Gokhale Institute of Politics and Economics
Syllabus for BoS meeting held on: AC meeting held on :
Revision/Approval
1 Course Code C01
2 Course Title Microeconomics
3 Programme MA Economics, M.SC all Program
4 Semesters Semester: I
5 Nature of the course
Core
6 Credit 04
7 Level U.G. / P.G
8 To be implemented from From the Academic Year: _2022-23_______
Academic Year
Introduction This course introduces students to fundamental microeconomics concepts,
including consumer theory, decision-making under uncertainty, firm behavior, market
structures, and information economics. It also provides an introduction to game the
Rationale The course aims to develop an understanding of economic decision-making
at the individual and firm levels. It also covers market structures, strategic interactions,
and the role of information asymmetry in economics.
Learner’s Learning Outcomes/Course Outcomes:
CO To acquaint the students with introductory consumer theory and the limitations with an
1 orientation towards behavioural approach (Module I)
CO To understand how the choice will be made under uncertainty and how the attitude
2 towards risk will be determined. (Module II)
CO To introduce to the students the concepts associated with the functioning of a firm.
3 (Module III)
CO To study the various types of markets prevalent in an economy and the nature of their
4 decision making (Module IV)
CO To study the information economics i.e. role of asymmetric information and its way out,
5 designing of optimum incentive scheme under information asymmetry (Module V)
CO To acquaint the students with the basics of game theory (Module VI)
6
Course Objectives
knowledge based :Understanding key concepts of microeconomics and theories
skill based :Applying mathematical and graphical techniques in economic analysis.
value based:Developing critical thinking and problem-solving skills in economics.
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Gokhale Institute of Politics and Economics
Mo Course Content No of
dule Lectures
(in hrs)
I Consumer Theory 08
Preference Relations and Their Properties
Consumer Preferences and Utility Functions
Budget Constraint, Utility Maximization, and Demand
Function
Indirect Utility Function and Roy’s Identity
Revealed Preferences and Endowments
Limitations of Consumer Theory
Behavioral Economics Approach
II Choice Under Uncertainty 12
Expected Utility Model and Utility on Lotteries
Prospect Theory and Critiques of Expected Utility Model
Measures of Risk: Domar-Musgrave Index, Roy’s Safety
Index, Mean-Variance, Mini-Max Regret
Risk Aversion: Jensen’s Inequality, Arrow-Pratt Measures,
Risk Premium
Classes of Utility Functions and Comparative Statics
Applications in Economic Decision-Making
III Theory of Firm 6
Theory of Organization and Measurement of Inputs and
Outputs
Profit Maximization and Comparative Statics
Profit Function, Hotelling's Lemma, Factor Demand, Supply
Function
Cost Minimization, Short-Run and Long-Run Cost Functions
Duality Between Production and Cost Functions
IV Theory of Market 8
Perfect Competition: Market Equilibrium (Short-Run and
Long-Run)
Monopoly: Power, Pricing, Welfare Effects, Price
Discrimination (1st, 2nd, 3rd Degree)
Oligopoly: Cournot and Bertrand Equilibrium, Quantity &
Price Leadership
Spatial Competition: Linear City Model, Circular City
Model
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Gokhale Institute of Politics and Economics
Market Failures, Public Goods, and Welfare Economics
V Information Economics 10
Types of Asymmetric Information: Moral Hazard, Adverse
Selection, Signaling
Hidden Action Models and Contract Design
Adverse Selection: Akerlof’s Lemons Model
Signaling: Spence’s Model of Education
Pooling and Separating Equilibria
VI Introduction to Game Theory 8
Normal Form and Extensive Form Representation
Nash Equilibrium, Mixed Strategies
Repeated Games and Sequential Games
MODULE WISE SUGGESTED READINGS (APA Style )
Mo Essential Reading
dule
I 1. Mas-Colell, A., Whinston, M. D., & Green, J. R. (1995).
Microeconomic Theory. Oxford University Press.
2. Serrano, R., & Feldman, M. A. (2018). A Short Course in
Intermediate Microeconomics with Calculus. Cambridge
University Press
3. Varian, H. R. (1992). Microeconomic Analysis (3rd ed.).
W.W. Norton & Company
Additional Readings
1. Beshears, J., Choi, J. J., Laibson, D., & Madrian, B. C. (2008).
How are preferences revealed? Journal of Public Economics,
92(8–9), 1787–1794.
https://doi.org/10.1016/j.jpubeco.2008.04.010
2. Gravelle, H., & Rees, R. (2003). Microeconomics (3rd ed.).
Prentice Hall.
Mo Essential Reading
dule
II 1. Pindyck, R. S., & Rubinfeld, D. L. (2017). Microeconomics (9th
ed.). Pearson College.
2. Varian, H.R. (1992) Microeconomic Analysis. 3rd Edition, W. W.
Norton & Company, New York.
Additional Reading
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Gokhale Institute of Politics and Economics
1. Arrow, K.J. (1965) Aspects of the Theory of Risk Bearing. Yrjö
Jahnssonin Säätiö, Helsinki.
2. Cai, C.W. (2020), Nudging the financial market? A review of the
nudge theory. Account Finance, 60: 3341-
3365. https://doi.org/10.1111/acfi.12471
3. Kahneman, D., & Tversky, A. (1979). Prospect Theory: An
Analysis of Decision under Risk. Econometrica, 47(2), 263–291.
https://doi.org/10.2307/1914185
4. Pompian, M. A. (2017). Risk tolerance and behavioral finance.
Investment Management Consultants Association.
Mo Essential Reading
dule 1. Pindyck, R. S., & Rubinfeld, D. L. (2017). Microeconomics (9th
III ed.). Pearson College
2. Varian, H. R. (1992). Microeconomic Analysis (3rd ed.). W.W.
Norton & Company
Mo Essential Reading
dule
IV 1. Pindyck, R. S., & Rubinfeld, D. L. (2017). Microeconomics (9th
ed.). Pearson College
Mo Essential Reading
dule
V
1. Kreps, D. (1992). A Course in Microeconomic Theory. Prentice
Hall of India.
2. Varian, H. R. (1992). Microeconomic Analysis (3rd ed.). W.W.
Norton & Company
Additional Reading:
1. Miller, G., & Whitford, A. (2007). The principal's moral hazard:
Constraints on the use of incentives in hierarchy. Journal of Public
Administration Research and Theory, 17(2), 213–233.
https://doi.org/10.1093/jopart/mul004
Mo Essential reading:
dule
VI 1. Gibbons, R. (1992). Game Theory for Applied Economists.
Princeton University Press.
Additional reading:
Berg, Joyce, John Dickhaut, Kevin McCabe. “Trust, Reciprocity,
and Social History.” Games and Economic Behavior 10, (1995):
123,122142. http://dibartolomeo.comunite.it/courses/ee/Berg%20et
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Gokhale Institute of Politics and Economics
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Teaching Pedagogy
Lecture
Group Discussion
Presentations
Flip classroom
Case study
Data Analysis
Evaluation Method
Continuous Evaluation
Quiz
Assignment / viva voce
Written Test
End-semester Assessment
Written Test
