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Department of Business Administration

Course Title: Principles of Microeconomics

Course Code: ECO211

Pre-requisite Courses: Introduction to Business

Credit Hours: Three (3)

Semester: Second (2)

Degree: BBA Program

Course Description: The course introduces the students to the fundamentals of economics and how individual

units operate in the economy. The topics included are introduction to microeconomics,

law of demand and supply, theory of cost and market mechanism, price and output

determination under different market structures.

Course Objectives: The course has been designed to enable the students:

1. To understand and discuss the fundamental concepts of Economics

2. To have a sound idea of the factors involved in allocating of scarce resource

3. To identify the roles carried out by different markets

4. To posses a theoretical awareness of basic economic theories and models for

allocation of scarce resources to derive achieve maximum satisfaction

Learning Outcomes: At the end of this course it is expected that the student should be

able to:

1. Create a meaningful understanding of basic concepts about economics.

2. Analyze the allocation of scarce resources.

3. Use of limited resource to fulfill the maximum needs and wants.

4. Apply the concept of opportunity cost and apply this concept to his practical life.

5. Analyze Economic problem of allocation and distribution of resources.

6. Explain concept and factors that determine demand and supply.

7. To create an understanding of elasticity of demand and supply.

8. Differentiate between change in quantity supplied and change in supply.

9. Discuss equilibrium level of price and may comment about shortages and surpluses.

10. Describe and analyze the total revenue, average and marginal revenue.

11. Discuss total cost and its different features.

12. Discuss different examples related to this market structure.

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Teaching Methodology:

Learning will be accomplished through lectures, outside readings, case analysis and

student participation in classroom discussion and presentations. Grading will tend to

focus on students’ overall personality rather than on one or two aspects

Code of Conduct:

Students have to follow the rules stated below to avoid a failing grade in the course:

Understand and follow the University policy regarding attendance.

Arrive in and leave the classroom strictly on time. Late arrival will be marked as

absence. If you leave the classroom in the middle of a session even for a short

while, you will be marked absent.

Keep your cell phone off during the class.

Do the assigned readings for a class before coming to the class.

Maintain a disciplined, cordial, and respectful attitude towards the teacher and

your fellow students.

Submit your homework on the due date before the class begins.

Do not plagiarize from books, journals, or the internet.

Do not cheat (make someone else do your work or present work for some other

course as work for this course).

The teacher’s decisions about marks and grade will be final

Course Contents:

Week Topics to be covered Remarks

1. Introduction to Microeconomics and the use of graphs and

tables.

a) Definition of Economics

b) Importance of Economics in our life

c) Needs vs. Wants

d) Opportunity Cost

e) Different Graphs and Curves

f) Ten Principles of Economics

2. Thinking Like an Economist &

Assignment

Interdependence and the Gains from Trade

a) Think in terms of alternatives.

b) Evaluate the cost of individual and social choices.

c) How certain events and issues are inter-related.

d) The Economic Way of Thinking

i.e. Descriptive and Analytical (abstract reasoning)

e) Absolute Advantage and Comparative Advantage

f) Benefits of Trade

3. Demand Model Quiz

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a) Definition of demand

b) Quantity Demand

c) Determinants of Demand

d) Law of Demand

e) Change in Quantity Demanded

f) Change in Demand

4. Supply Model and Market Equilibrium,

Project

Effects of shifts in demand and supply curve on Market

Equilibrium

a) Definition of Supply

b) Quantity Supplied

c) Determinants of Supply

d) Law of Supply

e) Change in Quantity Supplied and Change in Supply

f) Market Equilibrium

5.

Elasticity

Assignment

&

Quiz

a) What is elasticity?

b) Different types of elasticity

c) Importance and use of elasticity

6.

