Micro Economics & Business Environment Course Material

MPE@NMIMS-Bangalore
MPE: Batch 1- 2008

Trimester 1
Course: Micro-economics and Business Environment
COURSE OBJECTIVE
Time durations given are approximate, for guidance only and will vary from person to person
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
INTRODUCTION
 The study plan covering readings, classroom sessions, Group Work sessions and
Assignments corresponding to each session are outlined below.
 It is mandatory to go through the ‘Pre-Session Readings’. Quizzes or surprise tests would

be conducted on the same. For post contact reading, please refer to the handouts listed
under ‘Additional Readings’.
 The total course is spread over 18 sessions. Each session will be of 80 minutes duration
and thus the course duration is 24 hours including six (6) group work sessions and twelve
(12) interactive class sessions. The group work session will be for analysis of cases prior
to discussion in class.
 A participant would have to put in about 1.5 hours per theme for pre session reading,
about 3 hours per theme for additional readings. In addition, the time required doing
assignments would vary from one and half to two hours per assignment. Thus, the total
study time during the campus period would be about as given below:
o Pre Session reading – 12 hours
o Additional readings – 24 hours
o Assignment – 16 hours
 The themes that would be covered in the course are under:
Theme 1:
Theme 2:
Theme 3:
Theme 4:
Theme 5:
Theme 6:
Theme 7:
Theme 8:
Theme 9:
Theme 10:
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
PEDAGOGIC TOOLS
TOOLS
The pedagogic tools available to each participant are:
 Textbook
 Study Plan Booklet
The textbooks to be followed are:
 George Mankiw
Approach to Study
The study encompasses the following:
 Pre-Class Readings.
 Case Analysis in groups and submission of group assignments on case.
 Case discussion in class led by Faculty.
 Applying concepts learned in class to the company or division that a participant is working
in.
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
SESSION 1
THEME 1:
Pre-Session Readings
Text book
 Gregory Mankiw, Economic Principles and Applications, Centage Learning,2005
Thinking like an economist (pgs 34 to 46),
Additional Readings
Textbook
 John B Taylor,Ritika Gugnani,Principles of Microeconomics, Biztantra

Publications,2008
 The Central Idea of Economics (pgs 3 to 22)
Classroom Session
(80 min)
 Ten principles of economics
Group Work
Case study : Opportunity cost of doing a part-time MBA course
Case study: Gains from trade:comparitive advantage
SESSION 1
THEME 1: (CONTD…)
Assignment
(Assignment to be submitted) (45 min)
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Different economic systems- command, free market and mixed economic systems (Pg 16 to Pg
25, Economics, Sloman, Pearson Education)
SESSION 2
THEME 2:
Text book
 Gregory Mankiw, Economics Principles and Applications,Centage Learning)
 Supply, demand and government policies

(pgs 113 to 128)
Additional Readings
Textbook
 , Gregory Mankiw, Economics Principles and Applications, Centage Learning)
 Application: International trade

(pgs 166 to 178)
Classroom Session
(80 min)
 The Market forces of demand and supply
Group Work
Use supply and demand models to analyze real world issues: Case studies
How price controls interfere with market prices: Case studies
SESSION 2
THEME 2: (CONTD…)
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Assignment
Government intervention in the market : Case study- Rent control (Sloman, pg 71)
SESSION 3
THEME 3:
Text book

 Elasticity and its applications, (pgs 93 to 94 and 104-105)
Additional Readings
Textbook
John Sloman, Economics, Pearson Education,2008
Demand under conditions of risk and uncertainty (pgs 100-105)
Classroom Session
(80 min)
 Elasticity and its application

 Computing price elasticity
 Income elasticity of demand
 Elasticity of supply
Group Work
Factors behind growth of service sector in India
Effect of Price cuts in changing loyalty among air travellers.(Ritika gugnani-105)
Assignment
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Case study: Car rides Vs Bus rides in Bangalore city (Suma Damodaran, Pg 82)
SESSION 4
THEME 4:
Text book

 Consumers, producers and efficiency of the markets.(pgs134-137)
Additional Readings
Textbook
John Sloman, Economics, Pearson Education,2008 (pgs 92-99)
Classroom Session
(80 min)
 Consumer surplus
 Using demand curve to measure consumer surplus
 Producer surplus
 Market efficiency
Group Work
How taxes affect welfare-Analyze (Mankiw Pg 152-157)
SESSION 4
THEME 4: (CONTD…)
Assignment
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Case study: Consumer surplus and demand curves : Find out if consumer surplus exists for the
following category of products
a. Apple i-phone
b. A flight on jet-lite from Coimbatore to Bangalore
c. Gold-class ticket in mutltiplex
SESSION 5
THEME 5:
( pgs, min)
 Text book
 Gregory Mankiw, Economics Principles and Applications, Centage Learning
 Externalities(pgs 184-190)
Additional Readings
Textbook
 Gregory Mankiw, Economics Principles and Applications, Centage Learning
 Public goods and common resources (pgs 201-212)
Classroom Session
(80 min)
 Externality and market inefficiency

