
- Cost minimization
- Cost curves
- Firm and industry supply
- General equilibrium
Methods of Instruction
Lecture / Seminar /Tutorial
Means of Assessment
Problem Sets and Assignments 0% - 15%
Midterm Tests 40% - 50%
Final 35% - 50%
Upon completion of the course the student will be able to:
- Understand the nature of the market and exchange
- Explain and develop the budget constraint
- Describe and explain the nature of consumer preferences and axioms of choice
- Develop and manipulate indifference curves and utility functions
- Use the utility function and budget constraint to develop the demand curve
- Analyze and calculate first and second order conditions of constrained utility maximization.
- Utilize the demand curve and indifference curves to measure consumer surplus, CV’s and EV’s
- Analyze the income and substitution effects from the demand curve
- Develop the market demand, inverse demand function, and explain market equilibrium
- Explore the process of production and develop an understanding of isoquants, the production function, MP, and technical rate of substitution
- Analyze short run and long run profit maximization conditions and comparative statics.
- Analyze and understand the process of profit maximization and cost minimization
- Explain cost curves and calculate and explain the firm’s supply curve
- Explain the firm’ supply decision under conditions of perfect competition
- Relate firm’s supply curve to the industry supply curve
- Explain and analyze exchange, mutual benefit, partial equilibrium, and general equilibrium
ECON 1150 Principles of Microeconomics,
ECON 1250 Principles of Macroeconomics, and
MATH 1125 Calculus for Social Sciences or (MATH 1120 Calculus)
Course Guidelines for previous years are viewable by selecting the version desired. If you took this course and do not see a listing for the starting semester/year of the course, consider the previous version as the applicable version.
Below shows how this course and its credits transfer within the BC transfer system.
A course is considered university-transferable (UT) if it transfers to at least one of the five research universities in British Columbia: University of British Columbia; University of British Columbia-Okanagan; Simon Fraser University; University of Victoria; and the University of Northern British Columbia.
For more information on transfer visit the BC Transfer Guide and BCCAT websites.
If your course prerequisites indicate that you need an assessment, please see our Assessment page for more information.