Microeconomics: Consumer Behaviour, 5 credits

Contents

The objective of the course is to give the student tools to formulate and analyze social problems relating to microeconomics. The course deals with theories of the individual's choice of consumer goods and labor supply as well as how economic theory can be used to formulate and apply empirical models in order to study consumer behavior.

Initially, the course analyzes the consumer's resource constraints and how they make choices about consumption goods based on rational decision theory, in the form of the so-called primary problem (utility maximization). The effects of price and income changes, as well as discrete situational changes, are studied. The consumption model is then expanded to include initial endowments, and buying and selling situations. The model is also extended to include consumption choices over time. The expenditure function is introduced, among other things, to enable monetary measurements of economic welfare when prices and other variables change. In addition to the standard assumptions in neoclassical theory, some special preference cases that can explain certain phenomena and lead to partially different conclusions are also studied.

Finally, the course demonstrates how microeconomic theory can be applied to empirical data. The aim is for students to gain an understanding of how empirical analysis can be used to guide and interpret empirical micro-oriented research.

Expected learning outcomes

Having completed the course, the student is expected to be able to:

Knowledge and understanding

• Explain central concepts in consumption theory.
• Describe the basic assumptions on which consumption theory rests and understand the empirically testable implications that follows from the assumptions.
• Explain the primary and dual problems in consumption theory and understand how these are connected.
• Analyze how the demand for consumer goods is affected by exogenous changes.

Competence and skills

• Mathematically formulate and solve consumer decision problems and apply the solutions to various structural models.
• Graphically derive monetary measures of welfare from price changes and carry out calculations using these measures.
• Understand and formulate empirical models for the demand for goods and services, and how these can be used to study various microeconomically oriented policy issues.
• Communicate economic ideas and arguments in English effectively.

Required Knowledge

60 credits completed courses whereof 45 credits in Economics. Proficiency in English equivalent to the Swedish upper secondary course English 6/level 2.

Form of instruction

Learning is supported by lectures and teacher-led practice sessions.

Examination modes

The examination consists of an individual written hall exam.

The following grading scale will be used for the course: Pass with Distinction (Väl Godkänd, VG), Pass (Godkänd, G) and Fail (Underkänd, U).

A student who does not pass the first examination will be offered an opportunity to sit a re-examination within two months. An additional examination opportunity is normally offered every academic year, one week prior to the start of the autumn term. If required by specific circumstances, other forms of examination may be used.

A student that has failed an examination on two occasions has a right to have another examiner or grading teacher appointed, unless there are special reasons against it. A written request addressed to the Director of Studies should be made no later than two weeks before the next examination opportunity. A written request should be submitted to the Director of Studies no later than two weeks before the next examination opportunity.

Exceptions from examination form as stated in the syllabus can be made for a student who has a decision on pedagogical support for disabilities. Individual adaptations of the examination form should be considered based on the student's needs. The examination form shall be adapted within the framework of the expected learning outcomes stated in the course syllabus. At the request of the student, the course responsible teacher, in consultation with the examiner, must promptly decide on the adapted examination form. The decision must then be notified to the student.

Academic integrity and cheating

As a student, you are expected to act with academic integrity. This means writing and presenting within the limits of the academic rules and expectations communicated in the university's regulations and what is otherwise specified by the responsible department. Disciplinary action may be taken against students who uses unauthorized help aids or in some other way tries to mislead on a test or when another type of task is being evaluated. Rules and regulations concerning the production of academic texts and correct referencing will be applicable to written assignments. Submitted material may be subject to plagiarism control. In addition, Umeå University rules and regulations for education and research apply.