Course Objective
This course is designed to expose the students to the basic principles of microeconomic theory. The emphasis will be on thinking like an economist and the course will illustrate how microeconomic concepts can be applied to analyze real-life situations.
Course Learning Outcomes
The course introduces the students to the first course in economics from the perspective of individual decision making as consumers and producers. The students learn some basic principles of microeconomics, interactions of supply and demand, and characteristics of perfect and imperfect markets.
Unit 1
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

Unit 2
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
Unit 3
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
Unit 4
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
Unit 5
Imperfect Market Structure Monopoly and anti-trust policy; government policies towards competition; imperfect competition
Unit 6
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
References

1. Bernheim, B., Whinston, M. (2009). Microeconomics. Tata McGraw-Hill.
2. Mankiw, N. (2007). Economics: Principles and applications, 4th ed. Cengage Learning.

Teaching Learning Process
Lectures and tutorials
Assessment Methods
Internal assessment and final examination as per CBCS rules
Keywords
Supply, demand, elasticity, consumer behaviour, firm behaviour, perfect and imperfect markets.