Course Instructor:  

           Muhammad Umer Saeed

Email Address:             usaeed@iba.edu.pk
Office Hours   :           Friday and Saturday 4 pm - 5 pm (PhD Room, Main Campus)
Course description: Welcome to Principles of Microeconomics! We are going to cover a wide
range of topics in microeconomics this term, so this should be an exciting course–the idea is to
introduce you to the field of microeconomics and how economists think about the world. The
basic idea of microeconomics is to explain and analyze the motivations, and consequences of
individuals and firms’ behaviors. We will examine resource allocation, consumer demand,
demand and supply, the strengths and weaknesses of a market system, the role of government in
markets, production, and industry structures.
Learning Goals: I hope this course can help you to:

 gain fundamental knowledge of microeconomics:

 understand and be able to use microeconomic terminology

 understand the concept of opportunity cost
 understand human behavior in a world of scarcity
 understand how prices affect production and consumption decision
 understand how government policies affect resource allocation
 understand how market structures affect resource allocation

 apply this knowledge to:

o use microeconomic principles to understand current economic events
o use game theory to understand and explain strategic choices
o critique the economic content of articles or presentations
o use economic reasoning in your personal decision making

Grading:
Mid-term exam: 25%
Final exam: 45%
Assignments: 15%
Quizzes: 15%
Topics List:
Reading
List of topics Details of topics
reference

Week 1 The Principles Economic Agents and Economic Resources Unit 1 of

and Practice textbook
of Economics Definition of Economics
 Positive Economics and Normative
Economics
Microeconomics and Macroeconomics
Capitalism, causation and history’s hockey
stick
Three Principles of Economics
Optimization, Equilibrium and Empiricism
Is Economics Good for You?

Models and Data Unit 2 of

textbook
An Economic Model
Economic
Methods and Causation versus Correlation
Week 2
Economic Economic Questions and Answers
Questions
Constructing and Interpreting
Charts and Graphs

Choosing the Best Feasible Option Unit 3 of

Optimization: textbook
Doing Do People Really Optimize?
Week 3
the Best You Optimization Using Marginal Analysis
Can
Evidence-Based examples

Week 4 & Demand, Competitive Markets Unit 4 of

5 Supply, and textbook
Demand Curves
Equilibrium
Willingness to Pay
From Individual Demand Curves to
Aggregated Demand Curves
Building the Market Demand Curve
Shifting the Demand Curve
Supply Curves
Willingness to Accept
From the Individual Supply Curve to the
 Market Supply Curve
Shifting the Supply Curve
Curve Shifting in Competitive Equilibrium

The Buyer’s problem Unit 5 of

textbook
Price Changes

Consumers Income Changes

Week 6 and From the Buyer’s Problem to the Demand
Incentives Curve
Consumer Surplus
Demand Elasticities

Sellers in a Perfectly Competitive Market Unit 6 of

textbook
The Seller’s Problem
From the Seller’s Problem to the Supply
Sellers and Curve
Week 7
Incentives Producer Surplus
From the Short Run to the Long Run
From the Firm to the Market: Long-Run
Competitive Equilibrium

Unit 7 of
textbook

Perfect Competition and Efficiency

Perfect Extending the Reach of the Invisible Hand:

Competition From the Individual to the Firm
Week 8 and the Allocation of Resources Across Industries
Invisible
Hand Prices Guide the Invisible Hand
Equity and Efficiency
 Unit 8 of
The Production Possibilities Curve textbook

The Basis for Trade: Comparative Advantage

Week 9 Trade Trade Between States
Trade Between Countries
Arguments Against Free Trade

The Competitive Labor Market Unit 11 of

textbook
The Supply of Labor: Your Labor-Leisure
Markets for Trade-off
Week 10 Factors
of Production Wage Inequality
The Market for Other Factors of Production:
Physical Capital and Land

The Monopolist’s Problem Unit 12 and

14 of
Choosing the Optimal Quantity and Price textbook
Monopoly,
Week 11 Oligopoly and The Cost of Monopoly
& 12 Monopolistic Oligopoly
Competition
Monopolistic Competition
Summing Up: Four Market Structures

Modeling Time and Risk Unit 15 of

textbook
Trade-offs The Time Value of Money
Involving
Week 13 Time Preferences
Time and
Risk Probability and Risk
Risk Preferences

Week 14 Game Theory Simultaneous-Move Games Unit 13 of

and textbook
Nash Equilibrium
Strategic Play
Applications of Nash Equilibria
How Do People Actually Play Such Games?
 Extensive-Form Games

Textbook:
Daron Acemoglu, David Laibson and John List, Microeconomics, 2nd edition, Pearson, 2018.
Additional resources:
Mankiw, N. Gregory. Principles of Microeconomics. 8th ed., CENGAGE Learning Custom
Publishing, 2016.
Microeconomics, 22nd Edition by Campbell McConnell and Stanley Brue and Sean Flynn