Microeconomics: Consumer Behaviour

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.