BASIC MICROECONOMICS

2nd Semester, 2023-2024

Basic Microeconomics is an introductory course exploring individual agents'

behavior (consumers and firms) within various market environments. The course aims
to provide students with a solid foundation in core microeconomic principles, equipping
them with analytical tools to examine how individuals make decisions under conditions
of scarcity and interdependence.

Course Objectives:

The primary objectives of this course are as follows:

1. To introduce students to basic economic concepts such as scarcity, opportunity

cost, and marginal analysis.
2. To familiarize students with essential economic models like supply and demand,
utility maximization, and profit maximization.
3. To enable students to analyze market equilibria and price formation processes.
4. To develop students' understanding of market structures, including perfect
competition, monopolies, oligopolies, and externalities.
5. To enhance students' ability to apply microeconomic principles to real-life
situations and contemporary policy discussions.

Key Learning Areas:

Throughout the course, students will acquire knowledge and skills related to the
following topics:
1. Scarcity, opportunity cost, and marginal analysis – Understanding these
foundational concepts helps students appreciate the importance of resource
allocation and decision-making.

2. Supply and demand – Students learn about the law of demand and supply,
elasticity, and market equilibrium, which form the basis of many subsequent
analyses.

3. Consumer theory – This area focuses on utility maximization, budget

constraints, and consumer surplus, providing insights into consumer behavior
and preferences.

4. Producer theory – Students gain insight into firm behavior and efficiency
considerations by studying production functions, short-run and long-run costs,
and profit maximization.

5. Market structures – Analyzing different market structures allows students to

explore the implications of market power and government intervention.
 6. Factor markets – Investigating labor, capital, land, and rental markets provides
students with a comprehensive view of income distribution mechanisms.

7. Real-world applications – Applying microeconomic principles to real-life

examples enables students to better comprehend complex economic
phenomena and policies.

By mastering these key learning areas, students will be well-equipped to tackle

more advanced courses in economics or pursue careers where they can contribute
meaningfully to societal progress through informed economic decision-making

Course Outline:

Part I: Introduction to Microeconomics

1. Definition and scope of microeconomics
2. Basic economic concepts: scarcity, opportunity cost, and marginal analysis
3. Economic models and their applications

Part II: Supply and Demand

1. Law of demand and supply
2. The elasticity of demand and supply
3. Market equilibrium and its determinants
4. Price controls and their effects

Part III: Consumer Theory

1. Utility maximization and consumer choice
2. Budget constraints and indifference curves
3. Income and substitution effects
4. Market demand and consumer surplus

Part IV: Production and Costs

1. Production function and its properties
2. Short-run and long-run costs
3. Cost curves and their shapes
4. Profit maximization and perfect competition

Part V: Market Structures

1. Monopoly and monopolistic competition
2. Oligopoly and game theory
3. Price discrimination and its effects
4. Externalities and public goods
Part VI: Factor Markets
1. Labor market and wage determination
2. Capital market and interest rates
3. Land market and rent determination
4. Market power and income distribution

Part VII: Review and Applications (Subject to changes)

 Review of key concepts and theories
 Applications of microeconomics in real-world scenarios
 Current issues and debates in microeconomics

This course outline covers the fundamental concepts and theories of

microeconomics, including supply and demand, consumer theory, production and costs,
market structures, and factor markets. It also includes real-world applications and
current issues to help students understand the relevance of microeconomics in today's
society.