Download Course Outline-ECO-301-Spring-2017

EAST WEST UNIVERSITY
Department of Economics
Course Outlines; Spring Semester - 2017
Course Title: Intermediate Microeconomics Theory-I
Course Code: ECO-301; Credits: 3 (Three)
Section: 1
Instructor: Dr. Basanta Kumar Barmon
Associate Professor
Contact Address: 3rd Floor, Room No.:344
Email: [email protected], Phone: 9882308-Ext 143
Section
1
Sunday
10:00-11:30
2:00-3:00
Days
ST
Monday
10:00-11:30
2:00-4:40
Class Time:
Time
11.50 - 01.20
Office Hour:
Tuesday
10:00-11:30
2:00-3:00
Room Number
352
Wednesday
10:00-11:30
2:00-4:40
Thursday
09:00-2:00
Brief Description of the Course:
This course is an intermediate level study of microeconomics which mainly concentrates on the
analysis of individual prices and markets and the allocation of specific resources to particular uses. The
theories of individual consumer behavior in a perfectly competitive economy mainly discuss the
consumer’s preference and tastes based on their constrained income. The basic tools of analysis and the
nature of the utility functions and determination of optimum consumption levels are discussed in this
regard. It explains the consumer behavior theory and individual demand, and income level. This course
also discusses the production behavior of short-run and long-run, and the optimum uses of inputs in the
production process. This course also discusses the characteristics and nature of perfectly competitive
market and imperfectly competitive market (monopoly, oligopoly and monopolistic competitive
market) and the equilibrium that determine the profit maximizing level of output and price. General
equilibrium and welfare economics that explain the general equilibrium of exchange, general
equilibrium of production and general equilibrium of production and exchange and Pareto Optimality
are briefly explain in this course. This course also covers the basic concept of game theory.
Course Objectives:
The Intermediate Microeconomics Theory-I course provides the students an understanding of the
intermediate tools and applications of microeconomics analysis. Students would be able to
conceptualize the concepts on theory of choice and its application to consumers and producer behavior,
theory of production and cost, output and input markets and their structure, equilibrium and efficiency,
introduction to general equilibrium analysis.
Teaching Method:
This course will be delivered in a 90-minute class which is divided into two parts. In the first part, the
topic will be introduced. In the second part, the topic will be addressed and analyzed by students
facilitated by the instructor. A number of assignments will be given to the student individually or group
wise regarding the different concepts of microeconomic theories. In the assignment, students are
expected to apply the theoretical framework of microeconomics developed in the course to the analysis
of the workings of a specific market. The aim is to develop students’ literacy and problem-solving
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skills especially as these apply to economics.
Learning Outcomes (LO):
At end of the course the students would be able to:
(i) Generalize and make predictions about the behavior of consumers and producers.
(ii) Explain consumers’ and firms’ behavior using mathematical tools.
(iii) Understand the different concepts of costs of production functions in short-run and long-run.
(iv) Learn the partial equilibrium of perfectly competitive market, monopoly market and oligopoly and
general equilibrium and welfare economics.
Course Schedule /Synopsis of Contents:
Week
Topic
Consumer Preference and Choice/Behavior: Definition of utility, types of
Day 1
measuring utility, definition and differences of cardinal and ordinal utility
Cardinal utility: Assumption of cardinal utility, total and marginal utility, law of
Day 2
diminishing marginal utility, numerical and graphical presentation of total and
marginal utility, Consumer’s equilibrium: A single commodity, n-commodity,
derivation of Marshallian demand curve from cardinal utility.
Ordinal Utility: Assumptions of ordinal utility approach, definition of indifference
curve (IC), characteristics of IC, IC map, Marginal rate of substitution (MRS)
Day 3
(perfectly substitute and complementary good), goods, bads, and neuters, some
special types of IC based on goods, bads and neuters.
The consumer’s Income and price constraints: The budget line; changes in income
and prices and the budget line, Consumer’s choice: utility maximization; corner
Day 4
solutions
Consumer’s behavior and individual demand: Change in income and the Engel
curve: Income-consumption curve (ICC) and Engel curve, ICC and Engel curve for
Day 5
normal and inferior goods,
Changes in income and the individual demand curve: ICC and the individual
demand curve, Substitution effect and income effect, Substitution effect and income
Day 6
effect for normal good, inferior good and giffen good, difference between Hicksian
and Marshallian demand curve.
