Annexure ‘CD – 01’

L T P/ SW/ No. TOTAL

Course Title: Principles of Microeconomics Credit Units: 5
S FW of CREDIT
PS UNITS
Course Level: UG Course Code: ECON151 DA
Generated
4 1 - 2 3 6
Course Objectives: The course aims at familiarizing the students with the basic concepts of Microeconomics. The course puts emphasis on illustrating
how microeconomic concepts can be applied to analyze real-life situation
Pre-requisites: NIL

Course Contents/Syllabus: Weightage

(%)
Module I Introduction 15
Problem of scarcity and choice: scarcity, choice and opportunity cost; production possibility frontier; economic systems. Demand and supply:
law of demand, determinants of demand, shifts of demand versus movements along a demand curve, market demand, law of supply,
determinants of supply, shifts of supply versus movements along a supply curve, market supply, market equilibrium. Applications of demand
and supply: price rationing, price floors, consumer surplus, producer surplus. Elasticity: price elasticity of demand, calculating elasticity,
determinants of price elasticity, other elasticities.

Module II Consumer Theory 15

Budget constraint, concept of utility, diminishing marginal utility, Diamond-water paradox,
income and substitution effects; consumer choice: indifference curves,
derivation of demand curve from indifference curve and budget constraint.
Theory of Revealed Preference
Module III Production and Costs: 15
a. Production: behaviour of profit maximizing firms, production process,
Production functions, law of variable proportions, choice of technology, isoquant and isocost lines,
cost minimizing equlibrium condition.
b. Costs: costs in the short run, costs in the long run, revenue and profit maximizations, minimizing losses,
short run industry supply curve, economies and diseconomies of scale, long run adjustments.
 Module IV Market Structures 15
a. Perfect Competition: Assumptions: theory of a firm under perfect competition, demand and revenue,
equilibrium of the firm in the short run and long run; long run industry supply curve: increasing, decreasing and constant cost industries.
Welfare: allocative efficiency under perfect competition.
b. Imperfect Competition
Monopolistic competition: Assumptions, SR& LR price and output determinations under monopolistic competition,
economic efficiency and resource allocation.
oligopoly: assumptions, oligopoly models, game theory, contestable markets, role of government.
Module V Theory of a Monopoly Firm 10
Concept of imperfect competition; short run and long run price and output decisions of a monopoly firm,
concept of a supply curve under monopoly; comparison of perfect competition and monopoly, social cost of monopoly, price discrimination.
remedies for monopoly: Antitrust laws, natural monopoly.
Module VI Consumer and Producer Theory 10
a. Consumer and Producer Theory in Action
Externalities, marginal cost pricing, internalising externalities, public goods; imperfect information: adverse selection, moral hazard, social
choice, government inefficiency.
b. Markets and Market Failure
Market adjustment to changes in demand, efficiency of perfect competition, sources of market failure: imperfect markets, public goods,
externalities, imperfect information; evaluating the market mechanism.
Module VI I Income Distribution and Factor pricing 10
Input markets: demand for inputs; labour markets, land markets, profit maximization condition in input markets,
input demand curves, distribution of Income.
Module VIII Welfare Economics 10
Concept & Definition of Welfare Economics. Normative &Positive Economics.
Concepts of Social Welfare. Role of Value Judgment in Welfare Economics,
Individual & Social Welfare. Pareto Optimality, Conditions of Pareto Optimality.
New Welfare Economics: Kaldor-Hicks Welfare Criterion.
Scitovsky Paradox & Scitovsky’s Double Criterion.
Grand Utility Possibility Frontier. Social Welfare Function. Theories of Social Choice.

