Principles of Microeconomics – Syllabus and Course Structure

Principles of Microeconomics

Course Overview

This course introduces students to the fundamental concepts and analytical tools of microeconomic theory. It covers the behavior of consumers and producers, market structures, government policies, and market failures, with applications to real-world economic issues.

Course Topics

• Introduction

  • Overview of microeconomics and its scope

  • Basic economic problems and the role of models

• Examples of Economic Modelling: Production Possibilities Boundary and the Gains from Trade

  • Production Possibilities Frontier (PPF): graphical representation of trade-offs and opportunity cost

  • Gains from trade: how specialization and exchange increase overall welfare

  • Formula: Opportunity Cost = Amount of other good given up / Amount of good gained

  • Example: If a country can produce either 10 cars or 20 computers, the opportunity cost of 1 car is 2 computers.

• Demand and Supply; Price Elasticity

  • Demand: Relationship between price and quantity demanded

  • Supply: Relationship between price and quantity supplied

  • Equilibrium: Where demand equals supply

  • Price Elasticity of Demand: Measures responsiveness of quantity demanded to price changes

  • Formula: $E_d = \frac{\% \text{ change in quantity demanded}}{\% \text{ change in price}}$

  • Example: If a 10% increase in price leads to a 20% decrease in quantity demanded, $E_d = -2$ (elastic demand).

• Analysis of Government Policies

  • Price controls: price ceilings and price floors

  • Taxation: effects on market equilibrium and welfare

  • Example: Rent control as a price ceiling can lead to shortages in housing.

• Consumer Behaviour

  • Utility maximization: how consumers allocate resources to maximize satisfaction

  • Budget constraints: limits imposed by income and prices

  • Formula: $MU_x / P_x = MU_y / P_y$ (where MU is marginal utility, P is price)

• Producers in the Short Run and Long Run

  • Short run: at least one input is fixed

  • Long run: all inputs are variable

  • Cost structures: fixed, variable, and total costs

  • Formula: $TC = FC + VC$ (Total Cost = Fixed Cost + Variable Cost)

• Market Structures

  • Perfect competition: many firms, identical products

  • Monopoly: single seller, unique product

  • Monopolistic competition: many firms, differentiated products

  • Oligopoly: few firms, interdependent decisions

  • Price discrimination: charging different prices to different consumers

  • Example: Airlines charging different fares for the same route based on booking time.

• Factor Markets

  • Markets for inputs such as labor, land, and capital

  • Wage determination and labor supply

• Market Failures

  • Externalities: costs or benefits not reflected in market prices

  • Public goods: non-excludable and non-rivalrous goods

  • Government intervention to correct market failures

Course Structure and Evaluation

• Textbook: Microeconomics by Christopher T. S. Ragan (18th Canadian Edition)

• Prerequisite: MAT 190 or equivalent

• Assessment:

  • Term Tests and Final Exam

  • Best Term Test: 40% or 30% (whichever yields higher grade)

  • Final Exam: 40% or 70%

  • Review questions and problems provided for exam preparation

Course Schedule (Chapters)

Topic	Chapter(s)
Introduction	1, 2
Production Possibilities & Trade	1, 9
Demand, Supply, Price Elasticity	3, 4, 5.3
Government Policies	5.1-5.2, 6.3
Consumer Behaviour	6.1-6.2
Producers in Short/Long Run	7, 8
Market Structures	9, 10, 13
Factor Markets	14
Market Failures	16

Additional info:

• Office hours and contact details are provided for student support.

• Alternate test dates require official permission for compassionate reasons.