Advanced Microeconomic Theory- I

Paper Code: 
24DECO 701
Credits: 
6
Contact Hours: 
90.00
Max. Marks: 
100.00
Objective: 

1. To orient the students with the advanced knowledge of microeconomic theory

2. To help the students understand the theories related to utility, production and cost

3. To describe the theories related to markets, average cost pricing and limit pricing

 

 

Course Outcomes: 

Course

Code

Course Title

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

   

24DECO 701

Advanced Microeconomic Theory-I

(Theory)

Students will:

CO61: analyze various aspects of utility analysis.

CO62: analyze theories and concepts related to production and cost analysis.

CO63: analyze perfect competition and monopoly

CO64: analyze monopolistic competition and oligopoly

CO65: analyze average cost and limit pricing theories,

CO66:  contribute effectively in course-specific interaction

Approach in teaching: Interactive Lectures, Discussion, Case studies.

 

Learning activities for the students:

Presentations, Assignments and Group discussions.

Class activity, Assignments and Semester end examinations.

 

18.00
Unit I: 
Utility Analysis
  • Price, income and substitution effects, Slutsky equation,
  • Buying and selling,
  • Revealed preference,
  • Choice under risk and uncertainty,
  • Inter - temporal choice

 

 

18.00
Unit II: 
Production and Cost Analysis
  • Concept of production function
  • Technological progress and production function
  • Choice of optimum expansion path
  • Derivation of cost function from production function
  • Production function of a multiproduct firm
  • Modern theory of costs
  • Short-run and long-run engineering cost curves
  • Economies of scale and scope

 

18.00
Unit III: 
Perfect Competition and Monopoly
  • Perfect competition: Equilibrium of firm and industry in short run and long run, dynamic changes and industry equilibrium, effect of imposition of tax, optimum resource allocation.
  • Monopoly: Equilibrium of monopolist in short run and long run, plant size and monopolist’s equilibrium, monopoly model in dynamic situations, effect of tax imposition, multiplant firm, bilateral monopoly, government regulated monopoly.

 

18.00
Unit IV: 
Monopolistic Competition and Oligopoly
  • Monopolistic Competitions: Actual and anticipated demand curves, Chamberlin and equilibrium, excess capacity theorem, critique of Chamberlin model, comparison with perfect competition and monopoly.
  • Oligopoly: Non-collusive oligopoly (duopoly models), cartels,  price leadership by barometric firm, low cost firm and dominant firm, Basing –point price system, game theory.

 

18.00
Unit V: 
Average Cost Pricing and Limit- Pricing

·       The marginalist controversy,

·       Full-cost pricing principle,

·       Gorden’s attack on and defence of marginalism,

·       Representative model of average-cost pricing,

·       Difference between average cost and marginal cost price

·       Bain’s limit-pricing theory,

.        Models of Sylos-Labini, Franco Modigliani, Bhagwati and Pashigian

Essential Readings: 
  1.  A. Koutsoyiannis, Modern Microeconomics, ELBS/Macmillan, 1979.
  2. Hal R. Varian, Intermediate Microeconomics, a Modern Approach, W.W. Norton and Company/Affiliated East-West Press (India), 8th edition, 2014.
  3. Pindyck, Robert S., Rubinfeld, Daniel L. and Mehta, Prem L., Microeconomics, Pearson Education, 2009.

 

References: 

Suggested Readings:

  1. Marshall, Alfred (1926), Principles of Economics, Macmillan.
  2. Robinson, Joan (1933), The Economics of Imperfect Competition, Macmillan.
  3. Chamberlin, E. H. (1933), The Theory of Monopolistic Competition, Harvard University Press.
  4. Fellner, W.(1949), Competition among the Few, Knopf.
  5. Hicks, Sir John R. (1963), The Theory of Wages, 2nd ed., Macmillan.

E-Resources:

1.  libguides.reading.ac.uk/economics/e-resources

2. journals.indexcopernicus.com/api/file/---

3. ir.inflibnet.ac.in:8443/ir/bitstream/1944

4. worldwidescience.org/topicpages/e/economics+electronic+resource.html

5. https://edge.sagepub.com

6. https://libraries.ou.edu

Journals

  1. American EconomicJournal : Microeconomics,

https://www.jstor.org/journal/aejmicrecon

2. Journal of Economics,

 https://www.springer.com/journal/712

 

Academic Session: