Course Contents

• The principals of Economics: How people make decision. o How people interact. o How the economy as a whole works • The market forces of supply and demand o Markets and Competition. o Demand. o Supply. o Supply and demand together • The Costs of Production o What is cost. o Production and cost. o The various Merasures of cost. o Short and long run cost. • Externalities o Externalities and the market inefficiency. o Private solution to externalities. o Public policy towards externalities • Firm in Competitive Markets o Meaning of competition o Profit maximization and competitive firm’s supply curve o Supply curve in competitive market • Monopoly and Oligopoly o Why monopolies arise o How monopolies make production and pricing decisions o Welfare cost of monopolies o Between monopoly and perfect competition o Market with only a few sellers o Game theory and Economics of Cooperation • The Markets for the Factors of Production o The Demand for Labor o The Supply of Labor o Equilibrium in the Labor Market o The other factors of production o Land and Capital

Course Synopsis

The objective of this course is to provide the students a good understanding of principles of Micro Economics and its relevance with the business world.

Course Learning Outcomes

After completing the program the student should be able to: • Define the problem of scarcity, opportunity cost, the functioning of free market, command and mixed economies and the difference between macroeconomics and microeconomics. • Describe and interpret the basic theory of consumer behavior and demand including the concept of utility, the law of diminishing marginal utility, the distinction between Giffen, inferior and normal goods, the distinction between substitute and complementary goods, the difference between individual and market demand, and the notion and measurement of elasticity (own-price, cross and income elasticity). • Employ the theory of supply from a fundamental understanding of costs; define the difference between the short-run and the long-run; differentiate between fixed, sunk and variable costs; derive marginal, average and total costs; understand the nature and relevance of economies and diseconomies of scale and the concept of elasticity of supply.