Economics 110 (Principles of Microeconomics)

Prof. Yousuf H.J. Garashi

Department of Economics
College of Business Administration
Kuwait University

ECONOMICS 110 (PRINCIPLES OF MICROECONOMICS)

SUMMER TERM 2008/2009
Professor Yousuf Hasan Jawad Garashi

Lecture Times (110/53): Sun. to Thu. 9:20 am – 10:20 am, Room 103

Office Hours: Sun./Wed. Time: 11:00 am – 12:00 noon. Also, by appointment.

Where: Guidance and Orientation Office – College of Business - Shuwaikh
Telephone: Secretary 498-8382 & 498-8392
Email: econyousuf@yahoo.com
Exams Dates and Grade Distribution
Category Weight Date
Midterm Exam (1) 20% Saturday 18 / 07 / 2009 10:00 – 11:00 am
Midterm Exam (2) 20% Saturday 8 / 08 / 2009 10:00 – 11:00 am
Final Exam 50% Monday 17 / 8 / 2009 5:00 – 7:00 pm
Other Activities 10% Weekly Assignments & Quizzes
Total 100% Note: There is no make-up exam

TUTORIAL CLASSES
- Teaching Assistant: Mrs. Asia Aseeri
- Class Time: Mon. & Wed. 1:20 - 2:20 - Room 209
- Attendance is critical for understanding the material.
- Absence in tutorial classes is discouraged.
REQUIRED TEXTBOOK

“Economics,” Campbell R. McConnell & Stanley L. Brue, 17th Edition,

McGraw-Hill Company, 2008.
COURSE OBJECTIVE
"Principles of Microeconomics" is an introductory course in economic theory. It
is designed to introduce undergraduate students to the fundamental concepts of
microeconomic analysis, i.e., the study of the economic behavior of individual
decision-making units such as the consumer and the business firm. By the end of
the course, students are expected to demonstrate an understanding of the tools of
microeconomic analysis. Specifically, this course provides students with general
background and analytical tools pertaining to:
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Prof. Yousuf H.J. Garashi

1. The definition of economics, economic problem, economic systems,

opportunity cost and production possibilities frontier.
2. The characteristics and functioning of the market system. The main
questions answered by the market system and the invisible hand are covered.
3. The concepts of demand and supply schedules and curves, factors
affecting the demand and supply as well as market demand and supply.
4. Market equilibrium and factors affecting it as well as the impact of
government intervention in the market.
5. The concept of elasticity as it relates to both demand and supply and
factors affecting it. The relation between price elasticity of demand and total
revenue.
6. The concept of utility and the law of diminishing marginal utility. The
consumer utility maximization problem.
7. Production technology in the short and the long run. The law of
diminishing returns and economies of scale.
8. Costs of production in the short and the long run and economies of scale.
9. Profit maximization and output determination in perfectly competitive
markets. Shut-down rule, short run and long run supply curve. Competition and
efficiency.
10. Monopolistic markets and profit maximization under monopoly.
11. Profit maximization under monopolistic competition.

Course Content and Readings:

Introduction to Economics and the Economy (Chapter 1)
• The Economic Perspective
• Theories, Principles, and Models
• Macroeconomics and Microeconomics
• Individuals' Economizing Problem
• Society's Economizing Problem
• Production Possibilities Model
• Unemployment, Growth, and the Future

The Market System and the Circular Flow (Chapter 2)

• Economic Systems
• Characteristics of the Market System
• Five Fundamental Questions
• The Invisible Hand
• The Demise of the Command System
• The Circular Flow Model

Demand, Supply, and Market Equilibrium (Chapter 3)

• Markets
• Demand
• Supply
• Market Equilibrium
• Application: Government-Set Prices

Extensions of Demand and Supply Analysis (Chapter 18)

• Price Elasticity of Demand
• Price Elasticity of Supply
• Cross Elasticity and In come Elasticity of Demand
• Consumer and Producer Surplus

Consumer Behavior and Utility Maximization (Chapter 19)

Economics 110 (Principles of Microeconomics) 3
Prof. Yousuf H.J. Garashi

• Law of Diminishing Marginal Utility

• Theory of Consumer Behavior
• Utility Maximization and the Demand Curve
• Applications and Extensions
The Costs of Production (Chapter 20)
• Economic costs
• Short-Run Production Relationships
• Short Run Production Costs
• Long-Run Production Costs
• Applications and Illustrations

Pure Competition (Chapter 21)

• Four Market Models
• Pure Competition: Characteristics and Occurrence
• Demand as Seen by a Purely Competitive Seller
• Profit Maximization in the Short Run: Total-Revenue-Total-Cost Approach
• Profit Maximization in the Short Run: Marginal-Revenue-Marginal-Cost Approach
• Marginal Cost and Short-Run Supply
• Profit Maximization in the Long Run
• Pure Competition and Efficiency

Pure Monopoly (Chapter 22)

• An Introduction to Pure Monopoly
• Barriers to Entry
• Monopoly Demand
• Output and Price Determination
• Economic Effects of Monopoly
• Price Discrimination
• Regulated Monopoly

Monopolistic Competition and Oligopoly (Chapter 23)

• Monopolistic Competition
• Price and Output in Monopolistic Competition
• Monopolistic Competition and Efficiency
• Product Variety
• Oligopoly

TENTATIVE TIME PLAN FOR COURSE MATERIAL

Time (Weeks) Topics Objectives

1st week Introduction and the Market System (1) & (2)
nd
2 week Demand, Supply and Market Equilibrium (3) & (4)
3rd week Elasticity & Consumer Behavior (5) & (6)
*** Midterm Exam (1) *** (1) to (5)
(Saturday 18 / 7 / 2009 10:00 - 11:00 am)
4th week Production & Costs of Production (7) & (8)
5th week Perfect Competition (9)
6th week Monopoly (10)
*** Midterm Exam (2) ***
(Saturday 8 / 8 / 2009 10:00 - 11:00 am)
7th week Monopolistic Competition (11)
** Final Exam ** (1–11)
Economics 110 (Principles of Microeconomics) 4
Prof. Yousuf H.J. Garashi

(Monday 17 / 8 / 2007 5:00 - 7:00 pm)

Grading Scale
A A- B+ B B- C+ C C- D+ D F
95 + 90 – 87 – 83.5 – 80 – 77 – 73.5 – 70 – 65 – 60 – < 60
94.5 89.5 86.5 83 79.5 76.5 73 69.5 64.5

GENERAL INFORMATION
- Absenteeism: university regulations governing absenteeism are applied to all
students. This involves a first warning after 3 hours, a second warning after
additional 3 hours absence and a failure notice for any absence beyond the six
hours.

- Tardiness: Students showing signs of tardiness shall be warned for the first
time and subsequently barred from the lecture.

- Make up policy: students unable to attend an exam due to serious

circumstances must provide appropriate documents to verify the indicated
circumstances.

- Plagiarism and cheating: Violators will be reported to university

administration for appropriate action.

Note: Mobile phones must be off or silent during the lecture.

Violators will be expelled from class.

Note: Dr. Mohammed El-Sakka's website "http://www.cba.edu.kw/elsakka" contains

useful information.