Class Microeconomics II

Economic activity develops through the interaction between economic agents in the market. 

An economist must understand how a market works and when we find an equilibrium in the short and long run. 

In the discipline of Microeconomics II we develop the fundamental tools to understand the behavior of firms in different market environments. 
At the beginning of the course, the theory of the company is developed, allowing for an understanding of the decision to produce and the construction of cost functions. 
In a second moment, starting from the two extreme situations of Perfect Competition and Monopoly, it is intended to create the basis of reasoning for the analysis of performance of companies in any market structure. 

1. The firm

1.1. Production

1.1.1. Short term production function

1.1.2. Long term production function

1.2. Costs

1.2.1. Long-term cost functions

1.2.2. Short-term cost functions

1.3.3. Internal and external economies of scale

2. The market

2.1. Perfect Competition

2.1.1. The firm in the Perfect Competition Market

2.1.2. Industry in the Perfect Competition Market

2.1.3. Consumer, producer and social surpluses

2.2. Monopoly

2.2.1. The Company in a Monopoly Market

2.2.2. Income structure in a monopoly

2.2.3. Equilibrium in a Monopoly Market - Short Term and Long Term

2.2.4. Monopoly power and the social loss of a monopoly

2.2.5. Natural monopolies

2.2.6. Production decision with different production centres

2.2.7. Price discrimination

2.2.8. Monopsony

This discipline favours a practical approach based on mathematical and geometric analysis and numerical applications of the developed models. 

The discussions od theoretical concepts is accompanied by the discussion of practical cases and the development of numerical applications that increase students' sensitivity to the topics under analysis. 

Students are encouraged to accompany the subject taught with readings, they are also encouraged to develop a critical perspective over the economic realities under discussion. 

Students can choose to have a continuous evaluation regime or a written exam. 

Continuous assessment includes two moments of evaluation: 4 exercises to be solved during classes and a two written tests during the semester, students' attendance is also considered.

Varian Hal (2010), Microeconomia Intermédia: Uma abordagem Moderna, 8th ed., Lisboa,

Verlag Dashofer [Varian, Hal , "Intermediate microeconomics: A Modern Approach", W W Norton & Co Incl]
Frank, Robert H. (2006), "Microeconomia e comportamento", 6ª. ed., Lisboa: McGraw-Hill. [Frank,
Robert , "Microeconomics and Behavior", McGraw-Hill]
Mateus, Abel e Mateus Margarida (2001), "Microeconomia: teoria e aplicação II", Verbo