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11 views10 pages

Course Outlines

Uploaded by

mereraeshetu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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WEL-COME

Microeconomics for Management

Oct ,,2023
1 AAU
FIKADU ABERA [email protected]
• Course Competency:
• Enables the you to make economic analysis & interpretation
from firms & households‟ perspective
• Course Description
• These courses cover theories of;
• consumer behaviour, producer behaviour and theories of market
structure, perfect competition, monopoly, monopolistic competition
and oligopoly), choice under uncertainty, game theory
• It begins presenting the assumptions underlying each theory;
• it proceeds on analysing the behaviour of economic unit (the
consumer or producer) in an attempt to meet its objective and
finding the equilibrium of these economic units.

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Chapter 1:
Theory of Consumer Behavior and demand (9 Hours)
• 1.1. Consumer Preferences and Choices
• 1.2. Approaches to measure Utility
• 1.2.1. Assumptions of Cardinal Utility theory
• 1.2.2. Law of diminishing marginal Utility (LDMU)
• 1.2.3. Derivation of the Cardinalist Demand
• 1.3. The Ordinal Utility Approach
• 1.3.1. Assumptions of Ordinal Utility approach
• 1.3.2. Indifference Set, Curve and Map
• 1.3.3. Properties of Indifference Curves
• 1.3.4. The Marginal rate of substitution (MRS)
• 1.4. The Budget Line or the Price line
• 1.4.1. Factors Affecting the Budget Line
• 1.4.1.1. Effects of changes in income
• 1.4.1.2. Effects of Changes in Price
• 1.5. Optimum of the Consumer
• 1.5.1. Effects of Changes in Income and Prices on Consumer optimum
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Chapter 2: The Theory of Production and (5 hr)
3.1 Revision on short run Production
3.2. The long run Production
3.2.1. Laws of returns to scale
3.3. Choice of optimal combination of factors of production
Chapter 3: The Theory of Cost (5 hrs)
4.1. Revising Short-run Cost
4.2. Long-Run Costs
4.3.1. Derivation of Cost Functions from Production functions
4.3.2. Dynamic Changes in Costs- the Learning Curve
4.3. Revising Short-run Cost
4.3. Long-Run Costs
4.3.1. Derivation of Cost Functions from Production functions
4.3.2. Dynamic Changes in Costs- the Learning Curve
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Chapter 4: Perfect Competition Market (5 hours)
5.1 The Short-Run Equilibrium of the Firm and industry
5.2. Market Equilibrium
5.3. The Long-Run Equilibrium of the Firm and industry
Chapter 5: Pure Monopoly Market (6 hrs)
5.1. Characteristics and source of monopoly
5.2. Short Run and Long-Run Equilibrium
5.3. Price discrimination
5.4. Multi-Plant Monopolist

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Chapter 6: Monopolistic Competition (5 hrs)

7.1. Assumptions
7.2. Product Differentiation, the demand curve and cost of
the firm
7.3. The Concept of Industry and product ‘group’
7.4. Short-run and long-run equilibrium of the firm

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Chapter 7: Oligopoly (6 hrs)
8.1. Non Collusive Oligopoly
8.1.1. Cournot’s Duopoly Model
8.1.2. The Kinked Demand Model
8.1.3. Bertrand’s Duopoly Model
8.1.4. Stackelberg’s Duopoly Model
8.2. Collusive Oligopoly
8.2.1. Cartels
8.2.1.1. Cartels Aiming at Joint Profit Maximization
8.2.1.2. Market Sharing Cartel
8.2.2. Price Leadership
8.2.2.1. The Low Cost Price Leader
8.2.2.2. The Dominant Firm

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Chapter 8: Game Theory (4 hrs)
8.3.1. Dominant Strategy Equilibrium
8.3.2 Nash Equilibrium
8.3.2 Mixed Strategy Equilibrium
8.3.4. Prisoner’s Dilemma
8.3.5. Repeated Games and Enforcing a Cartel
8.3.6. Sequential Game

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Chapter 9: The Economics of
Information (3 hrs)

• 2.1.. Introduction
• 2.2. Measuring Risk
• 2.3. Risk Management

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References
1. A. Koutsoyiannis, Modern Microeconomics
2. D.N.Dwivedi, 1997, Micro Economic Theory, 3rd Ed., Vikas
Publishing
3. R.S. Pindyck & D.L. Rubinfeld, Microeconomics.
4. Hal R. Varian, Intermediate Microeconomics: A Modern
Approach, 6th Ed.
5. C.L.Cole, Micro Economics: A Contemporary Approach.
6. Ferguson & Gould’s, 1989, Microeconomic Theory, 6th Ed.
7. R.R. Barthwal, Microeconomic Analysis.
8. E. Mansfield, Microeconomics: Theory and Applications.
9. D.S. Watson, Price Theory & Its Uses.

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