Post Graduate Programme in Management 2013-14 TERM: I

TITLE OF THE COURSE: MICROECONOMICS FOR MANAGERS

CREDITS: 4

Name of the Faculty member Siddhartha K. Rastogi; Faculty Block -B Room No. 1

Subhasankar Chattopadhyay;

Debdatta Pal

Email: srastogi@iimidr.ac.in; subhasankarc@iimidr.ac.in; Telephone Number +91 731 2439 534; +91 731 2439 549;
COURSE DESCRIPTION

debdatta@iimidr.ac.in +91 731 2439 530

This course serves as the first course in Microeconomics. The focus of the course is on understanding of economic concepts and tools to facilitate decision-making in business management as well as public policy contexts.

COURSE OBJECTIVES
The course aims to equip participants with intermediate level economic concepts and tools of analysis to develop critical thinking and analytical skills to apply under different business situations. Concepts of this course can further be applied in Industrial Regulation, Strategic Competition, International Business, Marketing, Managerial Accounting, Public Policy, etc.

PEDAGOGY/TEACHING METHOD:
All sessions are lecture based. Applications and case studies are used for illustrative purposes to reinforce the understanding of concepts and tools. The basic reference book used is: Pindyck, R.S., Rubinfeld, D.L. and Mehta, P.L. (2009) Microeconomics, 7th Edition, Prentice Hall of India Pvt. Ltd., New Delhi; hereafter P-R. Make-up Exam policy There is no makeup provision for the quizzes; whereas makeup for mid-term and end-term exams will be given only if the participant was on medical leave with approval from PGP Chair. The nature of such make up will be on the discretion of the instructors.

EVALUATION
Class Participation Surprise Quizzes Mid-Term Exam End-Term Exam

Weightage
10 20 35 35

Total

100%

SCHEDULE OF SESSIONS Module I Basic Economic Concepts Module Objective

To introduce the participants to the economic way of thinking

Sessions and Objective 1. Basic Economic Concepts: How economists think to make sense of the world. P-R, Chap-1

Module

II Consumer Behavior

Module Objective
To understand the behavior patterns of consumers under different conditions

Sessions and Objective 2. Consumer Behaviour: How consumers employ scarce resources to fulfill unlimited wants. P-R, Chap-3, pp 61-84 Case: Designing New Automobiles (I) and (II), pp 71 and 83
3 - 4 - 5 Demand and Supply Analysis: What and how affects demand and supply of various classes of goods; how an equilibrium is reached under different conditions. P-R, Chap-2 and Chap 4, pp 117-126 Case: Declining Demand and the Behaviour of Copper Prices, pp 46 Case: Aggregate Demand for Indian Tea, pp 119 6. The Impact of Taxes and Subsidies: How government's policy decisions enter the map of consumer behavior and affect the consumption decisions. P-R, Chap-8

Module

III Production Decisions

Module Objective
To understand the pattern of production decisions and product pricing decisions by producers under different conditions.

Sessions and Objective

7. Theory of Production: Basic concepts related to production choices P-R, Chap-5 Case: Returns to Scale in the Carpet Industry, pp 167 8. Theory of Cost: Identifying relevant costs and implications P-R, Chap-6, pp 171-184 Case: Short Run Cost of Aluminium Smelting, pp182 9 - 10. Pricing with Market Power: How to price the product when cost is not the only parameter. P-R, Chap 10, pp. 333-354 Case: The Economics of Coupons and Rebates, pp 342 Case: Airline Fares, pp 344

Module

IV Market Structures

Module Objective
To study the different possible market structures and their implications for economic decision making.

Sessions and Objective

11. Competitive Supply: How do the markets behave under perfectly competitive environment. P-R, Chap 7, pp 221-234 12. Monopoly and Market Power: How do the markets behave when monopoly power exists there. P-R, Chap 9, pp. 293-317

13 - 14. Competitive Strategy: How market structures make the decision-making a strategic and competitive process. P-R, Chap-12, Section 12.1 to 12.3 15 - 16. Monopolistic Competition and Oligopoly: The more prevalent market structures and the process of decision-making in such markets. P-R, Chap-11 Case: Monopolistic Competition in the Markets for Colas and Coffee, pp 375 Case: A Pricing Problem for Proctor & Gamble, pp 388

Module

V Market Failures

Module Objective
The neoclassical economics recognizes that markets can fail under certain situations. This module aims to understand such situations, reasons, and remedies.

Sessions and Objective

17. Externalities: Situations where markets fail due to externalities P-R, Chap 16, pp 529-542 & Case: Emission Trading and Clean air, pp 540 18. Public Goods: The problems in provision of public goods P-R, Chap 16, pp 557-561 19. Economics of Information P-R, Chap 17, Section 17.1 to 17.3 and 17.6

20. Course windup and an introduction to Micro-foundations of Macroeconomics

Additional Reading

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