B.Com. (Hons.)
(CBCS)
Semester – I
G 101
MICRO ECONOMICS
(6 Credit)
Lectures: 60 Tutorial 5
Full Marks: 100
(Internal Assessment 20 + 80 End-Term)
Objective: The objective of the course is to acquaint the students with the
concepts of microeconomics dealing with consumer behavior. The course also
makes the student understand the supply side of the market through the
production and cost behavior of firms.
CONTENTS
Unit I
Demand and Consumer Behavior --- 12 L+ 1 T
Concepts of revenue: marginal and Average: Revenue under
conditions of Perfect and imperfect competition Elasticity of demand: price,
income and cross.
Consumer Behavior: Indifference curve analysis of consumer behavior;
Consumer’s equilibrium (necessary and sufficient conditions). Price elasticity
and price consumption curve, income consumption curve and Engel curve, price
change and income and substitution effects. Indifference curves as an analytical
tool (cash subsidy v/s. kind subsidy). Revealed Preference Theory. Marks: 16
Unit II
Production and Cost
-- 12 L+ 1 T
Production isoquants, marginal rate of technical substitution,
economic region of production, optimal combination of resources, the expansion
path, isoclines, returns to scale using isoquants. Cost of Production: Social
and private costs of production, long run and short run costs of production.
Economies and diseconomies of scale and the shape to the long run average cost.
Learning curve and economies of scope. Marks:
16
Unit III
Perfect Competition --- 12 L+ 1 T
Perfect competition: Assumptions.
Equilibrium of the firm and the industry in the short and the long runs,
including industry’s long run supply curve. Measuring producer surplus under
perfect competition. Stability Analysis – Walrasian and Marshallian. Demand -
supply analysis including impact of taxes and subsidy.-- Marks: 16
Unit IV
Monopoly --- 10 L+ 1 T
Monopoly: Monopoly short run and long run equilibrium. Shifts is
demand curve and the absence of the supply curve. Measurement of monopoly power
and the rule of thumb for pricing. Horizontal and vertical integration of
firms. The social costs of monopoly power including deadweight loss. Degrees of
price discrimination. Marks: 12
Unit V
ImperfectCompetition ---14 L + 1 T
Monopolistic Competition and Oligopoly: Monopolistic competition
price and output decision- equilibrium. Monopolistic Competition and economic
efficiency Oligopoly and Interdependence
– Cournot’s duopoly model,
Stackelberg model, Kinked demand model. Prisoner’s dilemma, collusive oligopoly
– price-leadership model – dominant firm, cartels, sales maximization,
Contestable markets theory. Pricing Public Utilities. Marks: 20
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