 Private solution to externalities
 Coase theorem
 Public policy towards externality
Group Work
Case study – Trading in Pollution rights in India (pg 401, Suma Damodaran)
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Assignment
Analyse the public –private partnership in infrastructure and other related projects.
a. Elevated highway between silk board junction and electronic city
b. Nirmal public toilet systems
c. Cochin international airport
SESSION 6
THEME 6:
Text book
 Gregory Mankiw, Economics Principles and Applications, Centage

Learning,2008
 Costs of Production (pgs 236 to 241)
Additional Readings
Textbook
 John Sloman, Economics, Pearson Education,2008.

 Costs in the short run (pgs 126-131)
Classroom Session
(80 min)
 The various measures of cost

 Fixed and variable costs
 Average and marginal costs
 Cost curves and their shapes
 Cost in the short run and long run
Group Work
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Case study: Green pricing and incentives (pg 162, John B Taylor and Ritika Gugnani)
Assignment
Select two firms producing the same product, one with a just-in-time system and the other without
it. Gather data on the number of units produced of the output and the number of workers per unit
of output. Compare the performance of the two firms.
SESSION 7
THEME 7:
Text book
 Gregory Mankiw, Economics Principles and Applications, Centage Learning,2008
 Firms in competitive markets (pgs 253 to 263 )
Additional Readings
Textbook

 Perfect Competition (pgs 158-164)
Classroom Session
(80 min)
 Meaning of competition
 Profit maximization and competitive firms supply curve
 The firm’s short run decision to shut down
 Supply curve of a competitive firm
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Group Work
Visit a vegetable market. Assess the market along the following factors: a. Degree of competition.
B. ease of entry c. Product range d. product information d. number of sellers e. number of buyers
and f. their profit margins
Assignment
Case study 2: Computer industry (Suma Damodaran Pg 247)
SESSION 8
THEME 8:
Text book
 Gregory Mankiw, Economics Principles and Applications, Centage Learning,2008
 Monopoly (pgs 271 to 275 )
Additional Readings
Textbook

 Monopoly (pgs 166-175)
 Classroom Session
(80 min)
 Monopoly vs. competition
 Monopolist’s revenue
 Profit maximization
 Welfare cost of monopoly
 Price discrimination
Group Work
 Conduct a survey of economic activities wherein the seller has resorted to price
discrimination in your geographical location. Classify these as first degree, second
degree and third degree price discrimination. Assess the features that help sustain
the practice of price discrimination in each case.
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Assignment
Analyze the case of price discrimination practiced by multiplexes in Bangalore.
SESSION 9
THEME 9:
Text book
 Gregory Mankiw, Economics Principles and Applications, Centage

Learning,2008
Oligopoly (pgs299 to 303)
Additional Readings
Textbook
 Oligopoly (pgs 181-185)
Classroom Session
(80 min)
 The growth of oligopoly

 Equilibrium for an oligopoly
 Kinked demand curve
Group Work
Case study: OPEC and the world oil market
Assignment
Analyze the cement, automobile, airline and tyre industries in India and find out which of these
industries is more prone to cartel formation.
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
SESSION 10
THEME 10:
( pgs, min)
 Text book
 (pgs to )
 (pgs to )
Additional Readings
( pgs, min)
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
 Textbook
 (pgs to )
 (pgs to )
Classroom Session
(80 min)




Group Work
( pgs, min)

 (pgs to )
SESSION 10
THEME 10: (CONTD…)
Assignment
 Study Plan Booklet – assignment. (pg )
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
SESSION 11
THEME 11:
( pgs, min)
 Text book
 (pgs to )
 (pgs to )
Additional Readings
( pgs, min)
 Textbook
 (pgs to )
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
 (pgs to )
Classroom Session
(80 min)




Group Work
( pgs, min)

 (pgs to )
SESSION 11
Assignment
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
SESSION 12
THEME 12:
( pgs, min)
 Text book
 (pgs to )
 (pgs to )
Additional Readings
( pgs, min)
 Textbook
 (pgs to )
 (pgs to )
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Classroom Session
(80 min)




Group Work
( pgs, min)

 (pgs to )
SESSION 12
Assignment
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
SESSION 13
THEME 13:
( pgs, min)
 Text book
 (pgs to )
 (pgs to )
Additional Readings
( pgs, min)
 Textbook
 (pgs to )
 (pgs to )
Classroom Session
(80 min)
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1



Group Work
( pgs, min)

