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**The Intermediate Micro Economics – I Course for BA (Hons) Economics Semester III, Delhi University has been taught by Mr. Dheeraj Suri. The Video Lectures are based upon the books prescribed by the University of Delhi. The Duration of Video Lectures is approximately 50 Hours.**

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**Demo Lectures**

**Demo Lectures****Demo PDF of Study Material**

Chapter-3-Utility

**Demo PDF of Study Material****Demo Quiz**

**Exam Pattern**

**The Question Paper of 75 Marks Will Have Two Parts (Part A & Part B)**

**Part A Will be of 45 Marks and it is Based Upon Topic 1 **

**Part B Will be of 30 Marks and it is based Upon Topic 2**

**Course Content**** of Our ****Video Lectures**

**Course Content****of Our****Video Lectures****Topic 1 : Consumer Theory [45 Marks]**

**Topic 1 : Consumer Theory [45 Marks]**

**Part A of Question Paper will be Based Upon this**

**You will be Required to do 3 out of 4 Questions of 15 Marks Each in Part A**

**Chapter 1 : Budget Constraint [218 Minutes]**

**Based Upon Hal Varian Chapter 2**

**Number of Lectures 7 Lectures**

**Total Duration of Lectures 218 Minutes**

**Number of Questions in Notes 40 Questions**

**Number of MCQ Tests on this Chapter 2 Tests**

**Important Topics Covered**

**Budget Constraint, Budget Set, Budget Line, Pivot & Shift in the Budget Line, Numeraire, Tax & Subsidies, Kink in the Budget Line, Rationing, Food Stamp Program****, Back Questions of Reading & Workbook**

**Budget Constraint, Budget Set, Budget Line, Pivot & Shift in the Budget Line, Numeraire, Tax & Subsidies, Kink in the Budget Line, Rationing, Food Stamp Program**

**, Back Questions of Reading & Workbook****Chapter 2 : Preference [213 Minutes]**

**Based Upon Hal Varian Chapter 3**

**Based Upon Hal Varian Chapter 3****Number of Lectures 7 Lectures**

**Total Duration of Lectures 213 Minutes**

**Number of Questions in Notes 61 Questions**

**Number of MCQ Tests on this Chapter 2 Tests**

**Important Topics Covered**

**Consumer Preferences, Complete, Reflexive & Transitive Preferences, Indifference Curves, Economic Goods, Bads & Neutrals, Satiation Point, Discrete Goods, Well Behaved Preferences, Marginal Rate of Substitution****, Back Questions of Reading & Workbook**

**Consumer Preferences, Complete, Reflexive & Transitive Preferences, Indifference Curves, Economic Goods, Bads & Neutrals, Satiation Point, Discrete Goods, Well Behaved Preferences, Marginal Rate of Substitution****, Back Questions of Reading & Workbook****Chapter 3 : Utility [150 Minutes]**

**Based Upon Hal Varian Chapter 4**

**Number of Lectures 4 Lectures**

**Total Duration of Lectures 150 Minutes**

**Number of Questions in Notes 36 Questions**

**Number of MCQ Tests on this Chapter 2 Tests**

**Important Topics Covered**

**Ordinal & Cardinal Utility, Utility Functions, Monotonic Transformations, Examples of Utility Functions (Cobb-Douglas, CES, Perfect Substitutes, Perfect Complements, Quasi Linear Utility Function etc.)****, Back Questions of Reading & Workbook**

**Ordinal & Cardinal Utility, Utility Functions, Monotonic Transformations, Examples of Utility Functions (Cobb-Douglas, CES, Perfect Substitutes, Perfect Complements, Quasi Linear Utility Function etc.)**

**, Back Questions of Reading & Workbook****Chapter 4 : Choice [319 Minutes]**

**Based Upon Hal Varian Chapter 5**

**Based Upon Hal Varian Chapter 5****Number of Lectures 9 Lectures**

**Total Duration of Lectures 319 Minutes**

**Number of Questions in Notes 81 Questions**

**Number of MCQ Tests on this Chapter 2 Tests**

**Important Topics Covered**

**Consumer Equilibrium, Interior Optimum, Boundary Optimum, Concave Preferences, Demand Functions for Various Utility Functions, Income Tax V/s Quantity Tax****, Back Questions of Reading & Workbook**

