FACULTY OF MANAGEMENT SCIENCES

BAHRIA UNIVERSITY
GENERAL INFORMATION
Course Title MICROECONOMICS (ECO 110)

Course ID Sections: 1A & 1B Semester: FIRST Year: 2022 (Fall)

Course Schedule
Wednesday 0830-1130 (1A) Thursday 0830-1130 (1B),

INSTRUCTOR’s INFORMATION
Name SYED GHAYYUR ALAM Emai [email protected]
Office Address Bahria University Karachi Campus 13 National Stadium Road Karachi 75260

Consultation Timing Wednesdays & Thursdays: 1030 am to 1130 am

UNIVERSITY POLICY OF FAIRNESS

Bahria University follows strict policy of fairness in examinations, assignments, other academic activities and conduct. The
University appreciates decent behavior, acceptable moral norms and respectful display of attitude towards others in the campus.
Details of expected behavior and conduct are covered in students’ handbook which is available on university website. It also
covers in detail plagiarism and its consequent disadvantages to the students as per HEC policies / rules.

COURSE DESCRIPTION
This core course is an introductory course on the functions of economy to help students understand the integral role economic
units including individuals, firms, government and markets plays in the economy. Emphasis is placed on the application of a
critical-thinking process to the elements in the business environment, forms of business ownership, market structures,
competition in the domestic market, management of scarce resources that can maximize consumer satisfaction.

COURSE OBJECTIVE
The objectives of the course are to:

 Expose the students to the concepts and practices of Microeconomics

 Help the students understand the relationship of supply side forces and demand side forces.
 Impart knowledge and skills to students for identifying, analyzing, and solving economic problems.
 Develop attitude of students to be part of economic activity at the work environment.

LEARNING OUTCOMES
After having completed this course successfully, the students will be able to:
1. Differentiate between the scope of Microeconomics and Macroeconomics
2. Describe the functions and applications of Microeconomics
3. Analyze the financial and strategic issues in a given business setup
4. Develop the skills required to perform business activities
5. Construct and Interpret the graphs to analyze the business and economic activity.

1
CLASS WISE COURSE DISTRIBUTION

Class Topics Activities

1. WHAT IS ECONOMICS ?  Open House: Participation in defining and giving examples of
Introduction concepts discussed in the class.
i. Definitions , Overview of the definitions  Discussion/Lecture
of economics put forward by Adam  Post Class Assignment: Students will read the journal article
Smith, Alfred Marshall and Lionel
on “Opportunity cost of studying abroad” in groups in the next
Robbins and questions
ii. Economics: A social science class.
iii. Unscrambling cause and effect
iv. Ceteris paribus Journal article reference:
v. The economic way of thinking George Heitmann. (2008). The Opportunity Cost of Study
vi. Why economics is worth studying? Abroad Programs: An Economics-Based Analysis, The
Interdisciplinary Journal of Study Abroad, pp 57-66.

2. WHAT IS ECONOMICS?(CONTINUED) Discussion / Question Answer on pre class assignment

i. Interpreting graphs used in economic Discussion /presentation on the assignment of journal article
models given in the last class on “Opportunity cost of studying
ii. Measurement of slope
abroad” in groups.
iii. Relationships among more than two
variables.
iv. Opportunity cost.
3. WHAT IS ECONOMICS?(CONTINUED  Discussion on Pre-class assignment
i. What goods and services are produced?  Presentation and discussion
ii. How are goods and services produced?  Post Class Assignment: solve the Chapter practice questions:
iii. For whom are goods and services Q # 1, 7,9,10 (pp: 112, Robin Bade & Michael Parkin. (2013)
produced? Microeconomics. 11th Edition. New York: Pearson Addison
iv. Fallacies and obstacles in economics Wesley)

4. ECONOMIC PROBLEM Presentation and discussion on pre class assignment

The Economic Problem: Solve question # 1.7, question # 1.8 page 13, Edgar. K Browning
i. Production possibilities frontier (PPF) (2011), “Microeconomics” 11th Edition. Wiley.
ii. Opportunity cost Post class assignment: Read the journal article at home
iii. Economic growth (Aleksandrs Fedotovs (2010). “A small nation’s comparative
iv. Using resources efficiently advantage: The case of Latvia”, Business and Economic Horizon,
Vol. 1, Issue 1,pp. 51-57)

5. Specialization and trade:  Presentation and discussion on pre class assignment

i. Absolute advantage  Lecture
ii. Comparative advantage
iii. Gains from trade Quiz #1
iv. Trade Barriers Post class assignment: Solve question # 2.5, 2.7. 2.8 Individually
v. Welfare effects of trade barriers
in class from Edgar. K Browning (2011), “Microeconomics” 11th
Edition. Wiley, page no. 45.

6. DEMAND AND SUPPLY  Presentation and discussion on pre class assignment

Demand:  Lecture
The law of demand  Post class assignment: Analyze the case, Case study# 3.1
Demand schedule and demand curve “Immigration,” and solve the given questions and will present
Individual demand and market demand
Changes in demand
2
in next class.

