Introductory Microeconomics

Paper Code: 
ECO 111
Credits: 
3
Contact Hours: 
45.00
Max. Marks: 
100.00
Objective: 

This course is designed to expose the students to the basic principles of microeconomic theory. The emphasis will be on thinking like an economist and the course will illustrate how microeconomic concepts can be applied to analyze real-life situations.

 

9.00
Unit I: 
Exploring the subject matter of Economics

Scope and method of economics; the economic problem: scarcity and choice; the question of what to produce, how to produce and how to distribute output; science of economics; the basic competitive model; incentives and information- prices, property rights and profits; rationing; opportunity sets; economic systems; reading and working with graphs.

9.00
Unit II: 
Supply and Demand: How Markets Work, Markets and Welfare

Determinants of individual demand/supply; demand/supply schedule and demand/supply curve; market versus individual demand/supply; shifts in the demand/supply curve, demand and supply together; elasticity and its application; taxes and the costs of taxation; consumer surplus; producer surplus and the efficiency of the markets.

9.00
Unit III: 
The Households

The consumption decision - budget constraint; representing preferences with indifference curves, properties of indifference curves; consumer‘s optimum choice; income, price and substitution effects

9.00
Unit IV: 
The Firm and Market Structure

Perfect Competition: Behaviour of profit maximizing firms and the production process; short run costs and output decisions; costs and output in the long run.

 Imperfect Competition: Monopoly; government policies towards competition; imperfect competition.

9.00
Unit V: 
Input Markets

Basic concepts-derived demand, productivity of an input, marginal productivity, marginal revenue product of labour; demand for labour; input demand curves; shifts in input demand curves; competitive labour markets

Essential Readings: 
  1. Karl E. Case and Ray C. Fair, Principles of Economics, Pearson Education Inc., 8th Edition, 2007.
  2. N. Gregory Mankiw, Economics: Principles and Applications, India edition by South Western, a part of Cengage Learning, Cengage Learning India Private Limited, 4th edition, 2007.
  3. Joseph E. Stiglitz and Carl E. Walsh, Economics, W.W. Norton & Company, Inc., New York, International Student Edition, 4th Edition, 2007.
Academic Session: 
2019-20
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