Microeconomic Theory

Paper Code: 
24CECO 101
Credits: 
6
Contact Hours: 
90.00
Max. Marks: 
100.00
Objective: 

1. To introduce the basic concepts of microeconomics.

2. To help analyse consumer’s behaviour and producer’s behaviour.

3. To study the price determination of goods and factors in perfect and imperfect markets.

 

Course Outcomes: 

Course

Code

Course Title

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies 
   

24CECO 101

Microeconomic Theory

(Theory)

Students will:

CO1:analyze the theory of consumer behaviour, elasticity of demand and consumer’s surplus

CO2: examine theory of production, cost and revenue

CO3:analyze different aspects of perfect competition

CO4:evaluate different aspects of imperfect competition

CO 5:critically evaluate theory of factor price determination

CO6: contribute effectively in course-specific interaction.

Teaching Strategies: 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: 
Theory of Consumer Behaviour
  • Utility- Meaning & measurement, total and marginal utility, Law of diminishing marginal utility, Law of equi-marginal utility
  • Indifference curve- meaning and characteristics, Budget constraint, Consumer’s equilibrium
  • PCC, ICC, derivation of demand and Engel’s curves
  • Income, substitution and price effects (Hicksian Approach)
  • Elasticities of demand (price, income and cross price elasticity),
  • Consumer’s surplus

 

18.00
Unit II: 
Theory of Production and Cost
  • Production Function- total, average and marginal product curves, law of returns to variable factor, three stages of Production
  • Isoquant, Iso-cost line, Producer’s equilibrium, expansion path and ridge lines; laws of returns to scale
  • Cost - Concept, short-run cost curves, long-run cost curves, relationship between different cost curves
  • Concepts of TR, AR and MR under perfect and imperfect markets, relationship between AR, MR, TR and price elasticity of demand

 

18.00
Unit III: 
Perfect Competition
  • Characteristics of perfect competition
  • Demand and supply curves of firm in short and long run
  • Short –run equilibrium of firm (TR-TC and MR-MC approaches) and industry
  • Long-run equilibrium  of firm and industry

 

18.00
Unit IV: 
Theory of Imperfect Competition
  • Monopoly- Characteristics, short-run and long-run equilibrium
  • Monopolistic Competition- Characteristics, short-run and long-run equilibrium
  • Oligopoly-Characteristics, oligopoly problem, Price Rigidity and Kinked Demand model

 

18.00
Unit V: 
Theory of Factor Price Determination
  • Marginal productivity theory of distribution in perfect and imperfect competition
  • Theories of Rent - Ricardian theory& modern theory, concept of  quasi rent
  • Theories of Interest- Classical, Loanable funds and Liquidity preference
  • Theories of Profit- Innovation, Risk and Uncertainty

 

 

 

Essential Readings: 

Ahuja, H.L., Modern Microeconomics: Theory & Applications, S. Chand & Company, 19th Edition, 2022

 

References: 

Suggested Readings: 

  1. Koutsoyiannis, A., Modern Microeconomics, Macmillan, 2nd Edition, 2020
  2. Stonier, A.W. and D.C. Hague, A Textbook of Economics Theory, ELBS and Longman Group, 5th Edition, 2003

E- Resources:

  1. Steven A. Greenlaw, Principles of Microeconomics, Second Edition, OpenStax (2017)
  2. Dirk Mateer and Lee Coppock, Principles of Microeconomics, Third Edition, W. W. Norton & Company (2020)

Journals:

  1. American Economic Journal: Microeconomics, https://www.jstor.org/journal/aejmicreconomics
  2. Journal of Economics, https://www.springer.com/journal/712

 

Academic Session: 
2024-25
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