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Certificate Course
Concept Notes
This course teaches students Economics interpretation of Demand Analysis. We first look at cardinal approach, then Ordinal approach and finally revealed preference approach. Through this various approaches, students will be able to grasp various approach about the decision making of a rational Consumer. This is an application base paper; so several techniques will be taught in this course too.
Students from various colleges and university can join the course. Contact department of Economics, BB College,Asansol for more details.
Course Evaluation Criteria –Assignment, Presentation and Online/Offline Examination
Duration
This is a 45 hours certificate course on "The Evolution of Demand Theory in Microeconomics" organized by department of Economics, BB College,Asansol.
Syllabus
Cardinal utility analysis : Marinal utility , Law of Equi Marginal utility, Condition for consumer equilibrium, derivation of demand curve, criticism.
Demand Analysis – Law of Demand, Cases of movement along, increase and decrease in demand schedule due to change in various independent variables. Here we will teach graphical techniques.
Elasticities of demand – price, income and cross elasticities – relation between price elasticity of demand, price and marginal revenue – relation between price elasticity and total expenditure.
Indifference curve analysis: Indifference curve, assumptions, Marginal Rate of Substitution – Principle of diminishing Marginal Rate of substitution, technique of drawing Indifference curve for Normal, Neutral and bad goods.
Budget Line, slope of budget line, shift cases in budget line
Consumers Equilibrium using Indifference curve and Budget line analysis
Income consumption curve, Price consumption curve along with Engel curve and demand curve.
Price effect Analysis – Income effect and substitution effect
Hicks and Allen Substitution Effect – Slutsky substitution Effect. Income and Substitution Effects (Slutsky and Hicks).
Derivation of demand curve using Indifference curve analysis.
Types of Utility functions- Perfect substitute, fixed-coefficient , Cobb-Douglas, and CES functions.
Application – Derivation of demand curve for Perfect complement, Perfect substitute, and discrete goods.
Revealed Preference theory : Concept, properties, SARP & WARP, Derivation of demand curve using revealed preference theory.
To conclude we will summarize the three approaches to Consumer theory and sum-up the overall development in the theory of demand analysis.
Reading
The workbook by Varian and Bergstrom may be used for problems.
Advanced Economic Theory (Microeconomic Analysis) by H L Ahuja, S Chand, selected chapters
Criteria for issue of Certificate for this Course
75% score is required to get a certificate in this course. Assignment weightage is 1/3rd , Final exam and Presentation weightage is 2/3rd.
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