**Consumer Equilibrium, Interior Optimum, Boundary Optimum, Concave Preferences, Demand Functions for Various Utility Functions, Income Tax V/s Quantity Tax**

**, Back Questions of Reading & Workbook****Chapter 5 : Demand [268 Minutes]**

**Based Upon Hal Varian Chapter 6**

**Number of Lectures 4 Lectures**

**Total Duration of Lectures 268 Minutes**

**Number of Questions in Notes 53 Questions**

**Number of MCQ Tests on this Chapter 2 Tests**

**Important Topics Covered**

**Demand** Functions, Normal Goods, Inferior Goods, Giffen Goods, Income Offer Curve, Engel Curve, Price Offer Curve, Demand Curve, Substitutes and Complements**, Back Questions of Reading & Workbook**

**Demand**Functions, Normal Goods, Inferior Goods, Giffen Goods, Income Offer Curve, Engel Curve, Price Offer Curve, Demand Curve, Substitutes and Complements

**, Back Questions of Reading & Workbook**

**Chapter 6 : Revealed Preference [171 Minutes]**

**Based Upon Hal Varian Chapter 7**

**Based Upon Hal Varian Chapter 7****Number of Lectures 4 Lectures**

**Total Duration of Lectures 171 Minutes**

**Number of Questions in Notes 28 Questions**

**Number of MCQ Tests on this Chapter 2 Tests**

**Important Topics Covered**

**Direct Revealed Preferences, Indirect Revealed Preferences, Weak Axiom of Revealed Preference (WARP), Strong Axiom of Revealed Preference (SARP), Quantity & Price Index Numbers and their effect on Consumers Welfare, Indexation of Social Security Payments****, Back Questions of Reading & Workbook**

**Direct Revealed Preferences, Indirect Revealed Preferences, Weak Axiom of Revealed Preference (WARP), Strong Axiom of Revealed Preference (SARP), Quantity & Price Index Numbers and their effect on Consumers Welfare, Indexation of Social Security Payments**

**, Back Questions of Reading & Workbook****Chapter 7 : Slutsky Equation [344 Minutes]**

**Based Upon Hal Varian Chapter 8**

**Number of Lectures 9 Lectures**

**Total Duration of Lectures 344 Minutes**

**Number of Questions in Notes 55 Questions**

**Number of MCQ Tests on this Chapter 4 Tests**

**Important Topics Covered**

**Price Effect, Income Effect, Substitution Effect, Slutsky Equation,** Separation of Income & Substitution Effect for Normal goods, Inferior Goods, Giffen goods and for Various Utility Functions, Law of Demand, Rebating a Tax, Voluntary Real Time Pricing, Hicksian Substitution & Income Effect**, Back Questions of Reading & Workbook**

**Price Effect, Income Effect, Substitution Effect, Slutsky Equation,**Separation of Income & Substitution Effect for Normal goods, Inferior Goods, Giffen goods and for Various Utility Functions, Law of Demand, Rebating a Tax, Voluntary Real Time Pricing, Hicksian Substitution & Income Effect

**, Back Questions of Reading & Workbook**

**Chapter 8 : Buying & Selling [441 Minutes]**

**Based Upon Hal Varian Chapter 9**

**Based Upon Hal Varian Chapter 9****Number of Lectures 8 Lectures**

**Total Duration of Lectures 441 Minutes**

**Number of Questions in Notes 33 Questions**

**Number of MCQ Tests on this Chapter 4 Tests**

**Important Topics Covered**

**Endowment, Gross Demand, Net Demand, Effect of Change in Endowment & Change in Price on Equilibrium**, Offer Curve, Demand Curve, Endowment Income Effect, Labour Supply, Effect of Change in Wage Rate & Overtime Wages on Labour Supply**, Back Questions of Reading & Workbook**

**, Offer Curve, Demand Curve, Endowment Income Effect, Labour Supply, Effect of Change in Wage Rate & Overtime Wages on Labour Supply**