 (pgs to )
SESSION 13
Assignment
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
SESSION 14
THEME 14:
( pgs, min)
 Text book
 (pgs to )
 (pgs to )
Additional Readings
( pgs, min)
 Textbook
 (pgs to )
 (pgs to )
Classroom Session
(80 min)




MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Group Work
( pgs, min)

 (pgs to )
SESSION 14
Assignment
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
SESSION 15
THEME 15:
( pgs, min)
 Text book
 (pgs to )
 (pgs to )
Additional Readings
( pgs, min)
 Textbook
 (pgs to )
 (pgs to )
Classroom Session
(80 min)




Group Work
( pgs, min)
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
 (pgs to )
SESSION 15
Assignment
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
SESSION 16
THEME 16:
( pgs, min)
 Text book
 (pgs to )
 (pgs to )
Additional Readings
( pgs, min)
 Textbook
 (pgs to )
 (pgs to )
Classroom Session
(80 min)




Group Work
( pgs, min)

 (pgs to )
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
SESSION 16
Assignment
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
SESSION 17
THEME 17:
( pgs, min)
 Text book
 (pgs to )
 (pgs to )
Additional Readings
( pgs, min)
 Textbook
 (pgs to )
 (pgs to )
Classroom Session
(80 min)




Group Work
( pgs, min)

 (pgs to )
SESSION 17
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Assignment
SESSION 18
THEME 18:
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
( pgs, min)
 Text book
 (pgs to )
 (pgs to )
Additional Readings
( pgs, min)
 Textbook
 (pgs to )
 (pgs to )
Classroom Session
(80 min)




Group Work
( pgs, min)

 (pgs to )
SESSION 18
MPE@NMIMS-Bangalore
MPE: Batch 1- 2008
Trimester 1
Assignment

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MPE@NMIMS-Bangalore

MPE: Batch 1- 2008

 It is mandatory to go through the ‘Pre-Session Readings’. Quizzes or surprise tests would

o Pre Session reading – 12 hours

o Additional readings – 24 hours

 The themes that would be covered in the course are under:

The pedagogic tools available to each participant are:

 Study Plan Booklet

The textbooks to be followed are:

The study encompasses the following:

 Case Analysis in groups and submission of group assignments on case.

 Case discussion in class led by Faculty.

 Gregory Mankiw, Economic Principles and Applications, Centage Learning,2005

Thinking like an economist (pgs 34 to 46),

 John B Taylor,Ritika Gugnani,Principles of Microeconomics, Biztantra

 Ten principles of economics

Case study : Opportunity cost of doing a part-time MBA course

Case study: Gains from trade:comparitive advantage

 Gregory Mankiw, Economics Principles and Applications,Centage Learning)

 Supply, demand and government policies

 , Gregory Mankiw, Economics Principles and Applications, Centage Learning)

 Application: International trade

 The Market forces of demand and supply

How price controls interfere with market prices: Case studies

 Gregory Mankiw, Economics Principles and Applications,Centage Learning)

John Sloman, Economics, Pearson Education,2008

Demand under conditions of risk and uncertainty (pgs 100-105)

 Elasticity and its application

Factors behind growth of service sector in India

Effect of Price cuts in changing loyalty among air travellers.(Ritika gugnani-105)

 Gregory Mankiw, Economics Principles and Applications,Centage Learning)

John Sloman, Economics, Pearson Education,2008 (pgs 92-99)

How taxes affect welfare-Analyze (Mankiw Pg 152-157)

b. A flight on jet-lite from Coimbatore to Bangalore

c. Gold-class ticket in mutltiplex

 Gregory Mankiw, Economics Principles and Applications, Centage Learning

 Public goods and common resources (pgs 201-212)

 Externality and market inefficiency

a. Elevated highway between silk board junction and electronic city

b. Nirmal public toilet systems

c. Cochin international airport

 Gregory Mankiw, Economics Principles and Applications, Centage

 John Sloman, Economics, Pearson Education,2008.

 The various measures of cost

 Gregory Mankiw, Economics Principles and Applications, Centage Learning,2008

 Firms in competitive markets (pgs 253 to 263 )

 John Sloman, Economics, Pearson Education,2008.

Case study 2: Computer industry (Suma Damodaran Pg 247)

 Gregory Mankiw, Economics Principles and Applications, Centage Learning,2008

 Monopoly (pgs 271 to 275 )

 John Sloman, Economics, Pearson Education,2008.

Analyze the case of price discrimination practiced by multiplexes in Bangalore.

 Gregory Mankiw, Economics Principles and Applications, Centage

 John Sloman, Economics, Pearson Education,2008.

 Oligopoly (pgs 181-185)

 The growth of oligopoly

Case study: OPEC and the world oil market

 Study Plan Booklet

 Study Plan Booklet

 Study Plan Booklet