Institute of Management Technology

Hyderabad
PGDM program

Course Code. : GEM 102

Course Title : Microeconomics
No. of Sessions : 20
Duration of session : 90 Min
Instructor(s) : Dr. Avishek Bhandari
Email : bavisek@imthyderabad.edu.in

1. Course Description

This course introduces you to the concept of markets, pricing and managerial decision
making. The primary objective of this course is to discuss the fundamental principles of
microeconomics and how these principles can be applied to managerial decision making.
The first part focuses on essential concepts such scarcity and efficiency, problems of
economic society, demand analysis, elasticity, consumer behavior, producer behavior, and
cost analysis. This part ends with a fundamental result in economics: a set of conditions
under which markets function efficiently.

The second part of the course focuses on advanced topics in economic analysis, with a focus
on strategic behavior of the business firms, different kinds of market structures and pricing
strategies. Strategic behavior of firms modeled by game theory will be the essence of this
part. The course will introduce concepts like economic incentives, marginal analysis,
opportunity costs, market efficiency, strategic behavior and asymmetric information.

2. Course Objectives

The purpose of this course is to lay the foundations of economic thinking and to provide a
firm ground to build specialized knowledge in the forthcoming semesters.

3. Learning goals and Assessment

Learning goals Learning Outcomes Learning Assessment

method
The course aims to impart At the end of the course the students should The outcomes would be
be able to assessed through
Functional Proficiency & Knowledge
Integration  Evaluate economic behavior,
response to incentives, utility,

Analytical and Critical
Thinking Ability
Leadership and 
Interpersonal Skills
Communication Skills
Ethical and Global  
Perspective
Creativity and Innovation 
Skills
satisficing and maximizing traits in
consumers
 Understand and appreciate the  Group exercises (group
production dynamics – including projects)
cost, revenue and profit  Comprehensive
considerations Examination
 Evaluate and compare the various  Case studies (CP)
types of market structures and use  Test (Quiz)
them when planning price policy in  Projects (assignments)
industry
 Learn the optimization functions for
both consumer and producer
equilibrium. ‘Constrained
optimization’ is the basic framework
of managerial decision making
 Demonstrate the use of micro
concepts like elasticity and
opportunity cost in strategic
planning
Skills  Group exercises (group
 Design optimal combinations for use projects, Debates)
of scarce resources with the  Projects (assignments)
marginal cost – benefit analysis
Collect data/ information from secondary 
Group exercises (group
projects, Debates)
sources for decision making in group and
individual assignments/projects.  Projects (assignments)
 Case discussion (CP)
 Test
 Comprehensive
Examination
Students work in teams in group  Group exercises (group
projects and develop ability to convince projects)
economic logic in contradictory
situation
 Articulate orally in a crisp and concise  Group exercises
manner  Class Participation
Appreciate and learn innovative ways of  Group exercises (group
presenting economics concept from projects)
best sellers  Projects (assignments)
 4. Textbook:

Managerial Economics and Business Strategy, Michael Baye 8th edition (Indian Edition),
Tata McGraw Hill

5. Reference Books:

Microeconomics – Pindyck and Rubinfield 7th edition, Pearson

Price Theory and Applications – Jack Hirshleifer, David Hirshleifer & Amihai Glazer – 6th
edition, Cambridge University Press

Managerial Economics – Principles and Worldwide Applications–Salvatore and Rastogi–8th

edition–Oxford university press

Microeconomics for Managers – David Kreps 1st edition (Viva Books for W W Norton)

Additional Reading
One Financial Daily – The Business Line/Mint/Business Standard/Economic Times –
Editorials to be read on a daily basis.

6. Course Prerequisites

None

7. Pedagogy

Lectures, Case discussion, sessions by practitioners, and interactive quizzes.