7. Supply:  Discussion on pre class assignment

The law of supply  Lecture
Supply schedule and supply curve  Post class assignment: Economics, 9th edition, Chapter#3
Individual supply and market supply Demand and Supply, pp 60-61 demand and supply
Changes in supply

8. Market Equilibrium:  Discussion on pre class assignment

 Lecture
i. Price: a market’s automatic regulator  Post class assignment: Students will solve question# 2, 5, 6, 7
ii. Effects of changes in demand individually in class from chapter # 3 , page 81, Robin Bade
iii. Effects of changes in supply & Michael Parkin. (2013) Microeconomics. 11th Edition. New
iv. Changes in both demand and supply York: Pearson Addison Wesley.

9. ELASTICITY  Lecture/discussion
Price elasticity of demand:  Students have to identify 10 examples from daily life and
i. Elastic and inelastic demand explain that how they relate to different types of elasticities.
ii. Influences on the price elasticity of  Post class assignment: Read Case # 2.7, DC learns about
demand
demand elasticity, Washington post, November 2, 1980,
iii. Computing the price elasticity of
demand p.A1.
iv. Elasticity along a linear demand
curve
10. -Cross elasticity of demand  Presentation and discussion on Pre class assignment
 Lecture/Exercise
-Income elasticity of demand
 Post class assignment: solve question# 2, 4, 7 individually in
-Total revenue and price elasticity of class from chapter # 4, pp 101, Robin Bade & Michael
demand Parkin. (2013) Microeconomics. 11th Edition Pearson
Addison Wesley.

11. Price elasticity of supply:  Discussion on pre class assignment

 Lecture/ discussion
i. Elastic and inelastic supply
ii. Influences on the price elasticity of
supply

12. EFFICIENCY AND FAIRNESS OF  Discussion on learning outcomes and pre class assignment of
MARKETS: Value, and consumer surplus: the last sessions.
Demand, marginal benefit, consumer surplus  Lecture
Cost, price, and producer surplus:  Post class assignment: Reading of next class topics
Supply and marginal cost Producer surplus
Quiz #2

13. Are markets efficient?  Discussion on pre class assignment

i. Efficiency of competitive equilibrium  Lecture/discussion
ii. The invisible hand  Post class assignment: Read the journal article, D. Bertsimas.
iii. Obstacles to efficiency (2012). On the Efficiency-Fairness Trade-off, management
Under production and overproduction science journal, Vol. 58, No. 12, pp. 2234–2250

14. Are markets fair?  Presentation on pre class assignment:

3
i. The big tradeoff  Lecture/discussion
Making the poor as well off as possible

15. EXTERNALITIES Discussion and examples sharing on the concepts

Externalities: Lecture
Externalities in our daily lives:
i. Negative and positive production Post class assignment: Read the journal article Walter Block.
externalities (1983).Public Goods and Externalities: The Case of Roads,
ii. Negative and positive consumption Fraser Institute, Vancouver, Journal of libertarian studies Vol.
externalities 6, pp1-30.

16. Negative externalities: Pollution:  Presentation on pre class assignment

Positive externalities: Knowledge:  Lecture/discussion
Remedies to reduce negative externalities.
 Post class assignment: solve question# 2, 5, 6, 7 from chapter
Corrective tax, Pollution tax
#7, Robin Bade & Michael Parkin. (2013) Microeconomics.
11th Edition. New York: Pearson Addison Wesley.

17. UTILITY AND DEMAND  Submission of pre class assignment

Consumption possibilities:  Lecture/discussion
i. The budget line
ii. Changes in prices
iii. Prices and the slope of the budget
line

18. Marginal utility theory: Post class assignment: Read the journal article, Greene Baron
i. Total and marginal utility (2001).Intuitions about declining marginal utility, Journal of
ii. Finding the demand curve behavioral decision making, Vol. 14, pp 243-255.
iii. Marginal utility and elasticity of demand
iv. Indifference Curves
19. i. Equi-marginal rule Presentation on pre class assignment
ii. Maximizing utility Discussion/lecture
iii. Paradox of value Quiz #3

20. PRODUCTION AND COSTS Students will solve question# 1, 2, 5, 7 individually in class from
Nature of Firms chapter #10, Robin Bade & Michael Parkin. (2013)
Economic cost and profit: Microeconomics. 11th Edition. New York: Pearson Addison
i. The firm’s goal Wesley.
ii. Opportunity cost Post class assignment: read the journal article, Str. Skarlis et al.
iii. Explicit costs and implicit costs (2012).Small-scale biodiesel production economics: a case study
iv. Economic profit focus on Crete Island, Elsevier, Journal of Cleaner Production
Short run and long run: Vol.20, pp 20-26.
i. Short-run production
Total, marginal and average product
21. Short-run cost:  Discussion/presentation on Pre-class assignment
 Presentation and discussion
 Total, marginal and average costs.  Post class assignment: In small groups students have to choose
Long-run cost: a microeconomic terminology from the course outline and
 Plant size and cost prepare a research report on predefined contents, to be
Economies and diseconomies of scale submitted in session # 29.

