Economics Department
College of Business Administration
Kuwait University
Econ 210 (Microeconomic Theory)
First Semester 2015/2016
Professor Yousuf Hasan Jawad Garashi
Lectures: Sun, Tue & Thu 1:00 – 1:50 pm, Room 302, Shuwaikh Building # 2
General Information
Office Hours
Days: Sun, Tues & Thu Time: 12:00 Noon – 1:00 PM. Also, by appointment.
Place: Office – Economics Department - College of Business Administration
Telephone: Direct 2498-8428 / Secretary 2498-8425 & 2498-8426
Email:
Schedule of Exams and Grade Distribution
Activity / Weight /Date
Midterm Exam (1) / 20% / Sunday 25 / 10 / 2015 1:00 – 1:50Midterm Exam (2) / 20% / Thursday 10 / 12 / 2015 1:00 – 1:50
Final Exam / 50% / Sunday 27 / 12 / 2015 11:00 – 1:00
Other / 10% / Assignments & Quizzes
Total / 100% / Note: No make-up exams will be arranged
Tutorial Classes
· Tutorials: Day: Time: 00:00 – 00:00 Room:
· Mrs. Asia Asiri is the tutor.
· Tutorial classes are crucial for understanding the course material.
· Attendance is mandatory and absence is equivalent to absence from lectures.
Course Objective
“Achieving a solid understanding of the fundamental concepts and theories of Microeconomics and providing the student with an analytical background to enable him to analyze effectively microeconomic issues and problems.”
Required Textbook
“Intermediate Microeconomics: A Modern Approach, Hal R. Varian, 9th Edition, W.W. Norton & Company, 2014.”
COURSE CONTENT AND READINGS
The Market (Chapter 1)
Review of Basic Concepts and Definitions
Scope of Microeconomics
The Market
Building Economic Models
Optimization and Equilibrium
Market Equilibrium
Comparative Statics
Government Intervention
Budget Constraint (Chapter 2)
The Budget Constraint
Properties of the Budget Set
Changes in the Budget Set
The Numeraire
Taxes, Subsidies and Rationing
Examples
Preferences (Chapter 3)
Assumptions about Preferences
Indifference Curves
Examples of Preferences (Perfect Substitutes& Complements)
Well-Behaved Preferences
Marginal Rate of Substitution
Interpretation and Behavior of MRS
Utility (Chapter 4)
Ordinal & Cardinal Utility
Utility Function and Indifference Curves
Examples of Utility Functions
Marginal Utility and MRS
Choice (Chapter 5)
Optimal Choice
Consumer Demand
Examples on Equilibrium
Demand (Chapter 6)
Normal & Inferior Goods
Income Consumption Curve
Ordinary and Giffen Goods
Price Consumption Curve
Substitutes and Complements
Inverse Demand Curve
Consumer’s Surplus (Chapter 14)
Slutsky Equation (Chapter 8)
Substitution and Income Effect
Total Effect & Slutsky Equation
The Law of Demand
Compensated Demand
Market Demand (Chapter 15)
Determining the Market Demand
The Concept of Elasticity
Elasticity & Total Revenue (Expenditures)
Price Elasticity & Price Consumption Curve
Income Elasticity & Engle Curve
Equilibrium (Chapter 16)
Market Equilibrium
Special Cases
Comparative Statics
Taxes and Subsidies
The Economic Impact of Taxes
Technology (Chapter 18)
Meaning of Production
Inputs and Outputs
Production Function
Short and Long Run
Laws of Production
Isoquant Curves
Returns to Scale
Profit Maximization (Chapter 19)
Profits, Organization of the Firm & Stock Market
Short Run Profit Maximization
Profit Maximization in the Long Run
Inverse Factor Demand Curves
Profit Maximization and Returns to scale
Cost Minimization
Cost Minimization (Chapter 20)
Cost Minimization
Returns to Scale and the Cost Functions
Long Run and Short Run Costs
Fixed, Quasi Fixed and Sunk Costs
Cost Curves (Chapter 21)
Average Costs and Marginal Costs
Examples on Cost Curves
Long Run Marginal Costs
Firm Supply (Chapter 22)
Market Environment
Pure Competition
The Supply Decision of a Competitive Firm
Exception One and Two
The Inverse Supply Function
Profits and Producer's Surplus
The Supply Curve for a Specific Cost Function
The Long Run Supply Curve of a Firm
Industry Supply (Chapter 23)
Short Run Industry Supply
Short Run Industry Equilibrium
Long Run Industry Equilibrium
Long Run Industry Supply
The Meaning of Zero Profits
Economic Rent
Monopoly (Chapter 24)
Maximizing Profits
Linear Demand Curve & Monopoly
Markup Pricing
Deadweight Loss of Monopoly
Natural Monopoly
Causes of Monopolies
Monopoly Behavior (Chapter 25)
First and Second Degree Price Discrimination
Examples of Price Discrimination in Airfares
Monopolistic Competition
Product Differentiation
Oligopoly (Chapter 27)
Choosing a Strategy
Quantity Leadership
The Follower’s Problem
The Leader’s Problem (Price Leadership)
Comparing Price Leadership and Quantity Leadership
Collusion
Econ 210 (Microeconomic Theory)
First Semester 2015 / 2016
Sun, Tue & Thu 1:00 – 1:50 pm
Room # 302 Shuwaikh Building # 2
Week / Topics / Comments1 / The Market (Ch. 1) / Midterm Ex (1)
Sunday
25 / 10 / 2015
1:00 – 1:50
2 / Budget Constraint (Ch. 2)
3 / Preferences (Ch. 3)
3 / Utility (Ch. 4)
4 / Choice (Ch. 5)
5 / Demand (Ch. 6)
6 / Slutsky Equation (Ch. 8)
7 / Market Demand (Ch. 15)
7 / Equilibrium (Ch. 16)
8 / Technology (Ch. 18) / Midterm Ex (2)
Thursday
10 / 12 /2015
1:00 – 1:50
9 / Profit Maximization (Ch. 19)
10 / Cost Minimization (Ch. 20)
10 / Cost Curves (Ch. 21)
11 / Firm Supply (Ch. 22)
11 / Industry Supply (Ch. 23)
12 / Monopoly (Ch. 24) / Final Exam
Sunday
27 / 12 / 2015
11:00 – 1: 00
13 / Monopoly Behavior (Ch. 25)
14 / Oligopoly (Ch. 27)