Preamble:The course aims to provide an introduction to Microeconomic theory and its applications. We begin by analyzing the action of a single consumer and a single producer. Then we see how the producers and consumers interact given various market forms. Finally, the course touches upon the emerging doctrine of behavioral economics.
Course contents:Consumer behaviour: preference, utility, indifference curve, income and prices, budget line; Derivation of demand: graphically and mathematically using optimization technique, effects of price and income, demand elasticities, income and substitution effects: applications, consumer’s surplus; Production: output and inputs, short run and long run, law of variable proportions, returns to scale, profit maximisation and supply function, supply elasticities, cost functions; Markets: perfect competition, surplus maximization and welfare analysis: tax, subsidy, price ceiling and price floor, quota, import tariff; monopoly; monopolistic competition; monopsony; brief introduction to duopoly:Cournot and Bertrand competitions; Behavioral Economics: limited cognitive power, limited willpower, and limited self-interest; policy implications
Texts/References:
1. G. N. Mankiw, Economics: Principles and Applications, Cengage, 2007.
2. W. Nicholson, and C. M. Snyder, Intermediate Microeconomics and Its Application, South Western College Publishing, 2014.
3. A. Serrano and A. Feldman, A Short Course in Intermediate Microeconomics, Cambridge University Press, 2013
