Punjab Group of CollegesPrinciples of Microeconomics

ECON 2003

ProgramBachelors in Business Administration

Credit Hours3

Duration16 Weeks / 32 sessions

PrerequisitesN/A

Resource Person

Course DescriptionThe course would focus on understanding the main concepts of Microeconomics and functioning of the market system as a mechanism for resource allocation. For this purpose selected market structures would be studied. The students would also be exposed to the analysis of government policies such as taxes and control on prices to understand their effect on allocation of resources. The situation of government intervention in the market would also be examined when Externalities cause market failures. Various market structures would also be studied to understand the conditions of the market equilibrium in the short-run and the long-run.Course Objectives

After studying the course the students will be able to.1. Understand basic concepts of the Microeconomics.

2. Apply tools of demand and supply for efficient resource allocation and profit maximization.

3. Identify core economic issues related to business firms.

4. Comprehend the benefits of market efficiency.

5. Analyze decision making process at individual and firm level.

6. Differentiate the behavior of firms under different market conditions.

Learning Objectives

After studying this course the students should be able to:

Understand basic principles of Microeconomics governing their daily lives Apply the skills learned through this course in analyzing and expecting in market outcomes under certain conditions (for example change in taxes) Find opportunities and manage challenges offered by the market mechanisms as buyers as well as sellersViolation of Academic Honesty Policy:

If any two projects/assignments are identical or partially identical, a zero will be awarded. The repetition of such kind may lead to an F grade in the course.

How to Keep Your Professor Happy:

Class attendance is mandatory. You may miss up to 6 class sessions. On the seventh absence, you will be withdrawn from the course. As a courtesy to the instructor and other students, be prepared to arrive at class and be in your seat on time. In addition, please note that each class lasts for 90 minutes.

Also keep in mind some general rules as given below:

Cell phones should be powered off or be kept in silent mode during class timings.

Eatables are not allowed in the classroom.

Any disruptive behavior during the lecture will not be tolerated.

The Dress Code has to be observed, no warnings will be given, and violators will be asked politely to leave the class and consequently will be marked absent.

Participation:

Students are required to attend all classes and are urged read all the assigned material in advance of class (although not necessarily with perfect comprehension). Advanced preparation and class participation are crucial for periods in which we discuss cases. During discussion sessions, the instructor generally keeps track of the insightful and useful comments students make, therefore, do not hesitate to contribute in this regard. (Any unproductive contribution shall not be rewarded)

Assessment and Evaluation

Exam TypePercentage (%)

Quizzes10

Assignments10

Class Participation10

Mid Term30

Final Term40

Total points100

Recommended Text

Course PackCalendar of activities WeekContentsTasks/ Activities

1The Principles of Economics

How People Make Decisions How People Interact

How the Economy as a Whole Works

Conclusion

2

The Market Forces of Supply and Demand Markets and Competition

Demand

Supply

Supply and Demand Together

Conclusion: How Prices Allocate Resources

3Elasticity and Its Application The Elasticity of Demand The Elasticity of Supply Three Applications of Supply, Demand, and Elasticity ConclusionAssignment 1

4 Supply, Demand, and Government Policies Controls on Prices Taxes

ConclusionQuiz 1

5Consumer, Producer, and the Efficiency of Markets Consumer Surplus

Producer Surplus

Market Efficiency

Conclusion: Market Efficiency and Market Failure

6Application: The Costs of Taxation

The Deadweight Loss of Taxation The Determinants of the Deadweight Loss Deadweight Loss and Tax Revenue as Taxes Vary Conclusion

7Externalities

Externalities and Market Inefficiency Private Solutions to Externalities

Public Policies Towards Externalities

Conclusion

8Mid- Term

9Public Goods and Common Resources

The Different Kind of Goods Public Goods

Common Resources

Conclusion: The Importance of Property Rights

10The Design of the Tax System A Financial Overview of the U.S. Government Taxes and Efficiency Taxes and Equity Conclusion: The Tradeoff between Equity and EfficiencyAssignment 2

11

The Cost of Production What are Costs? Production and Costs The Various Measures of Cost

Costs in the Short Run and in the Long Run

Conclusion

12

Firms in Competitive Markets What is a Competitive Market? Profit Maximization and the Competitive Firms Supply Curve The Supply Curve in a Competitive Market Conclusion: Behind the Supply Curve

13Monopoly Why Monopolies Arise How Monopolies Make Production and Pricing Decisions The Welfare Cost of Monopoly Public Policies toward Monopolies Price Discrimination

Conclusion: The Prevalence of MonopolyQUIZ-2

14Oligopoly

Between Monopoly and Perfect Competition

Markets with Only A Few Sellers

Game Theory and the Economics of Cooperation

Public Policies Toward Oligopolies

Conclusion

15Monopolistic Competition

Competition with Differentiated Products Advertising

Conclusion

16The Theory of Consumer Choice The Budget Constraint: What the Consumer can Afford Preferences: What the Consumer Wants

Optimization: What the Consumer Chooses

Four Applications

Conclusion: Do People Really Think This Way?

17Final Term