Microeconomic Theory II

This course is the second in the core microeconomics sequence, focusing on the economic foundations of policy intervention and the concept of efficiency in complex markets. Students analyze how economists evaluate policies based on welfare implications and study conditions under which efficiency can be achieved.

The course explores sources of market failure—including market power, public goods, externalities, asymmetric information, and bounded rationality—and examines potential remedies through policy or institutional design. Applications span security, environmental regulation, insurance, and labor markets. By the end, students learn to apply microeconomic models to assess when and how policy interventions can improve social welfare.