Punjab Group of Colleges

Program Bachelors in Business Administration

Credit Hours 3
Duration 16 Wees ! 3" sessions
Prere#uisites $!A
%esource Person
Principles of &icroeconomics
'C($ "))3
Course Description
The course would focus on understanding the main concepts of Microeconomics and functioning of the
market system as a mechanism for resource allocation. For this purpose selected market structures
would be studied. The students would also be exposed to the analysis of government policies such as
taxes and control on prices to understand their effect on allocation of resources. The situation of
government intervention in the market would also be examined when Externalities cause market
failures. Various market structures would also be studied to understand the conditions of the market
equilibrium in the shortrun and the longrun.
Course (bjecti*es
!fter studying the course the students will be able to.
1+ "nderstand basic concepts of the Microeconomics.
"+ !pply tools of demand and supply for efficient resource allocation and profit maximi#ation.
3+ $dentify core economic issues related to business firms.
,+ %omprehend the benefits of market efficiency.
-+ !naly#e decision making process at individual and firm level.
6+ &ifferentiate the behavior of firms under different market conditions.
.earning (bjecti*es
!fter studying this course the students should be able to'
"nderstand basic principles of Microeconomics governing their daily lives
!pply the skills learned through this course in analy#ing and expecting in market outcomes
under certain conditions (for example change in taxes)
Find opportunities and manage challenges offered by the market mechanisms as buyers as well
as sellers
/iolation of Academic Honest0 Polic01
$f any two pro*ects+assignments are identical or partially identical, a #ero will be awarded. The repetition
of such kind may lead to an -F. grade in the course.
Ho2 to 3eep 4our Professor Happ01
%lass attendance is mandatory. /ou may miss up to 0 class sessions. 1n the seventh absence, you will
be withdrawn from the course. !s a courtesy to the instructor and other students, be prepared to arrive at
class and be in your seat on time. $n addition, please note that each class lasts for 23 minutes.
!lso keep in mind some general rules as given below'
%ell phones should be powered off or be kept in silent mode during class timings.
Eatables are not allowed in the classroom.
!ny disruptive behavior during the lecture will not be tolerated.
The &ress %ode has to be observed, no warnings will be given, and violators will be asked
politely to leave the class and consequently will be marked absent.
Participation1
4tudents are required to attend all classes and are urged read all the assigned material in advance of class
(although not necessarily with perfect comprehension). !dvanced preparation and class participation are
crucial for periods in which we discuss cases. &uring discussion sessions, the instructor generally keeps
track of the insightful and useful comments students make, therefore, do not hesitate to contribute in this
regard. (!ny unproductive contribution shall not be rewarded)
Assessment and '*aluation
'5am 60pe Percentage 789
5ui##es 63
!ssignments 63
%lass 7articipation 63
Mid Term 83
Final Term 93
Total points 633
%ecommended 6e5t
%ourse 7ack
Calendar of acti*ities
Wee Contents
6ass!
Acti*ities
6
6he Principles of 'conomics
:ow 7eople Make &ecisions
:ow 7eople $nteract
:ow the Economy as a ;hole ;orks
%onclusion
<
6he &aret :orces of ;uppl0 and Demand
Markets and %ompetition
&emand
4upply
4upply and &emand Together
%onclusion' :ow 7rices !llocate =esources

8
'lasticit0 and <ts Application
The Elasticity of &emand
The Elasticity of 4upply
Three !pplications of 4upply, &emand, and Elasticity
%onclusion
!ssignment 6
9
;uppl0= Demand= and Go*ernment Policies
%ontrols on 7rices
Taxes
%onclusion
5ui# 6
>
Consumer= Producer= and the 'fficienc0 of &arets
%onsumer 4urplus
7roducer 4urplus
Market Efficiency
%onclusion' Market Efficiency and Market Failure
0 Application1 6he Costs of 6a5ation
The &eadweight ?oss of Taxation
The &eterminants of the &eadweight ?oss
&eadweight ?oss and Tax =evenue as Taxes Vary
%onclusion
@
'5ternalities
Externalities and Market $nefficiency
7rivate 4olutions to Externalities
7ublic 7olicies Towards Externalities
%onclusion
A &id> 6erm
2
Public Goods and Common %esources
The &ifferent Bind of Coods
7ublic Coods
%ommon =esources
%onclusion' The $mportance of 7roperty =ights
63
6he Design of the 6a5 ;0stem
! Financial 1verview of the ".4. Covernment
Taxes and Efficiency
Taxes and Equity
%onclusion' The Tradeoff between Equity and Efficiency
!ssignment <
66
6he Cost of Production
;hat are %ostsD
7roduction and %osts
The Various Measures of %ost
%osts in the 4hort =un and in the ?ong =un
%onclusion
6<
:irms in Competiti*e &arets
;hat is a %ompetitive MarketD
7rofit Maximi#ation and the %ompetitive FirmEs 4upply
%urve
The 4upply %urve in a %ompetitive Market
%onclusion' Fehind the 4upply %urve
68 &onopol0 5"$G<
;hy Monopolies !rise
:ow Monopolies Make 7roduction and 7ricing &ecisions
The ;elfare %ost of Monopoly
7ublic 7olicies toward Monopolies
7rice &iscrimination
%onclusion' The 7revalence of Monopoly
69
(ligopol0
Fetween Monopoly and 7erfect %ompetition
Markets with 1nly ! Few 4ellers
Came Theory and the Economics of %ooperation
7ublic 7olicies Toward 1ligopolies
%onclusion
6>
&onopolistic Competition
%ompetition with &ifferentiated 7roducts
!dvertising
%onclusion
60
6he 6heor0 of Consumer Choice
The Fudget %onstraint' ;hat the %onsumer can !fford
7references' ;hat the %onsumer ;ants
1ptimi#ation' ;hat the %onsumer %hooses
Four !pplications
%onclusion' &o 7eople =eally Think This ;ayD
6@ :inal 6erm