**Endowment, Gross Demand, Net Demand, Effect of Change in Endowment & Change in Price on Equilibrium****, Back Questions of Reading & Workbook**

**Chapter 9 : Inter Temporal Choice [370 Minutes]**

**Based Upon Hal Varian Chapter 10**

**Number of Lectures 8 Lectures**

**Total Duration of Lectures 370 Minutes**

**Number of Questions in Notes 41 Questions**

**Number of MCQ Tests on this Chapter 2 Tests**

**Important Topics Covered**

**Present Value, Future Value, Annuity, Inter Temporal Budget Constraint, Consumer’s Equilibrium with Intertemporal Budget Constraint, Effect of Change in Interest Rate & Change in Inflation Rate on Consumer’s Equilibrium, Slutsky Equation & Intertemporal Choice, Relation Between Real & Nominal Interest Rates, Bonds****, Back Questions of Reading** & Workbook** **

**Present Value, Future Value, Annuity, Inter Temporal Budget Constraint, Consumer’s Equilibrium with Intertemporal Budget Constraint, Effect of Change in Interest Rate & Change in Inflation Rate on Consumer’s Equilibrium, Slutsky Equation & Intertemporal Choice, Relation Between Real & Nominal Interest Rates, Bonds**& Workbook

**, Back Questions of Reading**

**Chapter 10 : Risk & Uncertainty [536 Minutes]**

**Based Upon Bernheim & Whinston Chapter 11**

**Based Upon Bernheim & Whinston Chapter 11****Number of Lectures 11 Lectures**

**Total Duration of Lectures 536 Minutes**

**Number of Questions in Notes 36 Questions**

**Number of MCQ Tests on this Chapter 2 Tests**

**Important Topics Covered**

**Risk & State of Nature, Risk Preferences & Indifference Curves, Guaranteed Consumption, Expected Consumption, Certainty Equivalent, Risk Premium, Expected Utility, Nature & Demand for Insurance, Risk Management with Hedging, Diversification etc.****, Back Questions of Reading**

**Risk & State of Nature, Risk Preferences & Indifference Curves, Guaranteed Consumption, Expected Consumption, Certainty Equivalent, Risk Premium, Expected Utility, Nature & Demand for Insurance, Risk Management with Hedging, Diversification etc.****, Back Questions of Reading****Topic 2 : Production, Costs and Perfect Competition [30 Marks]**

**Part B of Question Paper will be Based Upon this**

**You will be Required to do 2 out of 3 Questions of 15 Marks Each in Part B**

**Chapter 11 : Production Functions [452 Minutes]**

**Based Upon Nicholson & Snyder Chapter 9**

**Number of Lectures 14 Lectures**

**Total Duration of Lectures 452 Minutes**

**Number of Questions in Notes 56 Questions**

**Number of MCQ Tests on this Chapter 4 Tests**

**Important Topics Covered**

**Production Function, Average & Marginal Products, Diminishing Marginal Productivity, Relation Between TP**_{L}, AP_{L} & MP_{L}, Isoquants, Properties of Isoquants, Shape of Isoquants for Various Production Functions (eg., Cobb-Douglas, CES, Fixed Proportions, Linear Production Function, Leontief Production Function etc.), MRTS, Elasticity of Substitution, Returns to Scale, Homogeneous & Homothetic Production Functions**, Back Questions of Reading**

**Production Function, Average & Marginal Products, Diminishing Marginal Productivity, Relation Between TP**

*, AP*_{L}*& MP*_{L}*, Isoquants, Properties of Isoquants, Shape of Isoquants for Various Production Functions (eg., Cobb-Douglas, CES, Fixed Proportions, Linear Production Function, Leontief Production Function etc.), MRTS, Elasticity of Substitution, Returns to Scale, Homogeneous & Homothetic Production Functions*_{L}**, Back Questions of Reading****Chapter 12 : Cost Functions [453 Minutes]**