Market demand and elasticity: Market demand for a commodity, price elasticity
Day 7
and total expenditure, income elasticity of demand and Engel curve, relationship
among price elasticity of demand, marginal revenue (MR) and average revenue
(AR).
Day 8
Mid-1 Examination
Theory of production cost of production: Definition of production function in shortDay 9
run and long-run, three stages of production function, elasticity of production,
Iso-quant curve, characteristics of Isoquant curve, derivation of isoquant curves
Day 10
from the isoquant map, marginal rate of technical substation (MRTS), Economic
region of production, returns to scale
Fixed proportion production function, return to scale: constant, increasing and
Day 11
decreasing return to scale, Empirical examples of Cobb-Douglas production
function
Cost of Production: Different types of cost, relationship between MP and MC,
Day 12
AVC and AP, isocost/price line,
Least-cost input combination, Empirical examples
Day 13
Expansion path and the long-rung cost curves, Economies of scale, Learning curve.
Day 14
2
Day 15
Day 16
Day 17
Day 18
Day 18
Day 19
Day 20
Day 21
Day 22
Day 23
Day 24
Perfectly competition market: characteristics of perfectly competitive market,
Short-run equilibrium (total approach and marginal approach) of the firm, Long-run
equilibrium of the firm and industry.
Mid-2 Examination
Imperfectly Competitive Market: Monopoly market-pure and natural monopoly,
short-run equilibrium price and output (marginal and total approach), Long-run
equilibrium price and output,
Price discrimination-first degree, second-degree and third-degree price
discrimination of monopoly market; Empirical examples
Monopolistic competition market-characteristics, short-run and long-run analysis,
Oligopoly market-characteristics, interdependence among the few producers in the
industry, Cournot and Kinked-demand curve model
General equilibrium and Welfare Economics: Partial versus general equilibrium
analysis, General equilibrium of exchange and production,
General equilibrium of exchange and production and Pareto Optimality, Perfect
competition, economic efficiency and equity.
Game theory and its application, input and employment under perfectly
competition market
Empirical examples
Final Examination
Assessment and Marks Distribution:
Students will be assessed on the basis of the overall performance in all the exams, assignments,
presentation and class participation. Final numeric reward will be the compilation of:
Marks Distributions:
Class participation
Class quizzes
Assignment
Mid Term-I
Mid Term-II
Final Exam
Total
5%
10 %
10 %
25 %
25 %
25 %
100%
Grading Policy: University grading and performance evaluation policy would be followed.
% of Marks
97-100
87-89
80-82
73-76
67-69
60-62
Grade
A+
AB
C+
CD
% of Marks
90-96
83-86
77-79
70-72
63-66
Below 60
3
Grade
A
B+
BC
D+
F
Examination Schedule:
Exam
Term-I
Term-II
Final
Date
Sunday, 12 February 2017
Sunday, 12 March 2017
Sunday, 16 April 2017
Make-up Policy: In general no make-up examination will be given except for compelling reason by
special arrangement in advance.
Special Note: There is zero tolerance for cheating at EWU. Students caught with cheat sheets in their
possession, whether used or not used, and/or copying from cheat sheets, writings on the palm of hand,
back of calculators, chair of nearby walls, etc would be treated as cheating in the exam hall. The only
penalty for cheating is expulsion from EWU.
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Class participation is highly desirable since there is grading on class participation
Students with less than 80% of attendance will not be allowed to take the final exam
Students are encouraged to ask questions and take notes in the class
No comprehensive exams. Each exam/assessment will consist of its own respective part
Students must meet the prerequisite for this course
Students are advised not to use cellular phones during class hours. Cellular phones must be put
in ‘off’ or ‘silent mode’ mode
 Students are not allowed to use cellular phone as calculator in exams. Students are urged to
bring own calculator in the exam room
 Students are not allowed to leave exam room during examination
Text Book: 1. Hal R Varian: Intermediate Microeconomics, Six Edition.
2. Dominick Salvatore: Microeconomics-Theory and Application, 4th edition
3. James M. Henson and Richard E. Quandt: Microeconomic Theory-3rd Edition
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