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Microeconomics

Level: Bachelor of Arts Full Marks: 100

Year: I Pass Marks: 40
Code: Econ.421 Teaching hrs. 150

Course objectives
After the complete of this course, students will be able to understand, explain and explore the concepts,
applications and tools of micro economics in theories of demand and supply, production and its related
laws, determination of price and output under various market structures, pricing of factors of production,
introductory knowledge of simple general equilibrium model and economic welfare.

Units Contents Hrs,

Central problems in economics.
Microeconomics: Concept, Types of micro
economic analysis: Static, Comparative static,
I: Introduction dynamics: Goals of microeconomic policy; 10
Efficiency and equity; Micro economic models:
Concepts, Assumptions and applications.
Distinction between micro economics and macro
economics
Demand: Law of demand, Demand function with
types, Movement and shift in demand curves,
Determinants of demand. Supply: Law of supply,
11: Theory of Demand and Supply function with types, Movement and shift 15
Supply in supply curves, Determinants of supply.
Elasticity of demand and supply, types and its
measurement (price, income and cross).
Utility analysis: Cardinal utility analysis:
Assumption, Consumer's equilibrium, criticisms;
Ordinal utility: Indifference curve and its
properties, Marginal rate of substitution, budget
line, Consumer' s equilibrium, Income
Ill: Consumer Behaviour consumption curve, Price consumption curve, 15
Price effect, Income effect and Substitution
effects for Normal, Neutral, Inferior and Giffen
goods; Decomposition of Price effect into Income
effect and Substitution effects (Hicks and Slutsky
approaclies), Derivation of ordinary demand
curve. Consumer's Surplus: Marshall's
measurement and measurement through IC.
Concept of production function, Production with a
single variable input -Law of variable proportion,
Production with two variable inputs; Isoquant;
IV: Producer Behaviour Marginal rate of technical substitution and 15-

elasticity of substitution, Expansion path and

return tp scales, Product transformation curve and

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 its properties, Producer's equilibrium.
Cobb-Douglas Production Function,
Different concept of costs: Total, Marginal, and
Average costs, Fixed and variable costs, Short run
V: Costs and Revenue and Long run cost curves, marginal cost curve,
Economics of scale and cost curves, shift in cost 15
curves.
Revenue: Concepts, Types, Relationship between
TR, AR, and MR in competitive and imperfect
markets.
Perfect competition: Concept and features, Short
VI: Price and Output and long run equilibrium in a competitive market; 10
Determination under Supply curve of a firm and industry in short and
Competitive Market long run; Change of technology and long riin
supply curve of industry.
A: Monopoly: Concepts and features. Price and
VII: Price and Output output determination in short and long run;
Determination under Markup pricing; Price discriminating monopolist;
Imperfect Degrees of price discriminatioii; Welfare cost of
Competition Market monopoly; multi-plant and bilateral monopolist; 25
8: Monopolistic competition: Concepts and
features; Price and output determination un`der
monopolistic competition in short and long run;
Excess capacity under monopolistic competition;
Monopolistic competition and role of advertising.
C: Concept ofduopoly and oligopoly markets.
A: Demand curve for single variable input and
VIII: Employment and several variable inputs in competitive inarket;
Pricing of lnputs in Input supply; Determination of equilibrium price
Competitive and of factors and employment, Effect of minimum
Imperfect wage laws on employment, Determiiiants of
Competition Markets employment. 25

8: Input demand and supply under monopoly and

monopsony markets; Deterinination of
equilibrium price of factors and employment,
Minimum wage laws and trade union,
Determinants of employment.
IX: Theory of Factor Rent: Modern theory.
Pricing Wage: Marginal Productivity Theory, Wage
differentials and its causes. 10
Interest: Loanble Fund Theory and Liquidity
Preference Theory.
Profit: Dynamic Theory and Innovation Theory.
X: General Equilibrium Partial and General Equilibrium Analysis;
and Welfare Efficiency in production, consumption and 10
product-mix; Concept of social welfare;
Compensation criteria; social welfare function
Total ^1 150

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 References

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