**Based Upon Nicholson & Snyder Chapter 10**

**Based Upon Nicholson & Snyder Chapter 10****Number of Lectures 9 Lectures**

**Total Duration of Lectures 453 Minutes**

**Number of Questions in Notes 41 Questions**

**Number of MCQ Tests on this Chapter 2 Tests**

**Important Topics Covered**

**Cost Functions, Cost Minimizing Input Choices, Contingent Demand for Inputs, Firm’s Expansion Path, Derivations of Cost Functions for Various Production Functions, Properties of Cost Functions, Shephard’s Lemma,** Short Run & Long Run Costs, Relation Between TC, AC, MC & AVC, Effect of Change in Input Prices on Cost Curves**, Back Questions of Reading**

**Short Run & Long Run Costs, Relation Between TC, AC, MC & AVC, Effect of Change in Input Prices on Cost Curves**

**Cost Functions, Cost Minimizing Input Choices, Contingent Demand for Inputs, Firm’s Expansion Path, Derivations of Cost Functions for Various Production Functions, Properties of Cost Functions, Shephard’s Lemma,****, Back Questions of Reading**

**Chapter 13 : Profit [288 Minutes]**

**Based Upon Nicholson & Snyder Chapter 11**

**Number of Lectures 6 Lectures**

**Total Duration of Lectures 288 Minutes**

**Number of Questions in Notes 21 Questions**

**Number of MCQ Tests on this Chapter 4 Tests**

**Important Topics Covered**

**Profit Maximization, MR & Elasticity, Price-Marginal Cost Breakup, Short Run Supply by a Price Taking Firm, Shut Down Decisions, Profit Functions, Properties of Profit Functions, Producer Surplus, Short Run & Long Run Profit Functions, Profit Maximization & Input Demand, Unconditional Input Demands, Substitution Effect, Output Effect, Back Questions of Reading **

**Profit Maximization, MR & Elasticity, Price-Marginal Cost Breakup, Short Run Supply by a Price Taking Firm, Shut Down Decisions, Profit Functions, Properties of Profit Functions, Producer Surplus, Short Run & Long Run Profit Functions, Profit Maximization & Input Demand, Unconditional Input Demands, Substitution Effect, Output Effect, Back Questions of Reading**

**Solutions of Previous Year Papers**

**2021 Paper**

**Duration of Lectures : 110 Minutes**

**2020 Paper**

**Duration of Lectures : 100 Minutes**

**2019 Paper**

**Duration of Lectures : 110 Minutes**

**2018 Paper**

**Duration of Lectures : 105 Minutes**

**2017 Paper**

**Duration of Lectures : 110 Minutes**

**2016 Paper**

**Duration of Lectures : 105 Minutes**

**End of Syllabus**

**Course Description**

**Intermediate Microeconomics I (HC32)**

Core Course (CC) Credit: 6

Core Course (CC) Credit: 6

**Course Objective**

The course is designed to provide a sound training in microeconomic theory to formally analyze the behaviour of individual agents. Since students are already familiar with the quantitative techniques in the previous semesters, mathematical tools are used to facilitate understanding of the basic concepts. This course looks at the behaviour of the consumer and the producer and also covers the behaviour of a competitive firm.

**Course Learning Outcomes**

The course trains the students of Economics about the basic elements of consumer theory and production theory and the functioning of perfectly competitive market. This course aims to give students a solid grasp of microeconomic analysis at the intermediate-level using mathematical techniques where appropriate.

**Unit 1**

**Consumer theory.** Preference; utility; budget constraint; choice; demand; Slutsky equation; buying and selling; choice under risk and intertemporal choice; revealed preference

**Unit 2**

**Production, costs and perfect competition** Technology; isoquants; production with one and more variable inputs; returns to scale; short run and long run costs; cost curves in the short run and long run; review of perfect competition

**References**

1. Bernheim, B., Whinston, M. (2009). Microeconomics. Tata McGraw- Hill.

2. Snyder, C., Nicholson, W. (2010). Fundamentals of microeconomics. Cengage Learning.

3. Varian, H. (2010). Intermediate microeconomics: A modern approach, 8th ed. W. W. Norton.

**Additional Resources**

- Bergstrom, T., Varian, H. (2014). Workouts in intermediate microeconomics. W. W. Norton.