MICROECONOMIC THEORY - I

Paper Code: 
ECO 121
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

To acquaint the students with the behaviour of an economic agent, namely a consumer and a producer in a comparative static and partial equilibrium framework.

12.00
Unit I: 

Basic Concepts

Basic Economics Problems- Choice and       Scarcity; Deductive and Inductive Methods of  Analysis; Positive and Normative Economics;  Static and Dynamic Analysis; Partial vs. General Equilibrium Analysis;

Demand and Supply

Demand and supply curves; Elasticities of demand and supply; Market Mechanism; Changes in Market Equilibrium; Effects of Government Intervention-Price Controls.

12.00
Unit II: 
Theory of Consumer Behaviour I

Cardinal Utility Theory; Indifference Curves Theory-Price, Income and Substitution Effects (Normal, Inferior and Giffen goods).

12.00
Unit III: 
Theory of Consumer Behaviour II

Revealed Preference Hypothesis; Consumer Surplus- Meaning, Marshall’s Measurement of Consumer Surplus, Measurement of Consumer Surplus through indifference Curve Analysis, Critical Evaluation; Consumer behaviour under uncertainty and risk

12.00
Unit IV: 
Theory of Production & Costs

Production function – short run and long run;

Production with one variable input- Product curves;  Production with two variable inputs- Isoquants and Isocost lines; Law of variable proportions and returns to scale; Cobb-Douglas production functions ; Short run and long run cost curves; Economies of scale;

12.00
Unit V: 
Price and Output Determination- Perfect Competition and Monopoly

Perfect competition– short run and long run equilibrium of the firm and industry;

Monopoly – short run and long run equilibrium, price discrimination, welfare aspects, monopoly control and regulation

Essential Readings: 
  1. Koutsoyiannis, A. (1979), Modern Microeconomics, (2nd Edition), Macmillan Press, London.
  1. Pindyck, Robert S; Rubinfeld, Daniel L; Mehta, Prem L, Microeconomics(7th edition), Pearson Education (2009).
  1. Layard, P.R.G. and A.W. Walters (1978), Microeconomic Theory, McGraw Hill, New York.
  1. Kreps, David M. (1990), A Course in Microeconomic Theory, Princeton University Press, Princeton.
  1. Sen, A. (1999), Microeconomics: Theory and Applications, Oxford University Press, New Delhi.
  1. Stigler, G. (1996), Theory of Price, (4th Edition), Prentice Hall of India, New Delhi.
  1. Varian, H. (2000), Microeconomic Analysis, W.W. Norton, New York.
  1. Baumol, W.J. (1982), Economic Theory and Operations Analysis, Prentice Hall of India, New Delhi.
  1. Hirshleifer, J. and A. Glazer (1997), Price Theory and Applications, Prentice Hall of India, New Delhi.
  1. Da Costa, G.C. (1980), Production, Prices and Distribution, Tata McGraw Hill, New Delhi.
  1. Salvatore, Dominick (1991), Micro Economic Theory, McGraw Hill, New Delhi.
Academic Session: 
2015-16
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