Revision 3
The course starts with the choices and the decisions that individual consumers, companies and organizations are confronted with in order to allocate scare resources efficiently. The individual consumer has to make decisions about how much to buy of different goods and services and also how much to supply of different production factors, e.g. labor. The company's resource allocation problem is to decide the quantities to be produced and also how much of different factor resources the company is going to use in the production. Next step in the course is to study how prices and quantities of products and production factors are determined by the actors' different decisions. In this context, the importance of competition is studied. The course also deals with social economic efficiency. The occurrence of externalities and public goods can, for instance, lead to environmental problems and inefficient resource allocation. The question is then what type of actions the government can take in order to adjust the allocation. Special interest is devoted to the government's ability to use taxes and subsidies to influence the use of resources. To increase the understanding of the theories and the models covered in the course; both graphical and algebraical analysis is used. Hence, time will also be spent on solving economic problems with elementary mathematical concepts and tools, such as functions, equations and differentials.