MICROECONOMIC THEORY - I

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

Course Objectives:

The objectives of this course are-

 

  1. To acquaint the students with the optimization behaviour of consumers, particularly under risk and uncertainty and asymmetric information.
  2. To Help students understand optimizing behaviour of a firm and acquaint them with the use of the concepts of economies of scale, economies of scope and learning curve.
  3. To help students to understand the determination of price and output under perfect competition and the effects of various taxes under perfect competition.

 

Course Outcomes (COs):

Course

Outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

Paper Code

Paper Title

 

ECO 121

 Microeconomic Theory –I

CO1: Acquire knowledge of basic concept of microeconomics.

CO2: Develop a sound understanding of the core concepts that economists use to understand the behaviour of consumers, producers and firms.

Approach in teaching: Interactive Lectures, Discussion,  Case studies.

 

Learning activities for the students:

Presentations, Assignments and Group discussions.

Class activity, Assignments, Quiz and  Semester end examinations.

 

12.00
Unit I: 
Theory of Consumer Behaviour-I

Cardinal Utility Analysis; Indifference Curve Analysis, Goods, Bads and Neuters, Consumer’s Equilibrium, Corner Solution, Slutsky Equation-Price, Income and Substitution Effects (Normal, Inferior and Giffen goods), ICC Curve, PCC Curve, Demand Curve- Ordinary and Compensated, Engel Curve, Elasticity of demand.

12.00
Unit II: 
Theory of Consumer Behaviour-II

Network Externalities- Bandwagon, Snob and Veblen effects, Consumer Surplus- Marshall’s Measurement, Measurement of Consumer Surplus through Indifference Curve; Revealed Preference Hypothesis; Analysis of consumer behavior under risk and uncertainty; Asymmetric information, Behavioral Economics.

12.00
Unit III: 
Theory of Production

Production function – short run and long run; Law of variable proportions Isoquants and Isocost lines;  Optimum Factor Combination, Expansion Path, Ridge Lines, returns to scale; Cobb-Douglas production function, Elasticity of Substitution, Euler's theorem , Technical Progress-Capital Deepening and Labour Deepening.

12.00
Unit IV: 
Theory of Cost

Cost Concepts, Short run and long run cost  curves; Modern Theory of Cost, Economies of scale; Economies of Scope and Learning curve analysis. 

Unit V: 
Price and Output Determination under Perfect Competition

Short run and long run equilibrium of the firm and industry, increasing, decreasing and constant cost industry, effects of taxes under perfect competition.

Essential Readings: 
  1. Koutsoyiannis, A., Modern Microeconomics, 2nd Edition, Macmillan, 2008. .
  1. Pindyck, Robert S., Rubinfeld, Daniel L. and Mehta, Prem L., Microeconomics, Pearson Education, 2009.
  1. Varian, Hal R., Intermediate Microeconomics – A Modern Approach, W.W. Norton, 2014.
  1. Salvatore, Dominick, Microeconomics: Theory and Application, Oxford University Press, 2008.

 

Academic Session: 
2020-21
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