Courses Catalogue

Introduction To Micro Economics

COURSE CODE: ECO 1101
COURSE CREDIT UNIT: 3
ACADEMIC PROGRAMME: Business Administration (Finance & Banking)
COLLEGE/SCHOOL/FACULTY: College of Economics and Management
STATUS: Core
PROGRAMME TYPE: Undergraduate

Course Content and Outline

COURSE CONTENT

Introduction to concepts and definitions

  • Meaning of microeconomics
  • Evolution of Economic theory
  • Purpose and principles of Economic theory
  • Positive and normative economics
  • Scarcity choice and opportunity cost
  • Market functions and equilibrium
  • Economic systems and economic questions
  • Price mechanism and resource allocation

Demand and Supply

  • Individual demand for a commodity
  • The law of demand
  • Change in demand and change in quantity demanded
  • Analysis of the market demand
  • Types of Equilibrium

Elasticity

  • Meaning of Elasticity
  • Types of elasticity and their determinants
  • Measurement of elasticity

 Theory of consumer behavior

Cardinal utility Approach

  • Assumptions
  • Total and marginal utility analysis
  • Consumer equilibrium
  • Derivation of an individual demand curve
  • Critique of the cardinal utility approach

Ordinal utility Approach

  • Assumptions
  • Properties of indifference curve
  • Marginal rate of substitution and its application
  • Consumer equilibrium
  • Income consumption curve, price consumption curve and the Angel curve
  • Substitution and price effects
  • Price consumption curve and consumer curve
  • Critique of the indifference curve approach

Theory of Production

  • Production with one variable input: total production, average production and marginal production
  • Shapes of AP and MP curves
  • Stages of production
  • Production with two variable inputs
  • Isoquants – their properties and characteristics
  • Marginal rate of technical substitution
  • Isocosts and their characteristics
  • Production Equilibrium 
  • Expansion path concept and the region of production
  • Factor substitution and the elasticity of technical substitution
  • Increasing constant and increasing return to scale

Theory of Costs

  • Meaning of cost function, implicit and explicit costs
  • Short run and long-run average cost curve
  • Shape of LAC and its link with economies and diseconomies of scale and externalities
  • LAC curve as an envelope curve
  • Long run marginal costs
  • Long run total cost
  • Tabulation and derivation of different costs of production
  • Production function and cost curve i.e. total production and marginal production

Market Structures

  • Perfect Competition
  • Factors for classifying markets
  • Price and output under perfect competition
  • Characteristics of perfect competition
  • Price determination
  • Short run equilibrium of a firm
  • Short run profit and loss
  • Long run equilibrium of a firm
  • Firm and industry analysis
  • Constant, increasing and decreasing cost industries

Monopoly

  • Price and operation under pure monopoly
  • Basis of monopoly powers
  • MR curve and elasticity
  • Short run equilibrium
  • Regulation of monopoly (price control, lamp sum and per unit taxes)
  • Price discrimination

Monopsony

  • Monopolistic competition
  • Understanding monopolistic competition
  • Conditions necessary for monopolistic competition to succeed
  • Short run and long run equilibrium
  • Excess capacity analysis

Oligopoly

·         Understanding oligopoly

·         Characteristics of oligopoly

·         Equilibrium position

·         Kinked demand curve

 

MODE OF DELIVERY

·         Lectures

·         Reading assignments

·         Field trips

·         Discussion

INSTRUCTIONAL MATERIALS/EQUIPMENT

  • Whiteboard and Markers
  • Flip Charts
  • LCD Projectors
  • CDs, DVDs and Tapes