/Level: Bachelor of ArtsYear: ICode: Econ.421

Microeconomics

Full Marks: 100Pass Marks: 40Teaching hrs. 150

Course objectivesAfter the complete of this course, students will be able to understand, explain and explore the concepts,applications and tools of micro economics in theories of demand and supply, production and its relatedlaws, determination of price and output under various market structures, pricing of factors of production,introductory knowledge of simple general equilibrium model and economic welfare.

Units Contents Hrs,

I: Introduction

Central problems in economics.

10

Microeconomics: Concept, Types of microeconomic analysis: Static, Comparative static,dynamics: Goals of microeconomic policy;Efficiency and equity; Micro economic models:Concepts, Assumptions and applications.Distinction between micro economics and macroeconomics

11: Theory of Demand and

Demand: Law of demand, Demand function with

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types, Movement and shift in demand curves,Determinants of demand. Supply: Law of supply,Supply function with types, Movement and shift

Supply in supply curves, Determinants of supply.Elasticity of demand and supply, types and itsmeasurement (price, income and cross).

Ill: Consumer Behaviour

Utility analysis: Cardinal utility analysis:

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Assumption, Consumer's equilibrium, criticisms;Ordinal utility: Indifference curve and itsproperties, Marginal rate of substitution, budgetline, Consumer' s equilibrium, Incomeconsumption curve, Price consumption curve,Price effect, Income effect and Substitutioneffects for Normal, Neutral, Inferior and Giffengoods; Decomposition of Price effect into Incomeeffect and Substitution effects (Hicks and Slutskyapproaclies), Derivation of ordinary demandcurve. Consumer's Surplus: Marshall'smeasurement and measurement through IC.

IV: Producer Behaviour

Concept of production function, Production with a

15-

single variable input -Law of variable proportion,Production with two variable inputs; Isoquant;Marginal rate of technical substitution andelasticity of substitution, Expansion path andreturn tp scales, Product transformation curve and

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its properties, Producer's equilibrium.Cobb-Douglas Production Function,

V: Costs and Revenue

Different concept of costs: Total, Marginal, and

15

Average costs, Fixed and variable costs, Short runand Long run cost curves, marginal cost curve,Economics of scale and cost curves, shift in costcurves.Revenue: Concepts, Types, Relationship betweenTR, AR, and MR in competitive and imperfectmarkets.

VI: Price and OutputPerfect competition: Concept and features, Short

10and long run equilibrium in a competitive market;Determination under Supply curve of a firm and industry in short andCompetitive Market long run; Change of technology and long riin

supply curve of industry.

VII: Price and OutputA: Monopoly: Concepts and features. Price and

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output determination in short and long run;Determination under Markup pricing; Price discriminating monopolist;Imperfect Degrees of price discriminatioii; Welfare cost ofCompetition Market monopoly; multi-plant and bilateral monopolist;

8: Monopolistic competition: Concepts andfeatures; Price and output determination un`dermonopolistic competition in short and long run;Excess capacity under monopolistic competition;Monopolistic competition and role of advertising.C: Concept ofduopoly and oligopoly markets.

VIII: Employment andA: Demand curve for single variable input and

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several variable inputs in competitive inarket;Pricing of lnputs in Input supply; Determination of equilibrium priceCompetitive and of factors and employment, Effect of minimumImperfect wage laws on employment, Determiiiants ofCompetition Markets employment.

8: Input demand and supply under monopoly andmonopsony markets; Deterinination ofequilibrium price of factors and employment,Minimum wage laws and trade union,Determinants of employment.

IX: Theory of Factor Rent: Modern theory.

10Pricing Wage: Marginal Productivity Theory, Wage

differentials and its causes.Interest: Loanble Fund Theory and LiquidityPreference Theory.Profit: Dynamic Theory and Innovation Theory.

X: General Equilibrium Partial and General Equilibrium Analysis;10and Welfare Efficiency in production, consumption and

product-mix; Concept of social welfare;Compensation criteria; social welfare function

Total ^1 150

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References

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