22. PERFECT COMPETITION Students will solve question# 2, 3, 4 individually in class from
chapter #11, Robin Bade & Michael Parkin. (2013)
4
Perfect Competition: Microeconomics. 11th Edition. New York: Pearson Addison
1. A firm’s profit-maximizing choices: Wesley.
i. Price taker Post class assignment: analyze the case, Case study# 6.1 “New
ii. Revenue concepts ideas in Supermarkets” Economics, 9th edition, Chapter#6
Profit maximizing output Market Structures, pp 128-129..
Severin Borenstein. (1992). “The Evolution of US Airline
iii. Marginal analysis and supply decision competition”, Journal of economic perspectives,6, No.2, pp.45-
iv. Exit and temporary shutdown decisions 73
v. The firm’s short-run supply curve
23. Output, price, and profit in the short-run:  Presentation/Discussion on Pre-class assignment
i. Market supply in the short-run  Presentation and discussion
 Short-run equilibriums  Post Class Assignment solve question# 1, 2, 3, 4 page
Output, price, and profit in the long-run: no.189-190 individually in class from O’Sullivan.
i. Entry and exit (2001)Economics: Principals and tools. International Edition.
ii. A permanent change in demand New York: Pearson Addison Wesley.
External economies

24. MONOPOLY  Submission of Pre-class assignment

Monopoly and how it arises:  Lecture
i. Monopoly price-setting strategies  Students will solve question# 2, 3, 5 individually in class
ii. Single price from chapter #12, Robin Bade & Michael Parkin. (2013)
 Price discrimination Microeconomics. 11th Edition. New York: Pearson Addison
Wesley.

25. Single-price monopoly:  Discussion/ lecture

i. Price & marginal revenue  Post class assignment: Read and prepare the cases , Dr.
ii. Output and price decision Ganesh Narasimnh .Case Study on monopoly, Monopoly on
Monopoly & competition compared:
Indian Railways: IIM Case study.
i. Output and price
http://managementfunda.com/monopoly-of-indian-railways-
ii. Is monopoly efficient
Is monopoly fair? iim-case-study/

26. Price discrimination:  Presentation on pre class assignment

 Lecture
i. Price discrimination and consumer surplus  Post class assignment: Read and solve the given questions of
ii. Profit by price discriminating the case on “Fleet Car Market” Economics, 9th edition,
iii. Perfect price discrimination Chapter#5 Market Structures, Case study # 5.1 Fleet car
Monopoly policy issues: market, pp 103.
i. Gains from monopoly
Regulating natural monopoly

27. MONOPOLISTIC COMPETITION

Monopolistic Competition:  Discussion and presentation on pre class assignment

1. What is monopolistic competition:  Lecture
2. Output and price decisions:  Post class assignment: Solve question# 2, 3,4, 5 individually
The firm’s profit-maximizing decision in class from chapter #13, Robin Bade & Michael Parkin.
(2013) Microeconomics. 11th Edition. New York: Pearson
Monopolistic competition and perfect
Addison Wesley.
competition
Product development and marketing:
Innovation & product development
5
28. OLIGOPOLY : Quiz #4

1. What is oligopoly?  Lecture

2.Charachteristics of oligopoly  Post class assignment: Read and prepare the Journal article
3.The range of oligopoly outcomes:  Journal article reference:
i. Cartel  Kjell Berger et al. (1988).The oil market as an Oligopoly,
ii. The kinked demand curve Discussion Paper, no.32, Central Bureau of Statistics,
Norway

29. Game theory  Presentation on pre class assignment

 Lecture
 Nash Equilibrium, payoff matrix  Post class assignment: Submission of research report
 Prisoner Dilemma
30. Revision Revision of the entire course, Discussion on the research report
submitted.

LEARNING STRATEGIES
Heuristic method of teaching including mix of Pedagogy & Andragogy will be followed by making rich use of diagrams,
graphs, audio visual aids, case studies, review exercises, group activities, article reviews etc. Students are expected to
participate positively in all such activities. All such activities will be considered as marked assignments.

COURSE MATERIAL
Text Book: Robin Bade & Michael Parkin. (2013) Microeconomics. 11th Edition. New York: Pearson Addison Wesley.
ISBN: 0133423905 / 9780133423907
Reference Book: 1. Joseph E. Stiglitz & Carl E. Walsh. (2006) Economics, 4th Edition. New York: W.W. Norton & Co.
ISBN-10: 0393168174/ISBN-13: 978-0393168174.
2. Edgar. K Browning. (2011) Microeconomics, 11th Edition. Wiley.
3. Samuelson Paul and William. (2001) Economics, 17th Edition. New York: McGraw Hill Irwin.

GRADING PLAN

Marks Head Total Frequency Total Exempted Marks /Frequency Total Marks

Assignment 4 0 5 20

Quiz 4 1 (N-1) 5 15

Mid Term Paper 1 0 25 25

Final Paper 1 0 40 40

Report & Presentation - - - -

 Total Marks 100