Microeconomics is the study of individuals, households and firms’ behaviour in decision making and allocation of resources. It generally applies to markets of goods and services and deals with individual and economic issues.This course presents a rigorous treatment of the principles governing individual behaviour, market structure, and game theory.
Course objectives:
By the end of this course, the student is expected to be familiar with basic concepts of microeconomics and acquire analytical skills to analyses problems of economic policy. Besides, students should be able to demonstrate: (i) an understanding of relevant microeconomic concepts; (ii) a capacity to explain and evaluate critically theoretical arguments.
Syllabus:
Unit- 1 Theory of Consumer Behaviour
1.1.The Slutsky Equation- Compensated and Uncompensated Demand Function- Indirect
Utility Function- Ray’s Identity- Duality in Consumer Theory;
1.2.The Pragmatic Approach to Demand Theory ─ Constant Elasticity Demand Function
1.3.Dynamic Versions of Demand Function; Nerlove, Houthakker and Taylor-Linear
expenditure system.
1.4.Consumer Choices Involving Risk and Uncertainty, Time and Characteristics -Bernoulli
Hypothesis, Neumann and Morgenstern Index, Friedman and Savage hypothesis,
Markowitz hypothesis.
1.5. Inter-temporal Substitution effect- Choices Involving Time- Time Allocation model,Attributes model of Kevin Lancaster
1.6.Network Externalities ─ Bandwagon, Snob and Veblen Effects.
Unit- 2: Theory of Production and Cost Production Function
2.1. Homogenous and Non-Homogenous Production Functions –A brief account of Production
function of a single product firm- Production function of a multi-product firm (with illustration)
2.2. Empirical production functions – Cobb-Douglas Production Function – Constant Elasticity
Substitution Production Function—Variable Elasticity of Substitution (VES) Production
Function– Homothetic Production Function
2.3. A summary of Short- run and Long-run cost in Traditional and Modern Microeconomic
Theory (without illustration)
2.4. The L shape Scale curve- Engineering production function and Engineering cost curves
(with illustration). Learning Curve- Returns to Scope
Unit- 3: Oligopoly and Economic Behaviour of Firm
3.1. Oligopoly–Price and Output Determination; Collusive and Non-collusive oligopoly
3.2. A brief account of collusive Oligopoly (Cartels and Price Leadership)
3.3. Oligopoly with Homogeneous Product-Cournot, Bertrand & Stackelberg Model
3.4. Oligopoly with Non-homogeneous Product-Chamberlin’s model, Sweezy’s Kinked
Demand Curve. The Contestable Market Theory- Baumol
3.5. Theory of Games-Strategies – Zero-Sum Game & Non-Zero-Sum Game -Prisoner’s
Dilemma – Nash Equilibrium- Game Theory Applications – Important Issues in Game Theory
– Cooperation, Competition.
Unit- 4: Theories on Distribution
4.1. Marginal Productivity Theory and Product Exhaustion Problem: Euler’s-Clark-WicksteedWalras
4.2. Macro theories of distribution -Ricardo-Marx- Kalecki – Kaldor.
Reference:
1. A. Koutsoyiannis (1985): Modern Microeconomcis,2nd Ed, MacMillan Education
(Reprint).
2. Andreu Mas-Colell, Michael D. Whinston and Jerry R. Green (2005): Microeconomic
Theory, OUP.
3. Austan Goolsbee, Steven Levitt and Chad Syverson (2013): Microeconomics, Worth
Publishers
4. B. Douglas Bernheim and Michael D. Whinston (2016): Microeconomics, McGrawHill.
5. Christopher Snyder, Walter Nicholson and Robert Stewart (2015): Microeconomic
Theory: Basic Principles and Extensions, Cengage Learning.
6. David Besanko and Ronald R.Braeutigam (2014): Microeconomics, 4th Ed, John
Wiley and Sons, Inc.
7. Genaro C. da Costa (2005): Value and Distribution in Neoclassical and Classical
System, 2nd Ed, Himalaya Publishers, Mumbai.
8. Geoffrey A. Jehle and Philip J. Reny (2014): Advanced Microeconomic Theory 3rd
Ed, Prentice Hall.
9. Gibbons, R. (1992): Game Theory for applied economists, Princeton University Press.
10. Hal R. Varian (2014): Intermediate Microeconomics with Calculus,1st Ed, W. W.
Norton & Company.
11. Henderson, M. and R.E. Quandt (1989): Microeconomic Theory: Mathematical
Approach, 3rd Ed, McGraw Hill.
12. Jeffrey M. Perloff (2016): Microeconomics with Calculus, 3rd Ed, Pearson.
13. Judy A. Whitehead (2015): Microeconomic: A Global Text, Routledge.
14. Mike Rosser (2011): Microeconomics: The Firm and the Market Economy,
MacMillan
15. Robert Awh (2001): Microeconomics, John Wiley.
16. Robin Bade and Michael Parkin (2017): Foundations of Microeconomics, 7th Ed,
Pearson.
17. Saul Estrin, David Laidler and Michael Dietrich (2016): Microeconomics,5th Ed,
Prentice Hall
18. Snyder and Nicholson (2016): Microeconomic Theory: Basic Principles and
Extensions, 11th Ed, Pearson.
19. Steven E. Landsburg (2017): Price Theory and Applications,8th Ed. Cengage
Learning.
20. Thomas J Nechyba (2010): Microeconomics: An Intuitive Approach with Calculus 1stEdition, South Western Cengage Learning.
21. William A. McEachern (2017): Principles of Microeconomics, 4th Ed, Cengage
Learning.
22. Mas-Colell A, Whinston M and J. Green (2012): Microeconomic Theory, Oxford
University Press.
23. David M. Kreps, (1990) A Course in Microeconomic Theory, Princeton University
Press.
24. Broadway, R. W and N.Bruce (1984), Welfare Economics, Basil Blackwell, Oxford
