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CEC

Micro Economics

CEC and School Of Economics, DAVV via Swayam

Overview

Micro Economics is all about how individual actors make decisions, how supply and demand determine prices, how companies think about competition and determines the prices. All in all, this course enables students to understand the basics of economics particularly how economic agents - individuals and firms make rational decision in an economy. It is not only one subject of an overall curriculum, but, it is a fundamental and rudimentary for understanding advanced and hard core economic subjects like Macro Economics, International Economics, Welfare Economics, Mathematical Economics and Econometrics.The whole syllabus of Micro Economics in this MOOC has been presented in five parts: Introduction to Economics; Demand Analysis; Consumer Behavior; Production Function and Cost Analysis; and Market Structure -Competitive & Non-Competitive Markets in total 48 modules. The first part, Introduction to Economics gives overview of major ideas of Economics comprising definitions of Economics, Principles of Economics. It also imparts nature and scope of Micro Economics, Interdependence between Micro & Macro Economics, and brief introduction about methodology of Economics. Second section covers a detailed study of Demand. It introduces the crucial assumption of Micro Economics i.e. ceteris paribus in Law of Demand. It also explores factors causing movements along the curve and shifts in the curve, and concept of various types of demand elasticity. Third part focuses on Consumer Behaviour which deals with the law of demand and consumer equilibrium with the help of utility analysis and indifference analysis. The Fourth section Production Function and Cost Analysis explicates about the most important economic agents: the producer (a company or firm)- who is responsible for creating the production function (output) and is subject to various cost measures. It also discusses how and why a firm's costs may differ in the short run and the long run. Lastly, fifth section Market Structure: Competitive & Non-Competitive Markets explains different type of market structure especially perfect (pure competition), imperfect competition (monopolistic competition and oligopoly), and monopoly. It also briefly discusses game theory, under prisoner's dilemma model and the Nash equilibrium. All in all, this course helps in better understanding of real-life situations. It will enable learners to think like an Economist.

Syllabus

Weekly Study Plan Week Module Title of Lesson/Module   1 1 Introduction to Economics 2Principles of Economics 3Scarcity and Choices Production Possibility Frontier 4Micro and Macro Economics Meaning, Difference and Interdependence; Methodology of Economics   2 5 Law of Demand Law of Demand, Demand Curve, Demand Schedule, Individual and Market Demand Curve. Exceptions of Law of Demand. 6Movement and Shifts in Demand Movement along a Demand Curve and Shifts in Demand Curve. Factors affecting Demand. 7Elasticity of Demand Concept and Different types of Price Elasticity of Demand, Measurement of Price Elasticity. Total revenue and Price Elasticity. 8Income and Cross Elasticity   3 9 Consumer Behavior: Cardinal Utility Analysis -I Meaning of Utility, Law of Diminishing Marginal Utility, Relationship between Marginal, Total Utility. Principle of Equi-Marginal Utility 10Cardinal Utility Analysis -II Principle of Equi-Marginal Utility, Critical evaluation of Cardinal Approach 11Consumer Behavior: Ordinal Utility Analysis Consumer Preferences, Assumptions, Indifference Curve, Indifference Map, Marginal Rate of Substitution, Properties of Indifference Curve, Non Normal cases of Indifference Curve 12Ordinal Utility Analysis-II Budget Line, Consumer Equilibrium (Necessary and Sufficient Condition), Corner Solutions, Substitutes and Complimentary Goods.   4 13 Income and Substitution Effect Income Consumption Curve & Engel curve 14Price, Income and Substitution Effect Price Consumption Curve, Breaking up Price Effect 15Application Indifference Curve Cash Subsidy vs Kind Subsidy, 16Revealed Preference Theory   5 17 Factors of Production Meaning and Classifications of Factors of Production. Production Function: Relationship between Inputs and Outputs. 18Law of Variable Proportion, Three stages of Law of Variable Proportion, Applicability of Law of Diminishing Returns 19Production Function with Two Variables Production Isoquants, Marginal rate of Technical Substitution, Economic Region of Production, Properties of Isoquants, 20Optimum Factor Combination & Return to Scale Iso-Cost Line, Optimal Combination of Resources, Cobb-Douglas Production Function, Returns to Scale   6 21 Introduction to Cost Analysis 22Cost of Production Concept of Cost, Social & Private costs, Short run Cost- Total, Average and Marginal Cost Curves. Learning Curve. 23Cost of Production Long run Cost Curves. Learning Curve. 24Market Structure Meaning of Market and Classification of Markets   7 25 Concept of Revenue Concepts of revenue: Marginal and Average: Revenue under conditions of Perfect and Imperfect Competition 26Firm: A General Analysis Equilibrium of the Firm 27Perfect Competition -I Meaning and condition of Perfect Competition. Equilibrium of the firm. Producer surplus. 28Perfect Competition-II Industry Equilibrium, Industry’s long run supply curve   8 29 Stability Analysis Demand- Supply Equilibrium: Walrasian and Marshallian. 30Application of Demand - Supply Analysis Impact of taxes and subsidy 31Monopoly Meaning and Conditions of Monopoly. Causes of Monopoly. 32Price and Output Equilibrium under Monopoly   9 33 Monopoly -II Shifts in demand curve and the absence of the supply curve The social costs of monopoly power including Deadweight loss. 34Price Discrimination Degrees of Price Discrimination 35Monopoly Power Measurement of Monopoly Power, Rule of thumb for pricing. 36Horizontal and Vertical Integration of Firm   10 37 Imperfect Competition Monopolistic and Oligopoly. Product Differentiation and Monopolistic Competition. Characteristics of Monopolistic Competition. 38Monopolistic Competition-I Price and Output Equilibrium 39Monopolistic Competition-II Selling Costs and Advertising. Optimum level of Advertising Outlay. Monopolistic Competition and economic efficiency 40Oligopoly Characteristics of Oligopoly, Oligopoly and Interdependence   11 41 Collusive Oligopoly Cartel as a Cooperative Model 42Price-Leadership Model Price Leadership by dominant firm 43Kinked Demand Curve Theory of Oligopoly 44Prisoners’ Dilemma and Oligopoly Theory   12 45 Sales Maximization Model of Oligopoly Firm 46Classical Model of Oligopoly Cournot’s Duopoly Model, Stackelberg model 47Contestable markets Theory 48Pricing Public Utilities  

Taught by

Dr. M. Vasim Khan

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