Introductory Microeconomics

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

1.      To orient the students with the basic principles of microeconomics.

2.      To examine the interactions of supply and demand and characteristics of perfect and imperfect markets.

3.      To describe the various concepts of labour markets.

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; consumer surplus; producer surplus and the efficiency of the markets.

9.00
Unit III: 
The Households

The consumption decision – cardinal utility approach; law of diminishing Marginal utility, law of equi marginal utility; derivation of demand curve; 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: characteristics of 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. C. and Ray C. F., Principles of Economics, Pearson Education Inc., 8th Edition, 2007.

2.      Mankiw, N. G., Economics: Principles and Applications, ,Cengage Learning India Private Limited, 4th edition, 2007.

References: 

Stiglitz, J. E. and Walsh, C. E,  Economics, W.W. Norton & Company, Inc., New York, 4th Edition, 2007.

Academic Session: 
2022-23
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