Mathematical Economics-II

Paper Code: 
24DECO 611A
Credits: 
6
Contact Hours: 
90.00
Max. Marks: 
100.00
Objective: 

 

1.To understand the Price and Output Determination.

2.To explain the concept of game theory and its application

3.To comprehend the techniques of input output analysis and linear programming.

 

Course Outcomes: 

Course

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

Course Code

Course Title

24DECO 611 A

Mathematical Economics-II

(Theory)

Students will:

CO103: mathematically analyze different aspects of monopoly

CO104: mathematically analyze behaviour of a firm under duopoly.

CO105: analyze fundamental principles of game theory and its application

CO106: analyze principles of input-output analysis and its application

CO107: analyze the principles of linear programming and its application

CO108: contribute effectively in course-specific interaction

Approach in teaching: Interactive Lectures and Discussions.

 

Learning activities for the students:

Practice Modules and

Assignments.

Class activity, Assignments and Semester end examinations.

 

18.00
Unit I: 
Monopoly
  • Monopoly – Characteristics
  • Equilibrium of simple monopoly - profit maximization
  • Sales revenue maximization by monopolist
  • Price discrimination: meaning, degrees and determination of price and output
  • Multi-Plant Monopolist
  • Effects of various taxes on output and price under monopoly;yn

 

18.00
Unit II: 
Duopoly
  • Duopoly - Meaning and characteristics
  • Quasi competitive solution
  •  Collusion solution
  •  Cournot solution
  • Market share solution

 

18.00
Unit III: 
Game Theory
  • Basic concept, pay-off matrix.
  • Types of games –game of strategy and game of chance, two-person constant-sum and zero-sum games
  • Maximin, minimax and saddle point solution;
  • Dominant strategies
  • Pure and mixed strategies
  • Nash Equilibrium

 

18.00
Unit IV: 
: Input-Output Analysis
  • Concept of ‘Open & Closed’, ‘Static & Dynamic’ Model
  • Assumptions of input-output model
  • Input-output transactions table and coefficient matrix
  • Determination of gross output in an open & static input-output model

Hawkins-Simon viability conditions  

18.00
Unit V: 
Linear Programming
  • Meaning, assumptions and ingredients of linear programming
  • Basic concepts of linear programming-feasible region, convex set, feasible solution, basic feasible solution and optimal solution
  • Formulation of linear programming problem and its graphical solution
  • Simplex Method (for maximization only)
  • Concept of Primal and Dual.

 

Essential Readings: 
  1. Henderson, J.M. and Quandt, R.E. Microeconomic Theory: A Mathematical Approach, McGraw Hill, 1980.
  2. Chiang, A. C., Wainwright, K., Fundamental Methods of Mathematical Economics  McGraw Hill, 4TH Edition, 2005.

 

References: 

Suggested Readings:

  1. Mehta, B.C. andMadnani, G.M.K., Mathematics for Economists, Sultan Chand & Sons.
  2. Mehta, B.C., Mathematical Economics: Microeconomic Models, Sultan Chand & Sons.

 

E Resources :

Linear Programming Solver Software

https://sourceforge.net/projects/lipside/

Journals:

 

Academic Session: 
2024-25
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