Bachelor in Business Administration (BBA) Program

Course Name: Micro Economics

Course Code: BBA 113
Course Credit: 3

Batch 1 & 2: Dr. Veena Mehta

Batch 3 &4: Manisha Singh

Galgotias University
School of Business

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Course Background and Learning Objectives:

Microeconomic is a course, through which students will learn to apply an analytical

approach to the study of how individuals and societies deal with the fundamental problem
of scarce resources. This approach is applied to everyday decisions faced by individuals
as they try to maximize their utility, to businesses that try to maximize profits and to the
whole of society as it attempts to use its resources efficiently. Topics covered in class will
include: supply and demand; consumer theory; the theory of the firm under perfect
competition, monopoly and other market structures and factor markets. The economic
principles learnt in microeconomics can be applied in many real life situations, whether
the future finds you reading the newspaper, running a business, or sitting in the work
place. The purpose of this course is to give students a thorough understanding of the
principles of economics that applies to the functions of individual decision makers, both
consumers and producers, within the economic system. The successful completion of this
course should allow students to take better managerial decisions.

The learning goals and objectives of this course for students to pursue management
education are:

1. To acquaint students with basic concepts and techniques of microeconomic

analysis and their applications to managerial decision-making to sustain the
business in long-run.[ NBA GA-1 Business Knowledge)

2. To sensitize students to the society of which they are an integral part and to guide
them in using their creativity and make themselves socially responsible while
appreciating the importance of the society as a stakeholder in their decision-
making [NBA GA-8 Business Ethics]

3. To explain the interrelationships between the physical, social and economic

environments and the need to conserve and use our resources without
compromising the needs of the future generations [NBA GA 7-Environment and
Sustainability]

4. To acquaint students with the latest models in theory building thus enabling them
to apply them to complex managerial problems with confidence [NBA GA 4
Conduct investigations of complex problems]

5. To encourage the students to think out of the box and break the mould in order to
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 enable them to analyse problems effectively and innovatively [NBA GA 2
Problem Analysis]

6. To enable the students in taking up leadership positions and try new avenues as
entrepreneurs and also enhance their project management capabilities as
entrepreneurs.[NBA GA 11 Entrepreneurship and project management]

Pedagogy:
The pedagogy will be a combination of class lectures (theory and solving problems),
experience sharing, real life examples, caselet discussion and projects/assignments on
specific companies. Each economic theory will be explained graphically and
mathematically so that students from any background are able to comprehend the
concepts easily. In addition to the text and reference books, additional readings and cases
will be distributed in the class from time to time. Students are also expected to read and
identify the problems in understanding the concepts and their application in the real
world situation before the start of each session. This will help to develop creativity and
innovative thinking in students to manage multi-stakeholder relationships.

Course Strategy and Requirements:

Every field of study has its own language and its own way of thinking. Mathematicians
talk about axioms, integrals, and vector spaces. Psychologists talk about ego, and
cognitive dissonance. Economics is no different. Supply, demand, elasticity, consumer
surplus, deadweight loss – these terms are part of the economist’s language. In this
course, you will encounter many new terms and some familiar words that economists use
in specialised ways. At first, this new language may seem needlessly arcane. But, as you
will see, its value lies in its ability to provide you a new and useful way of thinking about
the world in which you live. Of course, just as you cannot become a mathematician or
psychologist overnight, to get the conceptual clarity and to think the application of
economic concepts for business managers you should follow the following strategies.

(i) Read and identify the problems in understanding the concepts before the
start of each session. If you are unable to get the conceptual clarity after
the end of the session, immediately ask questions in the class (if time
permits), or after the class (preferably same day).

(ii) Try to solve problems on your own, which have already solved in the

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 class. In case of difficulty, ask friends, or teacher.

(iii) Read the caselet and try to find out the learning points pertaining to the
specific topic in “Micro economics”.

(iv) Any difficulty in understanding economic concepts while studying

business newspapers and listening to business news channels, clarify your
doubts by asking friends, or the teacher.

(v) While studying courses like Business Strategy, Financial Management,

Marketing, etc. try to relate the use and usefulness of various economic
concepts, which you have learned from this course.

(vi) Thus, class participation is very much useful for better understanding of
the concept. This will be appreciated and rewarded if you add value to the
class through your questions, statements, and comments. It is the quality
of these that is more important than the quantity.

(vii) Moreover, there will be assignments/projects assigned to all of you either

individually or in group. Late submission of assignments/projects will not
be accepted.