Elasticity (continued)

a) Producers’ and Consumers’ perspective

b) Elasticity and Total Revenue

7. Supply, Demand, The Costs of Taxation and Government

Policies

Assignment

a) Price Ceiling and Price Flooring

b) Consumer Surplus

c) Producer Surplus

d) What is tax

f) Effect of tax on market equilibrium.

g) Deadweight loss

h) Effects of tax on total surplus

MID-TERM EXAMINATION

8. Cardinal Utility Theory

a) Introduction of cardinal and ordinal utility theory

b) Theory of consumer behavior

c) Law of diminishing marginal utility

d) Law of equi-marginal utility

9. Ordinal Utility Theory Assignment

&

Quiz

a) Background of ordinal utility theory

b) Theory of consumer choice

c) Indifference Curve and Budget Line

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d) Total Price effect (Income effect and Substitution effect)

10. Production Theory and Cost Analysis

Project

Feedback

a) Total Revenue, Average Revenue and Marginal Revenue

b) Fixed and Variable Cost

c) Total Cost, Average Cost and Marginal Cost

d) Optimum Level of Production

e) Economies of scale

11. Isoquant and Isocost Approach Project

Final

Submission

a) Overview of Isoquant and Isocost

b) The least cost factor combination

c) Producer’s Equilibrium and Optimization

12. Perfect Competition

a) Overview of Perfect Competition

b) Its Characteristics (Advantages and Disadvantages)

c) Firm’s Equilibrium under Perfect Competition

d) Graphical presentation (Long run and Short run)

13. Monopoly and Monopolistic Competition

Quiz

a) Overview of Monopoly and Monopolistic

b) Its Characteristics (Advantages and Disadvantages)

c) Firm’s Equilibrium under Monopoly and Monopolistic

d) Graphical presentation (Long run and Short run)

14. Duopoly and Oligopoly Competition

a) Overview of Duopoly and Oligopoly

b) Its Characteristics (Advantages and Disadvantages)

c) Firm’s Equilibrium under Duopoly and Oligopoly

d) Graphical presentation (Long run and Short run)

15. PROJECT PRESENTATIONS

FINAL EXAMINATION

Rescheduling of Class:

The teachers at Iqra University are very particular about taking their classes, but in case

of an emergency, an alternate teacher may conduct the class. Students are informed

through SMS in case of rescheduling of a class.

Grading Policy:

‘A’ Grade: 88 and above

‘B+’ Grade: 81-87

‘B’ Grade: 74-80

‘C+’ Grade: 67-73

‘C’ Grade: 60-66

‘F’ Grade: Below 60

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Marks Distribution of 100%:

Quizzes ______10_____

Assignments/Case Studies: ______10_____

Project/Project presentations: ______15_____

Mid-term ______25_____

Final Exam ______40_____

Total 100____

Recommended Reading(s):

1.

Microeconomics, Robert Pindyck, Daniel Rubinfeld, Prentice Hall, 8th

edition (March 11, 2012)

ISBN-10: 013285712X; ISBN-13: 978-0132857123

2. Economics, Michael Parkin, Prentice Hall, 11th

edition (March 26, 2013)

ISBN-10: 0133423921; ISBN-13: 9780133423921

3. In addition the teacher may prescribe any additional reading material.

Reference Book(s):

1.

Principles of Economics, N. Gregory Mankiw, South-Western College Pub, 6th

edition (February 10, 2011)

ISBN-10: 0538453052; ISBN-13: 978-0538453059

2. Economics, Paul A. Samuelson, William D. Nordhaus, McGraw-Hill/Irwin, 18th

edition (July 27, 2004)

ISBN-10: 0072872055; ISBN-13: 978-0072872057

3. Economics Micro & Macro (CliffsAP), Ronald Pirayoff, Cliffs Notes, 1st edition,

(February 27, 2004)

ISBN-10: 076453999X; ISBN-13: 978-0764539992

4. *Principles of Microeconomics, Karl E. Case, Ray C Fair, Sharon Oster, Prentice

Hall, 11th

edition *(Estimated Availability: May 10, 2013)

ISBN-10: 0133450872 • ISBN-13: 9780133450873

5. Schaum's Outline of Microeconomics, Dominick Salvatore, McGraw-Hill, 4th

edition (January 27, 2011)

ISBN-10: 0071755454; ISBN-13: 978-0071755450