NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE I YEAR I TRIMESTER (JULY SEPTEMBER) 2008-09 1.

2 ECONOMICS I

Objective of the course

The course is an introductory course to microeconomics and its applications to law. Most of the microeconomics taught is covered in the text by Pindyck and Rubinfeld. Throughout we shall see how economics can help you to understand the behavior of individuals, firms and, markets. In the process we shall learn the use of economic methodologies used to study the law. The course will involve case studies, online discussions and exercises. The blog site that we shall use for our online discussions is http://wwecon.blogspot.com/.

Evaluation Scheme a) Test: Mid-Trimester End-Trimester Project Viva Attendance Total Course Outline
Module Lecture

Marks 30 30 25 10 05 ----------100 ----------Chapter

b) c) d)

Introduction to Economics and its relevance for the study of law. Discovering the relevance some illustrations : 1) The Intel antitrust case in European Union Ref: A Billion Euro Question Are the Chip Makers Pricing Policies Anticompetitive? Economist, May 16, 2009. 2) SEBIs regulation of Insider trading Ref: Will SEBI bite, at least now? Hindu Business Line at http://www.blonnet.com/iw/2002/11/10/stories/20021110000 10800.htm Positive and Normative Economics. Real and nominal prices Microeconomics and its relevance for decision making

Chapter 1

On-line article for discussion: The chocolate Industry in India and Cadburys market strategy. http://www.business-standard.com/india/news/paydaycelebrations/362424/

Micro Economics 2 The Market Mechanism - Supply and Demand Curves market equilibrium - Shifts in supply and demand curves. - Article for discussion: Gold. Store of value: Low returns on other investments and fears about the world economy have caused the price of gold to soar. Dont count on its continued rise , Jul 8th 2010 Economist http://www.economist.com/node/16536800 3 Elasticity of Supply and Demand - Analysis: Its relevance for government taxation and firm pricing decisions. Article for discussion: Taxing Indian cigarette consumers http://timesofindia.indiatimes.com/Opinion/Columnists/SAAiyar/Swaminomics/Killing-me-softly-with-yourbeedis/articleshow/4681883.cms Elasticity estimates for cigarette consumption: Abstract of paper by Rijo M. John available at : https://www.researchgate.net/publication/5429149_Price_el asticity_estimates_for_tobacco_products_in_India Blog discussion: Pepsi Coca Cola price competition in 1920s. 4 Consumer Choice using ordinal utility analysis. - Regulating consumer choice the when and how of it. Blog discussion: To be announced later. 5 Individual and market demand curves. - Consumer surplus, non-normal goods, and networking externalities. - Income and substitution effects. - Inferior and giffen goods. Article for discussion - A Crippling Indifference -- Without enough pulses, the Indian poor have little protein The Telegraph , February 18, 2008 available at http://www.telegraphindia.com/1080218/jsp/opinion/story_89 11353.jsp 6 The theory of the Firm - The production decision of a firm, production function. - Production with one and two variable inputs returns to scale. Practical work : online game (to be announced on class date) 7 Cost of Production - Economic and Accounting Cost - Opportunity cost and sunk cost Chapter 6 Chapter 5 Chapter 4 Chapter 3 Chapter 2 Pindyck Chapter 2

- Cost in the short and long run, cost minimization Article for discussion (abstract will be emailed) - John Gourville and Dilip Soman , Pricing and the Psychology of Consumption , Harvard Business Review, Sep2002, Vol. 80 Issue 9, p90. Online exercise: http://www.mckinseyquarterly.com/Enduring_ideas_The_ind ustry_cost_curve_2343 8 9 The perfectly competitive market. The efficiency of competitive markets - Government Interventions and its consequences - Article for discussion : A Government Failure, Not a Market Failure :The housing bubble was a fully rational response to a set of distortions in the free market distortions created primarily by the public sector, Wall Street Journal. http://online.wsj.com/article/SB124631486277570583.html 10 Monopoly - Price and output decision - Monopoly power - Social Costs of monopoly - Regulating monopolies Chapter 9 Chapter 7 Chapter 8

11

Price discrimination - Types of price discrimination - Article for discussion :Tesco and price discrimination - http://business.timesonline.co.uk/tol/business/industry_sect ors/retailing/article7070471.ece

Chapter 10

12 13

Monopolistic competition Game theory - Dominant strategies and Nash Equilibrium. - An application to tort law Article for reference: Randal C. Picker An Introduction to Game Theory and the Law available at http://www.law.uchicago.edu/files/files/22.Picker.IntroGame. pdf

Chapter 11

14

Game theory and oligopolistic competition.

Chapter 12

15

Factor markets study of the market for labour under perfect and imperfect market conditions. Analysing government intervention in the labour markets. - Article for discussion: - The minimum wage - A blunt instrument. A higher minimum wage may not kill many jobs, but won't help many poor people. Economist, Oct 26th 2006

Pg.355 - 362 Chapter 14 Pg 501-531

http://www.economist.com/node/8090466 16
General Equilibrium economic efficiency efficiency in exchange efficiency in production Chapter 16 Pg 563- 585

Reference Text 1. Pindyck and Rubinfeld (2001) Micro Economics (6th ed.), N.Delhi, Prentice Hall Other useful links for project work: www.nber.org www.economist.com http://indiabudget.nic.in/ http://www.law.uchicago.edu/lawecon/workingpapers http://encyclo.findlaw.com/ http://www.rbi.org.in/home.aspx

(T.S. SOMASHEKAR)