Unit-1. Theory of Factor Pricing
• Introduction and Foundation of Factor Pricing Theory - Personal and Functional distribution of Income
•Demand for factors of production is derived demand- Demand for factors of production by individual firm – Determinants of price elasticity of demand for a factor – marginal productivity theory and its limitations- Product exhaustion theorem and adding up problem.
Lecture 1- Introduction - Foundation of Factor Pricing Theory Notes
Lecture 4- Determination of the FoP price and equilibrium of individual firm in factor market-Notes
Lecture 5 - The Determinant Factors of Quantity of Labor Demand - Notes
Lecture 6 -Determinants of price elasticity of demand for a factor-Notes
Lecture 7- Marginal Productivity Theory and its limitations-Notes
Lecture 8-Product exhaustion theorem- Notes
• Theory of wage - Choice between work and leisure – derivation of individual labour supply curve – total labour supply curve – demand for labour – determination of equilibrium in a competitive labour market- collective bargaining and wage rate.
Lecture-9.1 Derivation of Individual Labour Supply Curve - Notes
Lecture-9.1 -Backward-bending Supply Curve of labour-Short notes
Lecture-10.1- Total labour supply curve and demand, and determinants -Notes
Subpart - Comparative static Analysis in factor(Labour) market and cobweb model-Video
Lecture 10.2 - Collective Bargaining- Notes
• Theory of profit - Gross and net profit- elements of profit- risk and uncertainty theory, Innovation theory of profit.
• Theory of rent - Transfer earning and economic rent – quasi rent – Rent and price
Ricardo Theory of Rent (RTR) - Notes
Modern Theory of Rent(MRT)-Notes
• Theory of Interest- Real and Money Interest- Loanable Fund Theory and Liquidity Preference Theory of Interest
Real interest refers to the the nominal interest rate adjusted for inflation, it takes into account the rate of inflation and its effect on the purchasing power of money. Formula for real interest rate: Real Interest Rate = Nominal Interest Rate - Inflation Rate
Money interest, on the other hand, refers to the nominal interest rate, It's the rate at which money is borrowed or lent without any adjustment for inflation. Formula for nominal interest rate: Nominal Interest Rate = Real Interest Rate + Inflation Rate
Loanable Fund Theoy-Notes, Video1, Video2
Liquidity Preference theory- Notes, Video
Practice Question Set 1/2-Link
Practice Question set 2/2-Link
Unit -2. Theories of Imperfect Competition
Theory of monopoly: Theory of monopoly: Characteristics- AR and MR curves under monopoly – Relation among AR, MR and Elasticity of demand – Equilibrium under monopoly – major features of monopoly- index of monopoly power – Form of Monopoly - Price discrimination – when possible? – when desirable? – Degree of price discrimination- First, Second and Third – equilibrium under price discrimination – Intertemporal pricing, Peak Load pricing-Natural Monopoly- Efficiency and Monopoly- Problems of Monopoly – Equilibrium under Multiple Plant monopoly – Comparison between Monopoly and Perfect Competition.
Monopolistic competition: Introduction and foundation, short run, adjustment from short run to long run equilibrium, and long run equilibrium, Chamberlin large group model. Excess capacity. - Reading
Theory of Oligopoly: Characteristics of oligopoly - non-collusive oligopoly models of Cournot and Stackelberg – collusive oligopoly – price leadership – market sharing model – price rigidity under oligopoly.
Collusive Oligopoly Notes - 1. Introduction and Low Cost PL Model , 2. Dominant and Barometric PL Model , 3. Cartels , 4. Market Sharing by Quota Agreement
Youtube Video Link
Lecture 1 - Oligopoly Market Structure: Introduction -
Lecture 2 - Sources & form of Oligopoly, Cournot Model
Lecture 3- Cournot Model using Reaction curve
Lecture 5 - Stackelberg Model and Paul Sweezy Kinked Demand Model
Lecture 6 - Introduction to Collusive Oligopoly and Perfect Cartel Model
Lecture 7- Market Sharing Cartel Model; 1. Non-Price Competition
Lecture 8- Market Sharing Model; 2. Quota System
Lecture 9- Price Leadership Model
Unit -3. General Equilibrium and Economic Welfare
Partial and general equilibrium – a formal statement of general equilibrium approach - the concept of Pareto optimum – Pareto optimality in consumption – Pareto optimality in production – General Pareto optimality condition.
Partial and General Equilibrium notes
Youtube Video Link
Pareto Optimality Criteria in Consumption -Video
An example of Edgeworth box diagram
Pareto Optimality in production, consumption and simultaneous equilibrium
References/ Suggested Readings
1. A Koutsoyaniss: Modern Microeconomics, 2nd Edition, Macmillan Press Ltd. Hound mills/ Palgrave Macmillan (India).
2. R. S. Pindyck and D. N. Rubinfeld : Microeconomics, 8th Edition, Pearson India.
3. H.L Ahuja: Advance Economic Theory-Microeconomics Analysis, 21st Edition, S. Chand Publishing.
4. C. Snyder and W. Nicholson, Microeconomic Theory: Basic Principles and Extensions, 12th Edition, Cengage Learning (India).
5. D.N Dwivedi: Microeconomics II, 1st Edition, Pearson India.