Module Code and Title:      ECO101 Microeconomics

Programme:                                      Bachelor of Commerce

Credit Value:                                     12

Module Tutors:                                 Karma Lhaden, Kabita Chettri, Madhav Verma, Dr. Swati Chakraborty

Module Coordinator:                        Dr. Swati Chakraborty

General Objective: The aim of this module is to provide an introduction to microeconomics for students who will become managers of their own small-scale enterprises. The module presents basic ideas about consumer choice, demand and supply, production and cost and market structure. The major focus of the module is to enable students to reason economic information in a business and/or personal setting.

Learning Outcomes – On completion of the module, students should be able to:

1. Apply the demand and supply concepts to solve business and individual problems
2. Estimate elasticity of demand and supply for specific products
3. Evaluate business projects based on the concepts of utility and marginal utility
4. Utilize production evaluation concepts such as returns to scale and the Cobb-Douglas Production function
5. Apply cost functions such as variable cost, and long run cost curves to business problems
6. Assess the functioning of a market on specific businesses and the impact of different market structures such as oligopoly on business situations
7. Explain internal and external organizational environments
8. Critically analyse a business situation of a moderately complex nature

Teaching and Learning Approach:

Assessment Approach:

A. Application-based assignments: Portion of Final Marks-10%

Each student will complete an assignment using economic concepts on business problems concerning supply and demand and production cost and market structure.

2%       using the correct procedure and calculations

4%       applying economic concepts to answer questions

4%       drawing the correct conclusions

B. Case studies: Portion of Final Marks-10%

Each student will complete a case study (800 words), based on current financial topics in the news.

5%       defining the economic problem presented by real situations

5%       reaching reasonable conclusions using economic analysis

C. Quizzes: Portion of Final Marks-10%

Each student will complete 2 fact-based in-class quizzes (30 min duration, 5% each) to evaluate their knowledge of specific factual financial topics.

D. Project and Presentation: Portion of Final Marks-15%

(10% for the project & 5% for presentation of the project)

Select and analyse a business problem related to economics in a group of 4 using techniques taught in class.  The paper will be approximately 2000words, and include problem definition, data, economic analysis, conclusions and references. The group presentation will be approximately 15 minutes, and include slides. 

2%       clear definition of a problem

3%       using appropriate economic analysis techniques

2%       gathering data and information from multiple sources

3%       conclusions, recommendations, references

5%       individually assessed presentation score based on quality of presentation and understanding of the content based on Q&A

E. Midterm Examination: Portion of Final Marks-20%

Students will take a written exam of 2-hour duration covering topics up to the mid-point of the semester.

F. Semester-end Examination: Portion of Final Marks-35%

The module will have a semester-end exam for 2 hours covering the entire syllabus. The question will be divided into two parts – Part A (carrying 40% of the exam weightage) will be mostly of short answer including objective questions. Part-B (carrying almost 60% of the exam weightage) will be mostly of essay type or an extended response to the given question. This part of the question requires students to apply, analyse, and evaluate or construct knowledge and skills. Cases will also be used to test the levels of knowledge.

Pre-requisites:None

Subject Matter:

1. Introduction to Microeconomics
   • Economics and why study economics
   • How microeconomics is different from macroeconomics
   • Economic problems
   • Opportunity cost
   • Production possibility curve
   • Economic efficiency

2. Theory of Demand
   • Demand functions
   • Law of demand and exceptions to law of demand
   • Demand equation
   • Individual and market demand
   • Determinants demand

3. Theory of Supply
   • Supply function
   • Law of supply and exceptions to law of supply
   • Individual and market supply
   • Supply equation
   • Determinants of supply
   • Change in demand and supply curves
   • Market Equilibrium
     • Concept of equilibrium
     • Factors changing equilibrium

4. Elasticity of Demand and Supply
   • Different types of elasticity of demand and supply
   • Measuring elasticity of demand and elasticity of supply: Mid-point method and Geometrical method
   • Application of elasticity on business decisions

5. Consumer’s Behaviour
   • Cardinal Utility- Law of diminishing Marginal Utility
   • Indifference Curve Analysis and its properties
   • Diminishing Marginal Rate of Substitution
   • Budget constraint and Consumer’s equilibrium (income, price, and substitution effect)

6. Theory of Production
   • Factors of production. Isoquants, returns to scales, internal and external scale of production.
   • Theories of production- laws of returns to scale using isoquants; law of variable proportion

7. Theory of Cost, Revenue and Market Structure
   • Cost Functions- short and long run cost curves; Total Cost, total fixed, total variable costs, average fixed cost, and average variable cost and average cost
   • Why short run average cost curve is ‘U’ shaped? Relation between average and marginal cost curves
   • Revenue and Revenue Curves: Total revenue, average revenue and marginal revenue
   • Market; market structures, their characteristics and price determination
     • Perfect Competition
     • Monopoly
     • Monopolistic
     • Oligopoly (price rigidity)

Reading Lists:

1. Essential Readings
   • Gregory, M. (2016). Microeconomics (9th ed.). Cengage Learning Solutions.
   • Robert, S. P., & Rubinfeld, D.L. (2013). Microeconomics (8th ed.). Prentice Hall India.
2. Additional Readings
   • Varian, H.R. (2009). Intermediate microeconomics, A modern approach (8th ed.). W W Norton.
   • Koutsoyiannis, A. (2003). Modern microeconomics (2nd International ed.). Palgrave MacMillan.
   • Gravelle, H., & Rees, R. (2004). Microeconomics (3rd ed.). Prentice Hall: Financial Times.
   • The Economist/ Resources-Latest Information, http://www.economist.com

Date: July, 2017