30L106 :Microeconomics 2 for ECO: Welfare Economics

General info

Instruction language English
Type of Instruction Lectures and tutorials (Lecture schedule)
Type of exams Mid-term exam, Final exam. Weekly quizzes. Weekly exercises. In-class experiment. Debates. Two essays (incl. one for Writing Skills). Active participation in tutorials. (Examination schedule)
Course load:6 ECTS credits
Registration:via Blackboard
Blackboard InfoLink to Blackboard (When you see 'Guest are not allowed in this course', please login at Blackboard itself)


dr. B.A. Vollaard (Coordinator)

prof. dr. E.E.C. van Damme

Y. Yang


Central issue in this course is why the government should have a role in the economy - and how different policy instruments affect social welfare.


In microeconomics 1, you learned how markets work. Now, in microeconomics 2, you learn why markets sometimes fail, and what to do in that case. In particular, we discuss what the government can do about it, and why the government will also likely to fail in some situations. We discuss five rationales for government intervention: (1) externalities; (2) public goods (and public interest goods); (3) paternalistic motives; (4) market structuring and market regulation, and (5) redistribution. We provide you with the tools to assess alternative policies that are aimed at correcting inefficient and unfair market outcomes. To closely connect the course to issues in the real world, we frequently use examples and case studies.


Grading: Your grade is determined by the two written exams and your participation grade. You should score at least a 5.5 on the written exams to be able to pass the course. The participation grade is based on: (a) your performance in a debate on a topical policy issue, (b) an essay based on this debate, (c) quality of reasoning in writing skills essay on a topic related to this course; (d) weekly quizzes; (e) presence at in-class experiment and at debates; (f) your active participation in the tutorials.


Please note, that this course is only open to students of the Economics program and cannot be used as an elective for other programs.

Compulsory Reading

  1. Joseph E. Stiglitz, Jay K. Rosengard, Economics of the public sector (4th ed., international student edition), W.W. Norton, 2015.

Recommended Reading

  1. To be announced.

Required Prerequisites

microeconomics 1

Compulsory for