Microeconomics

Unit 1:Fundamentals of Microeconomics

Microeconomics: concept and scope; Microeconomics in business decisions: nature anduses; Basic principles of economics: how people make decisions, how people interact and how the economy as a whole works

Unit 2: Analysis of Demand, Supply and Market Efficiency

Demand function: concept and types, movement and shifts in demand curve; Supply function: concept and types, movement and shifts in supply curve; Market equilibrium; Effect of changes in demand and supply on market equilibrium; Effect of government policy (Tax, subsidy and price control) on market equilibrium; Market efficiency: concepts and measurement (by consumer's surplus and producer's surplus); Price elasticity of demand: concept and calculation; Price elasticity of demand in demand curve; Relationship between revenue and price elasticity; Uses of price elasticity of demand in business decision making; Concept of income elasticity of demand, cross elasticity of demand, advertisement elasticity of demand and elasticity of supply

Unit 3:Analysis of Consumer’s Behavior

Cardinal approach: assumptions, consumer's equilibrium and derivation of demand curve; Ordinal approach: concept, assumptions and properties of indifference curve; Marginal rate of substitution; Price line; Consumer's equilibrium; Price effect and derivation of demand curve for normal goods.

Unit 4:Production, Cost and Profit analysis

Production function: concept and types; concept of Cobb-Douglas production function; Optimal employment of one and two variable inputs; Cost function: concepts, implicit cost and explicit cost, accounting cost and economic cost, opportunity cost; Short-run costs and long run costs, fixed and variable costs; Law of variable proportion and derivation of short cost curves; Isoquants, Iso-cost line, laws of returns to scale and derivation of long run average cost curve; Economies and diseconomies of scale; Relation between average cost and marginal cost; Profit: business profit and economic profit

Unit 5:Firms in Market and Pricing Practices

Market structure: concept and characteristics; Profit maximization goal of firm; Price and output determination under perfect competition: short-run and long-run equilibrium, Derivation of short run supply curve of a firm and industry; Price and output determination under monopoly: short-run and long-run equilibrium; Price and output determination under monopolistic competition: short-run and long-run equilibrium, selling cost and effect on equilibrium; Concept and types of cartel; Pricing under joint profit maximization cartel; Game theory: concept, dominant strategy, Nash equilibrium and prisoner’s dilemma; Pricing practices: price discrimination, cost plus pricing, predatory pricing, skimming pricing and penetration pricing

Unit 6:Markets for Resources