Market, state and the public sector

Aims of the course

The course provides the student with a comprehensive insight into the functioning of the market economy. It theoretically defines and practically shows the limits of the effective functioning of the market and market entities.

Objectives:

- to understand the functioning of the market mechanism in different markets as well as market failures

- to understand the efficiency principles in a market economy

- to analyse the reasons behind market inefficiency in cases of imperfect competition, public goods, externalities, and imperfect information

- to define the role of the state, state and private ownership, non-profit provision and define the public sector

- critically assess when the public sector is necessary as a non-market way of organizing economic activity

Course syllabus

1. Markets, the state and the public sector

2. Theory of the firm

3. Consumer choice theory, separation of payer and user

4. Markets and competition
1. Final goods markets
2. Intermediate goods markets
3. Production factor markets
4. General equilibrium
5. Typology of imperfect competition

5. Efficiency and competition
1. Efficiency in conditions of perfect and imperfect competition in the markets
2. The role of the state in conditions of imperfect competition

6. Welfare economics

7. Efficiency and market failures
1. Typology of market failures
2. The role of the state

8. Public sector and market economy
1. Defining the public sector
2. The role of the state in the public sector
3. Firm ownership and the public sector

Course director(s)