Advanced Microeconomic Theory- I

Paper Code:

24DECO 711

Credits:

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 711

Advanced Microeconomic Theory-I

(Theory)

Students will:

CO121: analyze various aspects of utility analysis.

CO122: analyze theories and concepts related to production and cost analysis.

CO123: analyze equilibrium in perfect competition and monopoly markets

CO124: analyze equilibrium in monopolistic competition and oligopoly markets

CO125: analyze average cost and limit pricing theories

CO126: 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. 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), 8^th edition, 2014.

Pindyck, Robert S., Rubinfeld, Daniel L. and Mehta, Prem L., Microeconomics, Pearson Education, 2009

References:

Suggested Readings:

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