Course Learning Outcomes: After completing the course successfully, the students will:

1. Describe basic concepts of microeconomics such as laws of demand and supply and elasticity etc so that they can comprehend them & apply in day
today happenings.
2. Describe and apply the methods for analyzing consumer behavior through demand and supply, elasticity and marginal utility.
3. Compare short run & long run production function
4. Differentiate various market structures
 5. Examine the comparison between the Traditional and modern theory of cost.
6. Apply Indifference curve analysis in deriving demand curves, price effect, income effect and substitution effect.
7. Analyze the behavioral patterns of different economic agents regarding profit, price, cost etc.
8. Evaluate Theories of Social Choice and the concepts of welfare economics
9. Evaluate various market structures and their importance in present competitive environment
.

Pedagogy for Course Delivery: The class will be taught using lecture method in blended mode using the four-quadrant approach and class participation will
be encouraged. Conceptual understanding will be developed by the student at his own pace through online material provided in advance on LMS. Application
of the concepts in the current scenario will be discussed in the class. Self-work will be an integral part of curriculum and students will be asked to give
presentations in groups, make projects and do case base analysis on related applied topics.

List of Professional Skill Development Activities (PSDA):

i. Home Assignment on Government Regulation and Control of Monopoly and examples of government intervention
ii. Preparing a brief report on pricing strategies of any one firm in real world
iii. Writing an essay on demand for goods of any type of products

Lab/ Practicals details, if applicable:

NA

Assessment/ Examination Scheme:

Theory L/T (%) Lab/Practical/Studio (%)

100 _

Theory Assessment (L&T):

Continuous Assessment/Internal Assessment End Term
(40%) Examination
(60%)
Components (Drop
down) Class Test Project Presentation Attendance

Linkage of PSDA with PSDA i, ii PSDA iii

Internal Assessment
Component, if any
 Linkage with CLOs CLO 1,2,3,4,5,6 CLO 5,7,8 CLO 3,4,5,6
Weightage (%) 10 10 15 5 60%

Suggested Readings:
1. Ahuja ,H.L(2013) : Advanced Economic Theory”, S.Chand & Company.
2. Shastri,Rahul.A (1999) :Microeconomics”, Orient Blackswan.
2. Ahuja,H.L (2012) :Ucchatar Arthik Siddhant”, S.Chand & Company, New Delhi.
3. Dwivedi,D.N (2011) :Microeconomics-Theory & Applications”, Pearson.
4. Lal, S.N (2013):Arthshastra Ke Siddhant”, Shiva Publishing House, Allahabad. Seth,M.L
(2012) : Arthshastra Ke Siddhant”,Laxmi Narayan Publications,Agra
5. Lipsey,Richard&Chrystal,Alec (2011) : Economics”, Oxford University Press Publications,
New Delhi.
6. Pindyck,Robert.S., Rubinfield.Daniel.L., Mehta.Prem.L(2009): Microeconomics”, Pear son.
7. Salvatore, Dominic(2010) : Principles of Microeconomics”, Oxford University Press Publications,New Delhi.
8. Samuelson,Paul.A& Nordhaus, William.D(2010): Economics”, Tata McGraw Hill.
9. Stonier,A.W&Hague.Douglas.C (2003)(5thed) : A Text Book of Economic Theory”, Pearson.

References:

1. Koutsoyiannis, Modern Microeconomics, Macmillan.

2. Karl E. Case and Ray C. Fair, Principles of Economics, Pearson Education Inc., 8th Edition, 2007.
3. N. Gregory Mankiw, Economics: Principles and Applications, India edition by South Western, a part of Cengage Learning, Cengage Learning India
Private Limited, 4th edition, 2007.
4. Joseph E. Stiglitz and Carl E. Walsh, Economics, W.W. Norton & Company, Inc., New York, International Student Edition, 4th Edition, 2007.
5. Hal R. Varian, Intermediate Microeconomics, a Modern Approach, W.W. Norton and Company/Affiliated East-West Press (India), 8th edition, 2010.
The workbook by Varian and Bergstrom may be used for problems.
6. C. Snyder and W. Nicholson, Fundamentals of Microeconomics, Cengage Learning (India), 2010.
7. B. Douglas Bernheim and Michael D. Whinston, Microeconomics, Tata McGraw- Hill (India), 2009.