ECO101: Principles of Microeconomics

Department of Economics and Social Sciences, BRAC University

Fall 2013

Instructor : Sarah Salahuddin (SSU)

Office : UB40712
Email : sarah.s@bracuniversity.ac.bd
Office Hours : Sunday, Monday, Tuesday, Wednesday (12.30 am – 2.00 pm)
Class Schedule:

Section Day Time Room No.

1 Monday, Wednesday 9.30-10.50 UB10104

2 Monday, Wednesday 11.00-12.20 UB10104

Description:
This is the first course in Microeconomics for the students of Economics major. This course is also required for BBA
major students as an introduction to Microeconomics. The aim of the course is to provide a non-technical
introduction to the basic microeconomic theory frequently used in decision making procedure, mostly by using
diagrams and intuitive approach. This course presents microeconomic theory and applications of consumer and
producer behavior, and market structure at freshman level. In addition to standard market models, the course will
provide an introduction to factor markets, market failure and scope of government intervention.

Upon completion of the course the students are expected to:

ƒ Have thorough understanding of the key concepts pertaining to the microeconomic behavior of different
economic agents like consumers, firms and the government
ƒ Acquaint the student with basic tools and techniques frequently used in understanding and analyzing real life
economic concepts
ƒ Have an introduction to the theoretical framework of microeconomics that would be developed at the
intermediate level
PREREQUISITES:
Ideally ECO 101 should not have any prerequisites, since it is the first course in economics. The only requirement
for understanding the tools and techniques developed in the course is High-school mathematics. Thus for the
students coming with Humanities or Commerce background and did not have mathematics in 12th grade may find
some of the tools developed in ECO 101 difficult to grasp, and thus complete at least MAT 101 before taking this
course. However, students who did not have 12th grade math but studied Economics in A-Levels can take the
course with their 10th grade math background.

Recommended Text:
[

ƒ Krugman, Paul and Wells, Robin, Microeconomics, 2005, Worth Publishers.

ƒ Parkin, M., Powell, M. and Mathews, K., Economics, 7th Edition, Pearson Education Limited.

Course Evaluation:
Quizzes (average of best 2 out of 3) 15%
Assignments (average of best 2 out of 3) 15%
Midterm examination 20%
Attendance & Class Participation 5%
Final 45%
Total 100%

There will be no make-up quizzes, midterm in case you missed one

Tentative Course Outline:
Author Chapter Topics
KW 1 • Economy and Economics
• The Economic Problem: Scarcity, Choice and Opportunity Cost
• Micro VS Macro
• Production Possibilities Frontier and Trade Offs
KW 2 • Variables and graphs
• Importance of Graphs and Slope in Economics
• Calculating slope
• Positive VS Normative Economics

KW 3 • Demand, demand schedule, quantity demanded and demand curve

• Movement along the demand curve
• Factors affecting demand and shifts in demand curve
• Supply, supply schedule, quantity supplied and supply curve
• Movement along the supply curve
• Factors affecting supply and shifts in supply curve
• Mathematical Note: Demand, Supply and Market Equilibrium
• Concept of Market Equilibrium
• Finding the Market Equilibrium
• Changes in Market Equilibrium-shortage and surplus
• Simultaneous shift in demand and supply

KW 4 • Price Ceiling and Price Floor

• Controlling Quantities
• Tax and quantity control
KW 5 • Elasticity
• Price Elasticity of Demand
• Price Elasticity of Supply
• Factors affecting elasticity
• Total Revenue and elasticity
• Income and Cross Price Elasticity

KW 6 • Consumer Surplus and Producer Surplus

• Elasticity and taxes
KW 8 • Theory of Production
• Production Function and Total Product Curve
• Isoquants and Isocost
• Theory of Cost
• Short run cost curves
• Long run cost curves
• Economics of scale

KW 9 • Types of Market Structure

• Perfect Competition: Characteristics
• Rules of Profit Maximization: Total and Marginal Approaches
• Profit Maximization in the Short-run and Long -Run
• Short run and long run supply curve of a firm

KW 14 • Monopoly: Characteristics
• Natural Monopoly
• Rules of Profit Maximization
• Profit Maximization in the Short-run and Long –Run
• Price Discrimination
• Welfare and monopoly
• Government intervention and monopoly
• Price Discrimination

KW 12 • What happens in the market for factors (or inputs)?

• Marginal productivity and factor demand
• Marginal productivity theory and income distribution
• Labor supply curve

Midterm Examination: October 27, 2013 (SEC 1 & 2)