Introductory Microeconomics

• Syllabus

Introduction What is microeconomics? Scope and method of economics; the economic problem: scarcity and choice; the concept of opportunity cost; the question of what to produce, how to produce and how to distribute output; science of economics; institutions for allocating resources; the basic competitive model; prices, property rights and profits; incentives and information; rationing; positive versus normative analysis The scientific method; the role of assumptions; models and mathematics; why economists sometimes disagree Interdependence and gains from trade; specialization and trade; absolute advantage; comparative advantage and trade. Supply and demand: How markets work, markets and welfare Markets and competition; determinants of individual demand/supply; demand/supply schedule and demand/supply curve; market versus individual demand/supply; shifts in the demand/supply curve, demand and supply together; how prices allocate resources; elasticity and its application; controls on prices; taxes and the costs of taxation; consumer surplus; producer surplus and the efficiency of the markets Application to international trade; comparison of equilibria with and without trade, the winners and losers from trade; effects of tariffs and quotas; benefits of international trade; some arguments for restricting trade. The Households The consumption decision - budget constraint, consumption and income/price changes, demand for all other goods and price changes; description of preferences (representing preferences with indifference curves); properties of indifference curves; consumer‘s optimum choice; income and substitution effects; labour supply and savings decision; choice between leisure and consumption. The firm and perfect market structure Behaviour of profit maximizing firms and the production process; short-run costs and output decisions; costs and output in the long-run. Imperfect Market Structure Monopoly and anti-trust policy; government policies towards competition; imperfect competition. Input Markets Labour and land markets: Basic concepts (derived demand, productivity of an input, marginal productivity of labour, marginal revenue product); demand for labour; input demand curves; shifts in input demand curves; competitive labour markets; labour markets and public policy

Reference books:

1. Lipsey, R., & Chrystal, A. (2011). Economics. Oxford University Press.

2. Mankiw, N. G. (2020). Principles of economics. Cengage Learning.

To download this book, click on the link below.

https://www.academia.edu/27091102/The_Principles_of_Economics_7th_Edition_pdf