8. Course content and Session Plan:

Session Topic Content/Descriptions Reading Pedagogy

1 Course Lecture/
Fundamental concepts,
Fundamentals of Handout Discussion
role of the firm, Scarcity
Managerial Discussion;
and efficiency, Marginal
Economics Chp 1 -
Analysis
Textbook
2 Market forces
Demand and Supply Chp 2 & 3 Lecture/Class
:Demand and
dynamics Textbook; exercises
Supply
3 Market forces Demand and Supply Chp 2 & 3 Lecture/Class
 :Demand and dynamics Textbook; exercises
Supply Elasticity Concepts
4 Budget constraints,
Theory of
Consumer Equilibrium - Chp 4 - Class
Individual
Application of Textbook Discussion
Behaviour
Indifference Curves
5 Budget constraints, Case: How to
Theory of
Consumer Equilibrium - market in a Case
Individual
Application of downturn Discussion
Behaviour
Indifference Curves HBR
6 Production functions, Chp 5 – Text
Lecture &
Production Returns to scale, Book, Mittal
Case
Theory Economies of scale and Steel in 2006
Discussion
scope HBS
7 Cost functions, Break
Chp 5 - Class
Cost Analysis even Analysis, Cost
Textbook discussion
structures
8 Cost Analysis Chps 5 Class
Cost structures
(Contd.) Textbook discussion
9 Strategy-Structure,
Nature of the Chp 7 Class
Conduct Performance
Industry Textbook discussion
Paradigm
10 Chp 8 -
Textbook,
Volvo Game on
Managing in Pure, Perfect,
Trucks: Markets/
Competitive Monopolistic and
Penetrating Case
Markets Contestable Markets
the US Discussion
Market
HBS#702418
11 Chp 8 –
Class
Textbook;
Discussion -
Degrees of Monopoly, Discussion
Monopoly & teams will
Sources of Market on the
Price present
Power, Regulated Evolution of
Discrimination views and
Monopolies the Indian
steer the
Telecom
discussion
Industry
12 Collusion,
Interdependencies, Price
Oligopoly Lecture and
Wars, Kinked Demand Chp 9 - Baye
Models Discussion
Curves, Price Leadership
Models
13 Review of Monopoly, Monopolistic Discussion Lecture and
Market competition, duopoly, on Indian Discussion
 Structures: oligopoly, Monopsony Railways,
Indian context. Indian
cellular
service
providers,
and
automobile
industry.
14 Single, Sequential and
Game Theoretic Multi-period games,
Chp 10 - Lecture and
Approach to Prisonner's Dilemma &
Baye Discussion
Oligopoly Nash Equilibria, Credible
Threats and Deterrence
15 Pricing frameworks,
Pricing Joint Products,
Lecture &
Strategies & Intertemporal, Value Chp 11 Baye;
Discussion
Approaches based pricing, Transfer
Pricing
16 Concepts of uncertainty
and asymmetric
Economics of information, Risk Chp 12 - Lecture &
Information preferences, Adverse Textbook; Discussion
selection, Moral Hazard,
Auctions
17 The Input procurement,
Chp 6 Practitioner
Organization of transaction costs,
Textbook Sessions
the Firm Principal-Agent problem
18 The Input procurement,
Chp 6 Practitioner
Organization of transaction costs,
Textbook Sessions
the Firm Principal-Agent problem
19 Case:
Business & government
Forever: De
Government in relations; Cartels; Legal Case
Beers and
the Marketplace aspects of business; Discussion
U.S. Antitrust
Monopolies
Law
20 Class
Discussion -
Sources of market Market
Government in failure, Public Goods and Chp 14 - power and
the Marketplace Externalities, Rent Textbook social welfare
seeking behavior - why they
don't go
together
 9. Practitioner Details

TBD

10. Assessment Scheme:

EC
Evaluation Weightage Date & Time
No
Component (%)
.
1
Projects 10 1-5 weeks

2 Group exercises 30 1-8 weeks

3 Class participation 10 Daily
4 Test (Quizzes) 20 TBD
5 Comprehensive Exam 30 TBD

Details about the assessment components and guidelines

 Projects (Assignments) (10%) - These will include the quantitative problem sets
and written analysis of cases. This will include individual submission of certain
tasks. These would help the students evaluate economic decision making and
compare across situations. These tasks would encourage the students to optimally
use economic concepts and logic in their writing.

