B.A.
Honours Business Economics
Generic Elective Courses
GE: Principles of Microeconomics
Course Title Credits Credit distribution of the course Eligibility Pre-
and Code Lecture Tutorial Practical/Practice Criteria requisite of
the course
Principles of 4 3 1 0 Class XII None
Microeconomics
Learning Objectives
This course aims to:
(i) develop a theoretical understanding of strategic behaviour of economic agents and functioning of a market
economy through demand and supply
(ii) offer understanding of the basic principles of micro economics like problem of scarcity and choice,
elasticity, optimisation of resources
(iii) introduce students with concepts of consumer theory, production and cost, analysis of individual choices
(iv) equilibrium outcomes and how they are determined by changing market and social conditions
(v) impart sufficient examples based on real economy from both local and global perspective.
(vi) offer sound knowledge and skill to use the managerial economics concepts and techniques for effective
management planning, evaluating performance and making decisions.
Learning Outcomes
By studying this course, students will be able to:
(i) to assess the economic analysis method, with reference to cost-benefit analysis of private and public actions.
(ii) compare and contrast production and cost in short run and long run
(iii) to identify and evaluate various models of different markets, and the price and output decisions for
maximizing profit
(iv) understand the links between household and firm behavior and the economic models of demand.
(v) use the microeconomic theory and principles to current issues and evaluate related public policy initiatives
and response
Unit I: - Introductory concepts and methods [8 hours]
Scope of Economics, Three principles: optimization, equilibrium and evidence. Markets, Demand and supply
curves: individual and aggregate and shifts.
Unit: II : Foundations of Microeconomics [12 hours]
Preferences, price and income changes and the demand curve; consumer surplus and elasticities.
Production, cost curves and revenue curves. Supply curve and its elasticity; long and the short run; producer
surplus. Competitive equilibrium, entry and exit; economic and accounting profit.
Perfect competition and pareto efficiency; resource allocation; deadweight loss; equity and efficiency.
Unit III: Trade, Externalities and Factor Markets [12 hours]
Production possibility curve and opportunity cost. Basis of trade: absolute and comparative advantage. Trade
between states and between countries. Arguments against free trade.
Externalities positive and negative; private solutions and government solutions. Public goods and common
goods.
Markets for factors of production; labour, physical capital and land. The supply of labour and wage inequality.
Unit IV : Market Structure [13 hours]
Sources of market power. The monopolist: revenue curves, optimal quantity and price. Price discrimination and
government policy towards monopoly.
Oligopoly models with homogenous and non-homogenous products. Monopolistic competition: short run and
long run equilibrium.
Essential Readings
Acemoglu Daron, David Laibson, List John, Microeconomics, Pearson 2019
Additional Readings
Core Econ Team, The Economy 1.0 and The Economy 2.0, www.core-econ.org
Case, K.E., Fair, R.C., Sharon O., Principles of Economics, Pearson
