Post Graduate Programme in Management
AY 2024-2025 TERM: I
TITLE OF THE COURSE: MICROECONOMICS FOR MANAGERS
COURSE TYPE: CORE
CREDITS: 4 No. of Sections: 8
Name of Faculty Office e-mail Telephone Consultation
Time for students
Ajay Sharma J – 206 [email protected] +91-731-2439622 With
Appointment
Mohina Saxena J – 217
[email protected] +91-731-2439665 Only
Mitul Surana C-111
[email protected] +91-731-2439594
Siddhartha Rastogi B-101 [email protected] +91-731-2439534
CONSULTATION TIME FOR STUDENTS
Name of the Faculty Timing
Ajay Sharma With Appointment
Mohina Saxena Only
Mitul Surana
Siddhartha Rastogi
COURSE DESCRIPTION:
This course serves as the first course in Microeconomics. The focus of the course is on building
understanding of economic concepts and tools to facilitate decision-making in business management
as well as public policy contexts. A special emphasis is given on conceptual application in Indian
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.
EXPECTED LEARNING OUTCOMES AND ASSOCIATED MEASURES:
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Course Learning Outcome Program Level Goals/ Outcome Assessment
Tool(s)
1. Will be able to appreciate Goal 1. Develop critical thinking ability Already mapped
behavior of and linkages between
different economic agents 1.2 Identify the decision problem along
with sources.
2. Will be able to apply tools of Goal 1. Develop critical thinking ability Already mapped
microeconomic analysis to
understand behavior of economic 1.3 Identifies and presents appropriate
evidence supporting the analysis of
agents
alternatives
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.
TEXTBOOK:
The basic reference book used is Besanko, D. and Braeutigam, R. (2015) Microeconomics, 5th
Edition, Wiley India (hereafter B-B). The corresponding pages in the 5th edition e-book for each
session are also indicated as E-B.
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:
Individual Component Group Component Weightage
Class Participation 10%
Surprise Quizzes 20%
Mid-term Exam 35%
End-term Exam 35%
Total 100%
ACADEMIC DISHONESTY:
IIM Indore believes in Academic honesty. Academic dishonesty or misconduct is cheating that relates
to an academic activity. It is a violation of trust between the Institute and its stakeholders. Plagiarism,
fabrication, deception, cheating, and sabotage are examples of unacceptable academic conduct.
Please consult the Programme manual for the section on academic dishonesty.
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SCHEDULE OF SESSIONS:
Module I. Basic Economic Concepts
Module Objective: To introduce the participants to the economic way of thinking
SESSIONS AND OBJECTIVE
Session 1: Basic Economic Concepts
Objective: How economists think to make sense of the world
Readings: Chap-1: Analyzing economic problems
Cases: - The Toughest Ticket in Sports, links: http://goo.gl/aZ7bnz;
http://goo.gl/riXmVk
- Positive and Normative analysis of the minimum wage (B-B pg. 15-16; E-
B pg. 19-20)
Module II Consumer Behaviour
Module Objective: To understand the behaviour patterns of consumers under different conditions
SESSIONS AND OBJECTIVE
Session 2: Consumer Behaviour
Objective: How consumers match scarce resources with unlimited wants
Reading: Chap-3: Consumer preferences and the concept of utility, (B-B pg. 59-77; E-B
pg. 75-97) and Chap-4: Consumer choice (B-B pg. 83-95; E-B pg. 105-122)
Cases: - Blind taste tests (B-B pg. 76; E-B pg. 95)
- The effect of rising petrol prices on driving habits (B-B pg. 88; E-B III)
Sessions 3-4: Demand and Supply Analysis
Objective: What and how affects demand and supply of various classes of goods. How an
equilibrium is reached under different conditions
Reading: Chap-2: Demand and Supply Analysis (B-B pg. 21-33; E-B pg. 26-44) and Chap
5: The Theory of Demand (B-B pg. 121-132, pg. 131-141; E-B pg. 152-161, pg.
164-177)
Cases: - A Computer on Every Desk and in Every Home (B-B pg. 31-33; E-B pg.
