Syllabus (ECONOMICS)

Course Type: MAJ-3

Semester: 3

Course Code: BECOMAJ03T

Course Title: Micro Economics with Mathematical Applications

(L-P-Tu): 5-0-1

Credit: 6

Practical/Theory: Theory

Course Objective:

Learning Outcome: Course Objective: This course is formulated to give a solid base with further development of micro economic theories. Theoretical micro economics with applied examples will create a solid base for the students over this. Course Specific Outcome: The micr

1. Utility Theory: Utility Functions and their properties (5)
2. The Consumption Decision: (15)

Budget constraint,

Consumption and income and price changes,

Demand for all other goods and price changes;

Description of preferences- most preferred bundle and its properties;

Consumer optimum choice;

Income and substitution effects;

Marshallian and compensated demand curves;

Price consumption curve,

Income consumption curve, and Engel curve;

Labour supply and savings decision - choice between leisure and consumption;

Compensating and equivalent variation,

Slutsky equation;

Consumption-leisure choice and labour supply;

Revealed preference approach.

3. Production and Costs: (15)
   Basic concepts of Isoquants; Cobb–Douglas Production Function, CES Production Function, General concept of homogenous and homothetic production function and their properties; iso cost line and firms equilibrium and expansion paths; relation between short run and long run costs.

4. Market Structure: (30)
   (a) Perfectly competitive market; (b) Monopoly; Pricing with market power; Degree of monopoly; Price discrimination-different degrees; Multiplant monopoly; Peak-load pricing; Two-part tariff; Monopolistic competition.
   (c ) Oligopoly: Cournot Equilibrium, Bertrand Equilibrium, Stackelberg Equilibrium; Concept of collusion and cartels; (d) Monopsony, Bilateral monopoly in labour market.

5. Input Market: (10)

Distribution Theory, Input demand for competitive firm and competitive industry, returns to scale and product exhaustion.

6.General Equilibrium, Efficiency, and Welfare: (15)
(a) Exchange Economy, Consumption Allocation and Pareto Optimality; Edgeworth box and contract curve; Equilibrium and efficiency under pure exchange;

(b) Pareto efficiency with production: concepts of PPF, SIC, and resource allocation;

(c ) Perfect competition, Pareto efficiency and market failure (externalities and public good); Property Right and Coase Theorem.

Reading References:

• Hal R. Varian, 2010, Intermediate Microeconomics: A Modern Approach, W.W. Norton and Company/Affiliated East-West Press (India), 8th edition.
• Hugh Gravelle and Ray Rees, 2004, Microeconomics, Prentice Hall (UK); 3rd edition.
• Anindya Sen , Microeconomics: Theory and Applications, Oxford University Press.
• Pindyck, Rubinfeld and Mehta, 2007, Microeconomics, Pearson, 7^th Edition.
• Mas-Collel, Whinston and Green, 2012, Microeconomic Theory, OUP(Indian edition).
• GC Archibald and Richard Lipsey, 1984, An Introduction to Mathematical Treatment of Economics, 3^rd Edition, AITBS, Delhi.
• B. Douglas Bernheim and Michael D. Whilston, 2009, Microeconomics, Tata McGraw Hill (India)
• C. Snyder and W. Nicholson, 2010, Fundamentals of Microeconomics, Cengage Learning (India).
• Jogendranarayan Mitra, 2010, Undergraduate Microeconomics, New Central Book Agency, Kolkata.
• Satya R. Chakravarty, Microeconomics, Allied Publishers Ltd.
• TC Bergstrom and HR Varian, 2014, Workouts in Intermediate Microeconomics, 9^th Edition, W.W. Norton and Company.