Annexure ‘CD – 01’

Course Title: Micro Economic Theory

Course Code: ECON628 L T P/ SW/F PSDA TOTAL CREDIT UNITS
Credit Units: 6 S W
Level: PG Prerequisites: NIL
4 0 0 4SW 3 6
Course Objectives:
The main objective of the course is to provide knowledge of various theories and concepts
of Micro-economics that can be applied to relevant specialization areas in economics

Course Contents/Syllabus:
Module I Theory of Consumer Behaviour Weightage
Preferences and Utility; Indifference Curves and MRS; Utility functions; Consumer’s optimum choice, income and substitution 25%
effects ( Hicks and Slutsky), ordinary and compensated demand curves, inferior goods
and Giffen goods, price consumption and income consumption curves,)
augmented learning on: Revealed Preference Hypothesis (weak axiom and substitution)
interactive session on: Consumer Surplus Market demand: Derivation Of Market Demand,
Determinants Of Demand, Elasticities Of Demand

Self-work : Kinds of inferior goods, Compensated Demand Curves

Module II Theory of Cost, Revenue and Production

Theory of cost: Traditional and Modern, Iso-cost line cost minimization and expansion path of linear homogenous Production 20%
Function, Effect of changes in factor prices: factor substitution, substitute and complementary factors Laws of production:
Returns to scale, law of variable proportion, economies of scale, Technological progress and production function,
Graphical derivation of cost curves from the production function, Production Possibility Curve of a firm
Production Function: Cobb Douglas, self- work on: CES
Elasticity of Supply
Cases on real world examples of business models with least or no fixed cost

Module III Price and output determination in Various Market Structures

Interactive session on: Perfect Market structures: Short and long run equilibrium, shutting down in short run, long run equilibrium, 35%
Monopoly Market structures: Multiplant firm, price discrimination and effects of price discrimination, price discrimination and
elasticity of demand, group discussion on: Government regulated Monopoly, degree of monopoly power
Oligopoly Market structures: Non-collusive and collusive oligopoly, classical models of oligopoly (Cournot’s, Duopoly, Bertrand’s
duopoly, Edgeworth duopoly and Stackelberg model), Chamberlin’s oligopoly model, Sales Maximization model of Oligopoly and
Cases on real world examples

Monopolistic Market structures: price and output determination, long run and short run equilibrium of a firm in monopolistic
competition, comparing with perfect competition, economic efficiency, Chamberlin’s theory of Monopolistic competition

At least 2 case study discussions on current scenario of market.

Self-work: Consumer and firm behavior with respect to various market structures, drawing similarities of various oligopoly
and monopolistic market structure theories in the real word.

Module IV Welfare Economics

Utility Possibility Frontiers – Kaldor – Hicks criterion, Scivtovsky Paradox, compensation principle, 20%
Augmented learning on: Berguson – Samuelson social Welfare Function, Arrow’ impossibility Theorem

Self- work : Preparing report after reviewing some articles dealing with welfare economics
.

Student Learning Outcomes:

After completion of the course the Students would learn to:
1. Comprehend basic concepts of consumer theory and consumer behaviour with respect to the present real world situation
2. Translate the basic concepts of choice to be used in various policy making
3. Identify the shutdown point of firms, degree of monopoly power and behaviour of firms in imperfect competitions
4. Analyze price and output decisions of a firm in various market structures
5. Analyze and Evaluate the welfare principles and their applicability
6. Apply concepts of total fixed cost, total variable cost, average fixed cost, average variable cost, average total cost and marginal cost in case of one-
variable production function, plot total revenue, average revenue, marginal revenue and price

PSDA:

1. Project on current market scenario in India (customized topics, project to be submitted for internal assessment)
2. Group discussion on welfare economics (6 students per group, different topics)
3. Group presentations on assigned areas (3 per group)
Pedagogy for Course Delivery:
Four Quadrant Approach will be used so that students can learn the basic concepts and their application in an interactive manner and through continuous
engagement in learning process. Case-studies discussion & Practical problem solution will also be a part of Teaching -Learning Process. Quizzes,
presentations, Home assignments and Group Discussions on relevant topics will ensure continuous students’ participation.

Assessment/ Examination Scheme:

Theory L/T (%) Lab/Practical/Studio (%) End Term Examination

100% NA 70%

Theory Assessment (L&T):

Continuous Assessment/Internal Assessment End Term Examination

Components (Drop
down) Project Attendance
Mid-Term Exam Group Presentation Home Assignment

Linkage of PSDA with PSDA 1

Internal Assessment
Component, if any PSDA3 PSDA1

Weightage (%) 15% 5

10% 10% 10% 50%

Mapping
 Bloom’s Level > Comprehend Translate Identify Analyze Evaluate Apply
Course Learning CLO1 CLO2 CLO3 CLO4 CLO5 CLO6
Outcomes

Assessment type/PSDA

√ √ √ √

Mid term

Group √ √ √ √
Presentation

Home Assignment √ √ √

Project √ √ √ √

Text Reading:
Hall Ferguson, ‘Microeconomic Theory’, Cambridge University Press
Salvatore D. 2003 Micro economics; Theory and Applications, Oxford University Press, New Delhi
Perloff, J.M. 2001: Microeconomics, Addison Wisely Longman, India
Pindyck R.S. and Rubinfield, D. L. 1999, Microeconomics, Prentice Hall of India

References:
W.S. Baumol, ‘Economic Theory And Operational Analysis’, Prentice Hall of India, New Delhi
A.K. Koutsoyiannis, ‘Modern Microeconomics’, Macmillan
Press P.K.Dutta (1999) Strategies and Games: Theories and Practices, MIT Press Formsom and Gould – Microeconomic Theory
Sen A.K. 1999, Microeconomics – Theory and Applications, Oxford University Press, New Delhi