40-43)
- Externalities in social networking websites (B-B pg.150; E-B 187)
Session 5: Elasticity
Objective: How to measure the changes in demand and supply
Reading: Chap-2: Demand and Supply Analysis (B-B pg. 34-44; E-B pg. 45-56)
Case: How people buy cars: The importance of price (B-B pg. 44; E-B pg. 55)
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Module III Production and Product Pricing Decisions
Module Objective: To study production decisions and product pricing under different conditions
SESSIONS AND OBJECTIVE
Session 6: Theory of Production
Objective: What are the basic concepts related to production choices
Reading: Chap-6: Inputs and Production Functions (B-B pg. 163-186 and 188-190; E-B
pg. 204-232 and pg. 233-239)
Cases: How much is a qualification worth (B-B pg. 194; E-B pg. 240)
Session 7: Theory of Cost
Objective: What are the relevant costs and ensuing implications
Reading: Chap-7: Costs and Cost Minimization (B-B pg. 201-212; E-B pg. 249-262) and
Chap -8: Cost Curves (B-B pg. 235-249; E-B pg. 289-307)
Cases: - Who is more likely to avoid the sunk cost fallacy (B-B pg. 206; E-B pg.
256)
- Self-Checkout or Cashier? (B-B pg. 212; E-B pg. 261)
Module IV Market Structures
Module Objective: To explore different market structures and implications for economic
decisions
SESSIONS AND OBJECTIVE
Session 8: Competitive Supply
Objective: How markets behave under perfectly competitive environment
Reading: Chap-9: Perfectly competitive markets (B-B pg. 267-280 and 303-312; E-B
pg. 331-345 and pg. 370-381).
Case: Perfect Competition in Wood Products (B-B pg. 271; E-B pg. 335)
Sessions 9-10: Impact of Taxes and Subsidies
Objective: How government's policy decisions affect the consumers and suppliers
Reading: Chap-10: Competitive markets: Applications
Cases: - Petrol: The effect of a Frozen Fuel Duty (B-B pg. 327-329; E-B pg.
399-401)
- A Bailout of the King of Cheeses (B-B pg. 351; E-B pg. 425)
Session 11-12: Monopoly and Market Power
Objective: How markets behave when market power exists
Reading: Chap-11: Monopoly and Monopsony (B-B pg. 363-380 and 389-395; E-B pg.
442-462 and pg. 473-478)
Case: Market Power in the Breakfast Cereal Industry (B-B pg. 380; E-B pg. 461)
Sessions 13-14: Pricing with Market Power
Objective: How to price the product when cost is not the only parameter
Reading: Chap-12: Capturing Surplus (B-B pg. 405-433; E-B pg. 481-521)
Case: Education in the First Degree (B-B pg. 412-413; E-B pg. 498); Bundling
Television (B-B pg. 433; E-B pg. 521)
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Sessions 15-16: Monopolistic Competition and Oligopoly
Objective: What are the more common market structures and their process of decision-
making
Reading: Chap-13: Market Structure and Competition (B-B pg. 441-456 and 467-470;
E-B pg. 532-550 and pg. 562-568)
Cases: - Corn Syrup Capacity expansion confirms Cournot (B-B pg. 449-450;
E-B pg. 572)
- Smartphone wars (B-B pg. 462; E-B pg. 556)
Sessions 17-18: Competitive Strategy
Objective: How market structures make decision-making a strategic and competitive
process
Reading: Chap-14: Game Theory and Strategic Behaviour (B-B pg. 477-492; E-B pg.
575-594)
Case: Everyone Loses Except Lawyers (B-B pg. 481; E-B pg. 580)
Module V Market Failures
Module Objective: To explore situations and remedies when markets fail
SESSIONS AND OBJECTIVE
Session 19: Economics of Information
Objective: What are the cost, benefits, and implications of information
Reading: Chap-15: Risk and Information (B-B pg. 522-527; E-B pg. 627-633)
Case: Adverse selection in health insurance market (B-B pg. 524-526; E-B pg. 629)
Session 20: Externalities
Objective: Are there situations where markets fail due to externalities
Reading: Chap-17: Externalities and Public Goods (B-B pg. 591-613; E-B pg. 703-728)
Cases: - Clearing the Air: The European Carbon Emission Trading Market as a
response to climate change (B-B pg. 605; E-B pg. 717)
- London’s Congestion Charge (B-B pg. 607-608; E-B pg. 720)
Text Book for the course: Please give the details of the book if students need to buy the book
Author Title Publisher Edition Remarks, if any
th
Besanko, D. Microeconomics Wiley India 5 edition
and
Braeutigam,
R.
Reference Text Book: The following books are recommended for supplementary reading:
1.
2.
Additional Readings:
