UNIVERSITY OF ZIMBABWE

FACULTY OF BUSINESS MANAGEMENT SCIENCES AND ECONOMICS

DEPARTMENT OF ECONOMICS AND DEVELOPMENT
PRINCIPLES OF MICROECONOMICS (ECD101) MODULE OUTLINE

DURATION: ONE SEMESTER

LEVEL 1 (Semester 1) Academic Year 2023

MODULE ADMINISTRATION
Lecturers:
Mr. B. M. W. Zwizwai (Office 14 Economics and Development Department)
Email: [email protected]
Dr S. Mukoka (Room 17 Economics and Development Department)
Email: [email protected]
Dr. E. Mavodyo (Room 17 Economics and Development Department)
Email: [email protected]

Contact Hours: 48 Hours

• 36 Lecture Hours
• 12 Tutorial Hours

PURPOSE OF THE MODULE

This module lays a solid foundation for advanced as well as applied microeconomics
modules that will develop models for economic agents to stimulate industrialisation and
economic transformation. This is the bedrock for equipping learners with the critical basic
tools needed in advanced courses, with the particular goal of developing models that
promote innovation and industrialisation in Zimbabwe. Learners will be introduced to
decision making y microeconomic actors; households and firms within various market
structures.

MODULE AIMS
• To develop a critical understanding of microeconomic principles.
• To use models to analyse the behaviour of individuals and firms.
• To understand firm behaviour in order to conceptualise achievement of economic
transformation through industrialisation.
• Understand how to apply microeconomic principles to a range of policy questions.

LEARNING OUTCOMES
• Application of the underlying concepts and principles of microeconomics in higher
level modules.
• Learners will be able to demonstrate an ability to conceptualise microeconomic
problems analytically.
• Application of the basic theory of how consumers and firms respond to a range of
problems.

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 • Learners will develop critical thinking for understanding simple models of
competitive behaviour and industrial organisation for application in higher level
modules that seek to innovatively transform the economy.

PREREQUISITES
• The prerequisites for this module are 5 O’ Levels (including Maths and English)
and 3 A’ levels. Many students feel disadvantaged if they have not studied
Economics previously at the secondary level. This feeling is entirely unnecessary
as the unit is commenced on the basis of no previous knowledge. The only
required prerequisites are a willingness to learn and, in particular, the ability and
motivation to read all material prescribed.

MODULE CONTENT
1.1 Introduction to Microeconomics (Day 1)
1.1.1 What is Economics?
1.1.2 Economic issues and concepts
1.1.3 The Economic Problem: - Scarcity and Unlimited Wants
1.1.4 Economic Way of Thinking
1.1.5 Basic economic questions and economic systems
1.1.6 How do Economists work? - Models: - Production Possibility Frontier
[Samuelson and Nordhaus chapter 1]
1.2 Partial Equilibrium Analysis of Markets (Days 2 and 3)
1.2.1 Elementary demand analysis: theory of demand, demand curves, the
determinants of demand;
1.2.2 Elementary supply analysis: theory of supply, supply curves, the
determinants of supply;
1.2.3 Market price determination and Changes in market prices,
1.2.4 Applications: Government Actions in the Market: - price controls,
minimum price legislation, indirect taxes.
[Samuelson and Nordhaus chapters 3 and 4]
1.3 Elasticity and its application (Day 4)
1.3.1 Demand elasticity: Own Cross Price Elasticity; Income Elasticity
1.3.2 Supply Elasticity: Own Cross Price Elasticity; Income Elasticity
1.3.3 Taxonomy of Goods
1.3.4 Elasticity applications: incidence of tax
[Samuelson and Nordhaus chapters 3 and 4]

1.4 Introduction to consumer behaviour (Days 5 & 6)

1.4.1 Marginal utility theory: concepts, consumer equilibrium.
1.4.2 Indifference curve analysis: budget line, indifference curves, derivation of
demand curve
1.4.3 Consumer surplus and the paradox of value
[Samuelson and Nordhaus chapter 5]

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 *****TEST ONE covers materials from section 1.1 to 1.4*****

1.5 Consumers, producers and efficiency of markets (Days 7 & 8)

1.5.1 Markets and welfare: consumer and producer surplus; economic efficiency
1.5.2 Application the cost of taxation: deadweight loss
1.5.3 Government and Market Failure
1.5.4 Externalities: positive and negative; policies to control market failures
1.5.5 Types of goods: private goods, monopoly goods, public goods and common
resources

1.6 Theory of the firm (Days 9 & 10)

1.3.1 Theory of production: Basic concepts: Production function; Total, Average
and Marginal product, law of diminishing returns; returns to scale;
short run and long run.

1.3.2 Costs of production: Costs in the short and long run including marginal,
average, fixed, and total costs
[Samuelson and Nordhaus chapter 6 and 7]

1.7 Market Structures 1 (Days 11 & 12)

1.7.1 Firms in competitive market
1.7.2 Monopoly
[Samuelson and Nordhaus chapters 8, 9 and 10]

1.8 Market Structures 2 (Day 13)

1.8.1 Monopolistic competition,
1.8.2 Introduction to oligopoly and game theory
[Samuelson and Nordhaus chapters 8, 9 and 10]

*****TEST TWO covers materials from section 1.5 to 1.8 *****

3. TEACHING
Learning is going to be predominantly online-based on the e-LMS online portal.
Face-to-face encounters will also be possible at set times by the University.
Students are expected to do the bulk of the learning through research and group
assignments. Tutorial sessions will be conducted at prescribed times and
attendance is compulsory.

Tutorials will focus on work covered in the preceding week’s lecture. For
example, the material covered in the lecture for Week 1, will be discussed in
the tutorial in Week 2. Tutorials will look at questions which are frequently
posted on the e-LMS online portal for each week as well as individual problems
raised by students.

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 4. MODULE ASSESSMENT
Each module has its own language, so students must write their assignments
and tests like an economist to succeed. Assessment of the module will be based
on a 2-hour final examination (50%) and a coursework mark (50%). The
coursework mark will be derived from 2 tests during the module.

N.B. if a student misses a test for no valid reason, the mark allocated is zero.

Grades in the module are as follows:

Grade Description Range

1 First class 75 – 100%
2.1 Upper-Second class 65 – 74%.
2.2 Lower-Second class 60 – 64%
3 Pass 50 – 59%
F Fail 0 – 49%

5. Module Resources

Prescribed texts
Baumol, W.J. and. Blinder A. S (2007) Economics: Principles and Policy, Harcourt: San
Diego.
Lipsey R.G and Chrystal A. K., (2015), Economics, 13th Edition, Oxford University Press,
New York
Karl Case and Ray Fair (2016), Principles of Economics,12th Edition Pearson:
Mankiw G.N. and Taylor M. P. (2017), Economics, 4th Edition, Thomson Learning,
London, UK.
McConnell C.R. and. Brue S.L. (2015) Economics, Principles, Problems and Policies, 20th
Edition, McGraw-Hill: New York.
Samuelson P. A. and Nordhaus W.D. (2009) Economics, 19th Edition McGraw-Hill: New
Delhi.
Sloman J., Wride, A. and Garratt, D. (2012) Economics, Prentice Hall: London.

E-resources
a. E-LMS: https://lms.uz.ac.zw/login/index.php
b. E-books: http://www.uz.ac.zw/index.php/library.html
c. www.myeconlab.com

In addition to these textbooks, it is important that you read the business sections of the local
newspapers and other local financial journals so that you keep up with developments in the
Zimbabwean economy. All standard textbooks in microeconomics cover the same
principles and ideas.