Assessment of Learning Goals and Objectives:

Components of evaluation are very crucial pertaining to assessing the learning goals and
objectives of the course. Keeping in mind students’ heterogeneous background, and
strategies specified above, the following components of evaluation have been designed to
assess the learning goals and objectives. Quizzes will evaluate the conceptual clarity of
each student most frequently. Case studies discussion, project report presentation and semester end
examination will assess the learning goals 1, 2 and 3 as mentioned above.

Learning Goals and Objectives*

Assessment Components and Marks 1 2 3
Quiz/ Case Studies/ Project Report
√ √ √
Presentation (20 Marks)
CAT-1(15 Marks) & CAT-2 (15 Marks) √ √ √
End Term Examination (50 Marks) √ √ √
* For details of 1, 2, 3 learning goals and objectives, see above of this course outline.

Evaluation Scheme

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EC Evaluatio Learning Objective NBA- GA Questions Marks Date Nature
No. n Addressed Mapped (50) Time of
Compone Compo
nt nent
1. CAT-1 1.To acquaint students with basic 1- Business Ques- 1, 22 3-7 Closed
concepts and techniques of Knowledge 2, 3 Octob Book
microeconomic analysis and their er,
applications to managerial 2016
decision-making to sustain the
business in long-run
2. To sensitize students to the 8-Business
society of which they are an ethics
integral part and to guide them in
using their creativity and make
themselves socially responsible
while appreciating the importance
of the society as a stakeholder in
their decision-making
3. To explain the interrelationships 7-
between the physical, social and Environment
economic environments and the and
need to conserve and use our Sustainability
resources without compromising
the needs of the future generations
4.To acquaint students with the
latest models in theory building 8- Conduct Ques-4 8
thus enabling them to apply them investigations
to complex managerial problems of complex
with confidence problems

5. To encourage the students to

think out of the box and break the
mould in order to enable them to 2-Problem Ques-5,6 20
analyse problems effectively and Analysis
innovatively

6. To enable the students in taking

up leadership positions and try 11-
new avenues as entrepreneurs and Entrepreneurs
also enhance their project hip and
management capabilities as project
entrepreneurs management

2. Quiz-1 1. 2- Business Complete 10 Septe Closed

Knowledge Quiz mber Book
19
3. Quiz-2 6 8-Business Complete 10 Octob Closed
ethics Quiz er 19 Book

4. Quiz-3 4 8 Conduct Case 10 Nove Closed

investigations Study/Qui mber Book
of complex z 18th
problems

5. Assignme 7 Assignme 10 Any Open

nt(s) nt 1 time Book
in
Sem

5
 5 2- Problem Assignme 10 Any Open
Analysis nt 2 time Book
in
Sem

Quiz/ Case Studies/ Project Report Presentation

This is an individual assessment component of evaluation consisting of conceptual,
theoretical and numerical multiple choice questions. There will be at least 3 quizzes and
best 2 will be taken into consideration for final grade of students. Similarly, case studies
discussion and project report presentation might also be considered as the components of
evaluation to assess students’ performance in a group. Through case studies and project
report presentation students are expected to apply economic concepts and business
models in a decision-making setting to achieve the objectives of the firm, i.e. profit
maximization. Through these components students will also develop their creative and
innovative thinking by taking critical investment decisions into consideration.

Continuous Assessment Test 1 & 2 (CAT-1 & CAT-2)

This component of evaluation is to assess the performance of students after the
completion of 15 lectures and 30 lectures respectively. This is to monitor students’
performance continuously and make them aware about their mistakes and wrong
understanding of the concepts.

End Term Examination (ETE)

End Term Examination is to assess students individually by keeping the overall learning
goals and objectives in mind. The questions are mostly analytical and situational.

RECOMMENDED TEXT BOOK AUTHOR & PUBLICATION

Microeconomics: Theory and D. N. Dwivedi, (2012), 2e, Pearson Education.
Applications,
SUPPLEMENTARY READINGS
Principles of Microeconomics William A. McEachern & Simrit Kaur (2012) 2/e,
Cengage Learning
Microeconomics in context, Neva Goodwin, Nelson 2nd edition.(2009), PHI
Learning
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Principles of Microeconomics N. Gregory Mankiw, 4e, Thomson: South-Western.
Modern Microeconomics Koutsoyiannis, ELBS.
Managerial Economics Geetika, Piyali Ghosh, 2e McGraw-Hill
Managerial Economics S. Prusty, PHI.
Economics Paul A. Samuelson & William D. Nordhaus, 17e,
McGraw-Hill.

