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Economics Core Course –I: Introductory Microeconomics

Tentative Teaching Plan

Unit 1: Exploring the subject matter of Economics
1.1 Scope and Method of Economics:
Wants, Scarcity, Competing Ends and Choice - Defining Economics,  Microeconomics and Macroeconomics

Thinking like an economist: Basic Economics Questions

Normative Economics and Positive Economics
​​Property Rights, Market Failure, Externality and Market Power

Tutorials 1

2.1 Elementary theory of Demand: Determinants of household demand and market demand, movement along and shift of the demand curve
2.2 Elementary theory of Supply: factors influencing supply, the supply curve, movement along and shift of the supply curve
2.3 The Elementary theory of market price: Determination of equilibrium price in a competitive market.
2.4 Market Adjustment without Government (with illustrations):the effect of shifts in demand and supply, the excess demand function, existence, uniqueness and stability of equilibrium
Unit-2: Market and Adjustments
The Decision-takers–households, firms and central authorities
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The Concepts of Markets– individual market,separation of individual markets,interlinking of individual markets.

Difference among markets–competitiveness, goods and factor markets,free and controlled markets.

Market and non-market sectors,public and private sectors, economies–free market,command and mixed.
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Different Goods:Public goods,Private goods,Common resources and

Natural Monopolies.

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Market and competition;Demand and its determinants; Supply and its determinants; The relation of Quantity Demand with Price (using arguments of income and substitution effects);relation of Quantity Supply with Price (using increasing costs argument); Laws of Demand and Supply; Demand and Supply as Planning Curves; movement along and shift of the curve; Demand,Supply and Other factors.
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Equilibrium and Disequilibrium
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Market Adjustment without Government (with illustrations)
Unit-3: Market Sensitivity and Elasticity
Importance of Elasticity in Choice-Decisions
Method of Calculation–Arc Elasticity.Point Elasticity–definition
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Demand and Supply Elasticities – types of elasticity and factors effecting elasticity.
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Demand Elasticity and Revenue
Income and Cross Price elasticity
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Long run and Short Run elasticities of Demand and Supply
Case Studies–OPEC and Oil Price,Illegal Drugs
Unit-4: Government Intervention

The Economic Role of Government with respect to Market:

Price Ceiling, Price Floor and Market Adjustment(with short case studies of agricultural administered price, minimum wage and rent control);

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Black Market, Tax and market adjustment;  Elasticity and Tax incidence.
Unit-5: Utilitarian Approach
The History of Utility Theory–From Cardinal to Ordinal Approach.
Utility in Cardinal Approach–Utility and choice,Total Utility and Marginal utility,Utility and choice- maximization,marginal utility theory of demand
Unit-6: Markets and Welfare
Willingness to Pay and Consumer Surplus
Willingness to Sell and Producer Surplus
Market Efficiency and Deadweight Loss
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Deadweight Loss of Taxation.
(Lecture delivered on  September 4, 2017)
Unit-7: Market failure, Externalities and Public Goods
Market Failure (definition) and its causes.
Externalities and market inefficiency: difference between social costs and private costs
Positive and negative externalities, Private Solution
Unit-8: Conflicting and Complementary Roles of Market and Government
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