ECO-203 PRINCIPLES OF MICRO ECONOMICS

 COURSE DESCRIPTION/OBJECTIVE
This course is designed to introduce key microeconomics concepts and techniques applicable as
tools for rational economic decision-making within the micro framework. The course attempts to
demonstrate the relevance and usefulness of economic analysis to real world business situations.
Emphasis is placed on optimal decisions making within the firm and the strategic relationship
with other business.
The goal of the course is to provide an introduction to microeconomics. Using microeconomics
theory you will be able to understand price determination. Markets will be used extensively to
illustrate that firm behavior will be different dependent upon the structure of the market.
 INDENTED LEARNING OUTCOME

At the end of this course, students will be able to:

1. Describe the problem of scarcity
2. Explain the factors that determine demand and supply
3. Understand the concept of elasticity of demand and supply
4. Analyze the effect of market structure on firm behavior
5. Analyze efficiency and the role of government in promoting and deterring efficiency
6. Understand the concept of derived demand for labor and capital
7. Discuss the existence of impact of externalities
8. Examine income distribution and “fairness”

 PLAN OF EDUCATIONAL METHODOLOGY TO BE USED

Knowledge Skills

Lectures Multimedia presentations, group

discussions, Knowledge of Computer

Active Learning

 COURSE CONTENT
BASIC ECONOMIC CONCEPTS
Week 01,02
 Economics: Basic Themes and Nature
 Micro versus Macro Economics
 Positive versus Normative economics
 Basic economic problems
 Economics relevance to business organizations
 DEMAND AND SUPPLY ANALYSIS

 The demand function.

 Changes in demand.
Week 03,04
 The supply function.
 Changes in supply.
 Equilibrium of Supply & Demand
 Elasticity of demand/supply and its measurement.

APPROACHES TO UTILITY ANALYSIS

 Cardinal approach and consumer equilibrium.

Week 05,06
 Ordinal approach and consumer equilibrium.
 Price, Income and Substitution effects on consumer
equilibrium.

PRODUCTION ANALYSIS

 Basic production concepts.

 Total, Average and Marginal Product
 Returns to scale.
Week 07,08
 Short-run and long-run production.
 Least-cost factor combination.
 Producer equilibrium.

COST AND REVENUE ANALYSIS

 Various cost concepts.

 The cost of production: Short-run cost, long-run cost.
Week 09,10  Revenue and revenue curves: Total, average and marginal
revenues.
 Profit-Maximization

MARKET STRUCTURES AND PRICING

Week 11,12
 Market and its forms.
 Price and out-put under perfect competition.
 Price and out-put under monopoly, duopoly, oligopoly and
monopolistic competition.
 RESOURCE ALLOCATION

Week 13,14
 The theory of Marginal Productivity.
 Market demand for resources.

Week 15 Project/Revision

 ASSESSMENT CRITERIA

Total # In a
Nature % Weight
Semester

Quiz 8-10 10%

Sessional Exam
Assignment 4-6 10%

Mid Term 1-2 30%

Final Exam End Term Exam 50%

 TEXT BOOKS.
o Dr. Muhammad Hussain Choudhry, Economic Theory Volume 1, Caravan Book House,
Lahore 2002.
o Mc Connell & Brue, Economic 15th Edition., Mc Graw Hill, INC
o Samuelson and Nordhaus, Economics, 16th Edition, New Delhi, Tata McGraw Hill,
1987.
 REFERENCE BOOKS.

o Ruffin and Gregory, Principles of Economics 2nd Edition, Illionois: Scott Foresman and
Company, 1983.
o Scott and Nigro: Principles of Economics 2nd Edition, New York; Macmillan Publishing
Co., Inc., 1982.

o David M. Winch, Micro Economics: Problems and Solutions, Oxford University

Press.