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East West University
Department of Economics
Semester: Summer 2017
Course Information
ECO 101: Principle of Microeconomics
Credit: 3
Pre-requisite: None
Instructor Information
Gazi Quamrul Hasan
Room: 329
Contact: [email protected]
Contact No: +8801716136440 (You are encouraged to call if you can’t find me during office hour)
Teaching Assistant
TBA
Class Routine & Office Hours
08:30-10:00
Sunday
Office Hour
Monday
MAT110(7)
433
ECO101(7)
339
MAT110(7)
433
ECO101(7)
339
Tuesday
Wednesday
Thursday
10:10-11:40
11:50-01:20
Office Hour
MAT211(9)
337
ECO357(1)
358
MAT211(9)
337
ECO357(1)
431
Office Hour
Office Hour
Office Hour
01:30-03.00
03.10-04.40
Office Hour
Office Hour
Office Hour
Course Objective
This is the first course in economics required for business, economics and engineering majors. This course does not
require any prior knowledge of economics though basic mathematical skill is needed. This course aims to introduce
initial concepts of economics to a variety of students. At the end of the course, students will be able
1.
2.
3.
To differentiate between market forces: demand and supply
To define and apply the concepts of elasticity, cost and utility.
To analyze different market conditions and behaviours.
Text Books
Basic Texts: 1) Microeconomics- Paul Krugman, Robin Wells (collect from the group)
2) Economics-Samuelson, P.A. and Nordhaus.
Supplementary Text: Economics for the IB diploma, Ellie Tragakes
(collect from the group)
Course Contents & Tentative Teaching Schedule
Topics
Introduction to the Economic concepts:
- Principles of Economics
- Production Possibility Frontier
- Circular flow model
- Theory of Comparative advantage
- Graphs
Demand and Supply:
- Determinants
- Movements along the curves
- Shifts of the curves
- Equilibrium
Additional Topics on Demand and Supply:
- Shifts in equilibrium
- Concept of surplus and shortage
- Consumer and Producer surplus
- Price ceiling and price floor.
Elasticity of Demand and Supply:
- What elasticity is all about?
- Price elasticity of demand
- Cross-price elasticity of demand
- Income elasticity of demand
- Elasticity of supply
Theory of consumer preferences and choice:
- Utility and consumer equilibrium
- Theory of consumer choice
- Equi-marginal principle
- Marginal rate of substitution
- Budget line
Decision making by individuals and firms:
- Economic cost vs. Accounting cost
- Opportunity cost vs. Accounting cost
Theory of costs and inputs:
- Production in the short run: the law of
diminishing marginal returns
- Short-run cost curves
- Long-run cost curves
Specific Objectives
Time Frame
Introduce the students with the
basics concepts and keywords of
Economics.
Week 1
Understand the concept of Demand,
Supply and use it to analyze and
determine equilibrium market price
and output.
Week 2 and 3
Using demand and supply analyze the
disequilibrium situations and how it is
restored.
Week 3 and 4
Define, calculate, interpret different
types of elasticities and relate them
with real life examples and
understand why economists use
elasticity to measure responsiveness
to changes in price and incomes.
Week 5
Study how rational consumers
allocate their incomes across goods
ensuring maximum utility or
satisfaction. Introduce the students
with marginal concepts as well in
their decision making.
Week 6 and 7
Understand why decision making
begins with accurately defining cost
and benefits. And how accounting
and economic cost differs from one
another.
Week 8
Show various typesof cost a firm faces
and how these costs varies from
short-run to long-run.
Week 9
Perfect Competition:
- Characteristics
- Profit, price and output in the short-run for
a competitive firm
- Using marginal analysis to choose the
profit-maximizing output
- The theory of short-run supply
- Marginal revenue, cost, and profit
- The decision to shut down in the short run
- Long-run supply and equilibrium in
competitive markets
- Profit, loses, and long-run supply
- Long-run entry and exit
Monopoly :
- Characteristics
- Natural monopoly, legal barriers to entry
- Profit maximization by monopoly firms
- Evaluating market outcomes under
monopoly
- Efficiency comparison of monopoly and
perfect competition
Monopolistic Competition:
-Characteristics
Oligopoly:
- Distinguishable characteristics
Factor Market:
-Labor demand
-labor supply
-Factors affecting the demand and supply
-Equilibrium wage and labor
-Backward-bending labor supply curve
-Market for land
Ricardian Theory of Rent :
- Assumptions
- Statement
- Criticism
Market Failure :
- Introduction to basic concepts of market
failure
Primarily give the students an idea
about the prevalent market
structures.
Learn what characteristics make a
market competitive and how a price
taking producer determine its profit
maximizing quantity of output.
Week 10 and 11
To learn why some markets have only
one seller and how a monopolist
takes decisions regarding its profit
maximizing output and price levels.
Study the basic differences between
perfect competition and monopoly
and its effect on society’s welfare.
Week 12
Learn the principle characteristics of
the market structure.
Week 13
Study the main characteristics of the
market and why it occurs. Study and
analyze the behavior of the particular
firms in the competition.
Week 13
An Introduction to market for Labor
and land and how they are traded in
the market. How labor supply arises
from a worker’s decision about time
allocation and value of marginal
productivity of labor (VMPL)
determines the labor demand.
Week 13 and 14
To give the students a brief
understanding of the main statement
of the rent theory and its limitations
as well.
Week 14
An introduction to the basic concepts
of market failure
Week 14
Score Distribution
Course Part
Mark (%)
Assignments and quizes
Mid Term Ι Exam
15%
25%
Mid Term ΙΙ Exam
Term Final Exam
25%
30%
Attendance
5%
Grading Policy
Marks (%)
Letter Grade
Grade Point
Marks (%)
Letter Grade
Grade Point
97-100
A+
4.00
73-76
C+
2.30
90-96
A
4.00
70-72
C
2.00
87-89
A-
3.70
67-69
C-
1.70
83-86
B+
3.30
63-66
D+
1.30
80-82
B
3.00
60-62
D
1.00
77-79
B-
2.70
Below 60
F
0.00
Examination Schedule
Examinations will be taken as per University Schedule
Learning Outcomes




Understand market equilibrium, elasticity and the concepts of social surplus
Understand principles of producer’s behaviour
Understand utility and consumer behaviour
Understand market structure



Be able to differentiate between demand shifts and supply shifts
Be able to analyze market structure.
Be able to analyze price change, elasticity and market revenue
Special Instructions



No make up exams and make up class quizzes except for serious compelling reasons.
No comprehensive exams. Each exam will consist of its own respective part.
No cellular phone during class hour.
Best of Luck