 Group Exercises (30%) - Group exercises includes group projects. This is one of the
consolidated tasks in the course. It will help the student integrate his learning of the
various concepts, improve his ability to synthesize and also empirically test his
proposition. Since this is a team task, this will also inculcate the ability to contradict
with logic, accept and negotiate a point of view and also defend with reason.

 Class Participation (10%) - This component will enable a student to test his thinking
process in a group and rivalrous setting. This will help a student shed inhibitions
and fear of speaking in a group and thus will inculcate the much needed articulation
abilities. This component would be divided into two parts - one at the end of 10
sessions and one at the end of the course. Feedback will be given at the end of the
two parts.

Rubrics for Class

Participation
Criteria Level 1 Level 2 Level 3 Level 4
Marks 0-4 5-- 6 7-- 8 9--10
1 Quality of Comments Comments Comments Regularly
comments are are mostly contributes to the
(Preparedness, Uninformati sometimes insightful & discussion by
understanding ve, lacking Constructive constructive; raising thoughtful
of issues and in with mostly uses questions, analyzing
analytical appropriate occasional appropriate relevant issues,
abilities) terminology signs of terminology. building on others’
Heavy insight. Occasionally ideas, synthesizing
reliance on Student does comments are across readings &
opinion not too discussions,
Lack ability use general or not expanding the class’
to think appropriate relevant to perspective, &
analytically terminology; the appropriately
comments discussion. challenging
not always assumptions &
relevant to perspectives
the
discussion
2 Communication Unable to Ineffective Is able to Able to articulate
articulate articulation, convey the ideas and thoughts
clearly, uses use some message, but clearly in crisp &
lengthy, distracting occasionally concise manner
confounding filler words unable to be
sentence, gestures; concise Clear word choices
audience and arguments
has
difficulty
understandi
ng what was
communicat
ed
3 Engagement Does not Student is Student is Student listens
(Active Listening listen to often mostly attentively
Skills) others; inattentive & attentive when others present
talks while needs when others materials,
others reminder of present ideas, perspectives,
speak or focus of class. materials, as as indicated by
does not pay Occasionally indicated by comments
attention makes comments that build on others’
while others disruptive that reflect & remarks, i.e., student
speak; comments build on hears’ what others
detracts while others others’ say
from are speaking remarks. & contributes to the
discussion; Occasionally dialogue.
sleeps, etc. needs
 encourageme
nt or
reminder

 Test (Quizzes) (20%) - This component is designed to evaluate a student's ability to

respond with knowledge and reason under time constraints and limited access to
information. He has to use acquired and assimilated knowledge to demonstrate his
economic logic

 Comprehensive Exam (30%) - The final part of the coursework - this component
helps to test consolidated learning under time and information constraints, tests
assimilation abilities and also evaluates ability to write a comprehensive argument.
This will use caselets and situations to analyze the students' skills and not essay
type questions.

All assignments and tests would be returned within 10 days. Class Participation feedback
would be given twice in the duration of the course.

11. Plagiarism Policy

Copying of the language, structure, ideas, or thoughts of another and representing the same
as one's own original work amounts to plagiarism. Examples of plagiarism include: failing
to use quotation marks when directly quoting from a source; failing to document
distinctive ideas from a source; fabricating or inventing sources; and copying information
from books and the internet. Students found guilty of plagiarism will not be evaluated.
Instructor shall decide to give warning or grade cut or refers such students to the
disciplinary committee for further action.

12. Consultation Hours:

Monday/Tuesday – 4 pm - 5 pm or by appointment. You can reach me via email:

bavisek@imthyderabad.edu.in