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F2 Microeconomics for PICs

EC202:  Microeconomics II for PICs

Much of microeconomics is the same everywhere in the world, but there can be some regional differences, such as for the PICs.  Given the small size of most Pacific Island economies, there needs to be more attention to the analysis of monopoly and duopoly, while gender issues in resource allocation may be more pronounced than in western countries, given the nature of Pacific societies.


Course Overview:

1. Guest Lecturers,

2. Lectures and

3. “outside the box” lectures.


GUEST LECTURERS: interesting people.

(1) David Gilmour (Fiji Water): how you create a billion dollars out of water pulled from the cattle fields of Yaqara or “why Pacific Islanders should stop whinging and whining that we are too poor, without resources and too isolated and far from the metroples”

(2) Richard Broadbridge (Mai TV): how you create a television station on a shoestring budget and beat the &$#@ out of an established TV monopoly.

(3) Digicel : how you take on an established monopoly which is able to manipulate the business and regulatory environment to ensure that there is no level playing field at any time.

(4) Chairman of Commerce Commission: the challenges in regulating monopolies like Vodaphone.



Introduction to course (NS 1)
General Equilibrium Model, Adam Smith and the challenges (NS 12)
Limitations of the methodology of neoclassical microeconomics
Consumer equilibrium and Lagrangian Multiplier (NS 2)
Income effects on demand: eg of China and the yuan (NS 3,4)
Income and consumer demand: some data from the Fiji 2002-03 HIES
Pareto Optimality in Exchange (NS 12)
Price effects on demand; rice, dalo and cassava (NS 3,4)
Cobb-Douglas Production function (NS                         Essay 1 (5%)
 Short run production (NS 7)
Long run production (NS 7)                                                Test 1 (15%)
Consumer sovereignty in a world dominated by advertising
Short run cost curves (NS 8)
Long run cost curves, economies of scale and scope: why Punja will conquer the Pacific (NS 8)
Economies of scale in bottled water: can Island Chill compete with Fiji Water?
The Perfect Competition model: where does it apply in PICs? (NS 12)
Distribution Theory (NS 15)
General Equilibrium (NS 12)
Multiple market dynamics, oil, China and PICs.
Maximising consumer and producer surplus; how do airline and mobile companies do it? (NS 11)

Semester break

Why monopolies are not good for consumers or the economy (NS 13)
Monopoly and price discrimination
Monopoly and price control by Commerce Commission- what happens? (NS 13)
Duopoly (NS 14)
Prisoners dilemma (NS 6)
The micro and macro costs of a monopoly monster ATH, FNPF and the Fiji economy
Market intervention: taxes on goods

Market intervention: the evils of tariff protectionism in PICs (NS 12)
Market intervention: minimum Wages Policies in Fiji                   Essay 2 (5%).
Market intervention: quota protectionism, EU and sugar, SPARTECA and garmetns- all ending (NS 12)
Economies of scale in a global economy: why PICTA will be a stumbling block, not a building block                                          Test 2 (15%)
Externalities and public goods like education and health: why governments need to intervene
How control pollution: by command (decree) or market mechanism (carbon trading)
Monopoly historical origins in PICs and equilibrium condition (NS 1)
Gender Economics 1: the origins of gender discrimination and different approaches
Gender Economics 2: occupational segregation, mother-hood gaps and gender gaps in incomes
Gender Economics 3. Can Gender discrimination be proved through econometric analysis- an introduction
Gender Economics 4: reducing gender gaps through “win-win” development strategies in which men do not lose”
Special lecture:  The origins of the Global Financial Crisis



Usually once a week,  before the main lecture, I used to give “outside the box” lectures for about five to ten minutes on topics, not necessarily economics, which I thought the students should think about in addition to the economics lectures I was going to give them.

A   How many legs does your “Table of Life” have?

B   Watson, look at the forests, not just  the trees, said Sherlock Holmes.

C   The Olympics Medal Tally: which is the real champion country? What explains the clear superiority of small countries like Jamaica, NZ and Australia? Van PICs learn?

D.  Are ethnic jokes racist? It’s all chicken shit.

E  “Dad I am bored”. “Why dont you think about the flies and mosquitoes?”

F   Life can have many knotty problems. But they open up after a while. Till the next one.

G  Woodn’t it be nice do more with wood than firewood.

H  “Music won’t feed your stomach” said my Dad. How wrong he was.

I  Do you need a university degree to succeed in the world? My many friends who did not.

J   Vincent Van Gogh: the price and the value of a painting.

K   What is a university: read the Poet Laureate (John Masefield)

L   Our strange inheritance practices.

M  Was the Olympic Games worth it for China?  The Commonwealth Games worth it for India? FIFA World Cup worth it for South Africa?  When each of these three countries have millions of poor people needing resources?

N    Only “0”s and “1”s, yet a world without limit.

Judgment call and a good student: Boston Legal/The Practice

Religion and the “peace dividend” for the economy.

How estimate the cost of coups?


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