(Core-3) Microeconomic Theory – II
(Core-3) Microeconomic Theory – II
Syllabus
Course Started on 8th July 2021
Question paper 2019, 2020, 2021 , 2022
Course Completed on 10th September ,2021
• Demand for factors of production – Determinants of price elasticity of demand for a factor – marginal productivity theory and its limitations
Theory of factor Pricing and Income distribution : General view
Factor Pricing; Demand for labour by Individual firm
Determination of the price of fop and equilibrium of individual firm in factor market
Determinants of demand for labour (fop)
Determinants of price elasticity of demand for a factor
Marginal productivity theory and its limitations
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.
Choice between work and leisure – derivation of individual labour supply curve . Video
Derivation of individual labour supply curve -Short notes
Determination of equilibrium in a competitive labour market and other FOP market
Total labour supply curve and its determinants - Notes 1 , Notes 2
Comparative static analysis in Labour market and cobweb model - Lecture notes, Video
Comparative Static Analysis -Video
Trade Union and Collective Bargaining Part-1
Trade Union and Collective Bargaining Part-2
Monopsony and Bilateral Monopoly - Reading
• Theory of rent - Transfer earning and economic rent – quasi rent – Rent and price
Ricardo Theory of Rent (RTR) - Relation between rent and price
• Theory of Interest- Real and Money Interest- Loanable Fund Theory and Liquidity Preference Theory of Interest
Classical Theory of rate of Interest.
Loanable fund theory of rate of interest - Notes , Video1, Video2
Liquidity Preference Theory of rate of Interest
• Theory of profit - Gross and net profit- elements of profit- risk and uncertainty theory, Innovation theory of profit.
2. Imperfect Competition
Monopolistic competition: Short run and long run equilibrium – excess capacity.
Question set 1-Link (Submission date 20th August)
Varian- Intermediate Microeconomics, Chapter 25, page 475 to 484 ,Pindyck & Rubenfeld- Microeconomics, Chapter 12, pages 451 to 455, Advance Economics Theory : Microeconomics Analysis by H.L Ahuja - 21st edition, chapter 36, pages 790-808
Lecture 1 - Market structure Foundation concept - Youtube Video link , PDF
Lecture 2 - Monopolistic Competition Part 1 - Youtube link , PDF
Techniques to draw graph for SNP, NP and Loss in case of Monopolistic competition.Concept of AR & AC
Lecture 3 - Monopolistic Competition Part 2 - Youtube link, PDF
Additional Notes Long run equilibrium from various Short run position in Monopolistic competition
Theory of Oligopoly :
Characteristics of oligopoly - non-collusive oligopoly models of Cournot, Bertrand and Stackelberg– collusive oligopoly – price leadership – market sharing model – price rigidity under oligopoly.
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
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.
Youtube Video Link
Pareto Optimality Criteria in Consumption -Video
An example of Edgeworth box diagram
Pareto Optimality in production, consumption and simultaneous equilibrium
Course Learning Outcome
This course broadly covers Imperfect competitive market structure – monopolistic & oligopoly, theories of factor pricing, general equilibrium theory and welfare economics. Thus, this paper covers comprehensive understanding of the microeconomics foundations required for higher education in Economics and also for making strategic and policy decisions .
References:
1. Robert S. Pindyck, Daniel L. Rubinfeld, PremL.Mehta: Microeconomics, 7thEdn. Pearson
2. Samuelson and Nordhaus : Economics
3. Koutsoyiannis : Microeconomic Theory
4. Ferguson and Gould :Microeconomic Theory
5. H. Varian : Intermediate microeconomics
6. Henderson and Quandt : Microeconomic Theory
Core Paper 03 Microconomics - II Date of Exam:05/10/2021 (Tuesday, 2 pm to 4 pm, 30 minutes extra for creating pdf, renaming pdf and submission in Google form), Submit before 4.30 pm. Marks will be deducted for late submission
Rename pdf - < Your Name, C-03, Registration number>
Submission Link
https://docs.google.com/forms/d/e/1FAIpQLScRKj08wvvuQN1XOCZqt4kgypg5YKLVOgO_-HrVWXmPjkQkXQ/viewform
After submission check the submission successful message for confirmation. In case you face difficulty in submission then by 4.15 pm send one copy of answer script in whatapp and most importantly email me at sssir2021batch@gmail.com
Note : check your Pdf properly before making final submission. Make sure all pages, graphs are visible and there is no cut out part in pages.
I'm adding Bertrand model, and the sequence of this topic will be as follow; Characteristics of oligopoly, non-collusive oligopoly models of Cournot, Bertrand and Stackelberg; their comparison, numerical example and case study. Then we will do Paul Sweezy Model - we know it as kinked demand curve model - leading to Price rigidity under oligopoly. In case of Price rigidity, we will study about Buoyant market, impact of imposition of taxes on price rigidity, case for market expansion without affecting prices. After that we will look at collusive oligopoly ; Reason for collusion, we will discuss also two form of collusion. First one is cartel, we will do in detail with numerical example and case study. Then we will move into to look at three form of price leadership, they are a. Low cost price leadership, b. Dominant firm price leadership, and c. Barometric price leadership. In this case we will do numerical too.
CLASS TASK 1- ALL NOTES OF UNIT 1 + QUESTION SET 1 + QUESTION SET 2
QUESTION SET - Set 1 of 2 -Link , Set 2 of 2-Link
Submission link of class task 1 - 13th August before 2 pm
Oligopoly- Introduction lecture notes , Mindmap notes 1., Mindmap Notes 2 Cournot and Bertrand Model notes , Mindmap notes Non Collusive Model+ Stackelberg Model Reading Stackelberg Model and Paul Sweezy Kinked Demand Curve notes Price Rigidity Notes Collusive Oligopoly and Perfect Cartel Market Sharing Cartel and Non-Price Competition Market Sharing - Quota system Price Leadership Model
Pareto optimality criteria-Marginal Condition