Course Outline (lecture-wise):

Session Topics to be discussed Readings

Module I: Introduction to Microeconomics
This module is introductory in nature and covers fundamental aspect of microeconomics. The purpose of this
module is to describe the nature of microeconomic and discuss its branches, uses and limitations.
1 Introduction to Microeconomics: Economics is a Social Science Text Book, Chapter 1
2 Two Major Branches of Economics Text Book, Chapter 1
3 Microeconomics As a positive Science Text Book, Chapter 1
4 Microeconomics As a normative Science Text Book, Chapter 1
5 The Uses of Microeconomic Theories Text Book, Chapter 1
6 Limitations of Microeconomic Theories Text Book, Chapter 1
Module II: Supply-Demand Analysis and Consumer Behaviour
The purpose of this module is to acquaint students with basic concepts of the demand function and demand curve,
the supply function and supply curve, demand elasticity and their applications, techniques of demand estimation,
and economic theory of consumer behaviour.
7 The Concept of Market Text Book, Chapter 3
8 The Demand Side of the Market: Meaning, Law of Demand Text Book, Chapter 3
9 The Demand Side of the Market: Factors behind the Law of Demand Text Book, Chapter 3
10 The Supply Side of the Market: Meaning, Law of Supply Text Book, Chapter 3
11 The Supply Side of the Market: Shifts in the Supply Curve Text Book, Chapter 3
12 The Market Equilibrium: Market Mechanism, Graphical Illustration Text Book, Chapter 3
of Price Determination
13 Case study: Power for All: Myth or Reality Geetika & Piyali Ghosh,
Chapter 3
14 Theory of Consumer Demand: Utility Approach Text Book, Chapter 3
15 Cardinal utility approach, The Law of Diminishing Marginal utility, Text Book, Chapter 6
Consumer Equilibrium
16 Ordinal utility approach ,Properties of Indifference curves, consumer Text Book, Chapter 7
Equilibrium
17 Marshallian Concept of Consumer Surplus Text Book, Chapter 10
18 The Elasticity of Demand Text Book, Chapter 3
19 Price Elasticity of Demand: Measuring Arc and Point Elasticity of Text Book, Chapter 3
Demand
20 Determinants of Price Elasticity of Demand Text Book, Chapter 3
21 Price Elasticity of Supply: Definition and Measurement Text Book, Chapter 3
22 Determinants of Price Elasticity of Supply Text Book, Chapter 6
23 Mathematical Illustrations on Price Elasticity of Demand& Supply Text Book, Chapter 7
Module III: Production Analysis, Cost of Production, and Profit Analysis of the Firm
The focus of this module is to analyse the theory of production, clarify the nature of economic costs and discuss the
profit maximizing tools of a business firm, which are the prerequisites of Module III.
24 Meaning of Production, Input and output Text Book, Chapter 11;

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Session Topics to be discussed Readings
Petersen, Lewis, & Jain,
Chapter 6
25 Theory of production in short-run [relationship among total, average Text Book, Chapter11
and marginal productivity of labour, law of diminishing returns]
26 Theory of production in long-run [expansion path, and returns to Text Book, Chapter 11
scale]
27 The Isoquant curve Text Book, Chapter 11
28 Derivation and properties of Isoquant curve Text Book, Chapter 12
29 Isoquant map and economic region of production Text Book, Chapter 6
30 Cobb-Douglas production function and returns to scale Text Book, Chapter 12
31 Types of costs in short-run [fixed, variable, total, average, marginal, Text Book, Chapter 7; Petersen,
break-even analysis, shut-down point] Lewis, & Jain, Chapter 7
32 Types of costs in long-run [total, average, marginal, and inter- Text Book, Chapter 7; Petersen,
relationships] Lewis, & Jain, Chapter 7
33 Mathematical Illustrations Handout
Module IV: Market structure
The focus of this module is to analyze the different types of markets and how the price and output is determined in
each of these markets.
34 Perfectly competitive market [characteristics, supply and demand Text Book, Chapter 16
curve] Case study: Outsourcing to India: Way to Fast Track
35 Perfectly competitive market [profit maximizing price determination Text Book, Chapter 16
in short-run and long-run]
36 Monopoly [characteristics, demand curve] Text Book, Chapter 17
37 Cost and Revenue curves under monopoly, Price Discrimination Text Book, Chapter 17;
under monopoly Mankiw, Chapter 7
38 Monopolistic Competition [characteristics, supply and demand Text Book, Chapter 8; Petersen,
curve, profit maximizing price determination in short-run and long- Lewis, & Jain, Chapter 9
run,
39 Monopolistic competitive market [product differentiation Text Book, Chapter 18
(advertising and brand names), solve problems]
40 Excess Capacity under Monopolistic competition ( solve problems] Text Book, Chapter 18
END TERM EXAMINATION
*
The names of different group members will be announced by the course instructor or by the Class
Representative (CR) of the class.
Students’ Interaction Time
Wednesday: 12:00-2:00 –Batch 3
Monday: 12:00-2:00-Batch 4