MICRO ECONOMICS (131) Assignment No. 1 & 2 SEMESTER SPRING 2014

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MICRO ECONOMICS (131) Assignment No. 1 & 2 SEMESTER SPRING 2014


ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(Department of Business Administration)



MICRO ECONOMICS (131)


CHECKLIST


SEMESTER: SPRING 2014




This packet comprises the following material:


1. Text Book (one)
2. Course Outlines
3. Assignment No. 1 & 2
4. Assignment Forms (2 sets)


In this packet, if you find anything missing out of the above mentioned material, please contact at the address given below:


The Deputy Registrar
Mailing Section, Services Block
Allama Iqbal Open University
H-8, Islamabad
Phone: 051-9057611-12






Ms. Beenish Ehsan
Course Coordinator


ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD
(Department of Business Administration)

WARNING
1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
2. SUBMITTING ASSIGNMENTS BORROWED OR STOLEN FROM OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN “AIOU PLAGIARISM POLICY”.


ASSIGNMENT No. 1
(Units: 1–4)
Course: Micro Economics (131) Semester: Spring 2014
Level: BBA Total Marks: 100
Pass Marks: 40
Note: Attempt all questions.

Q. 1 Differentiate between positive and normative economics. (20)

Q. 2 Discuss the concept of efficiency and growth in detail. (20)

Q. 3 Describe the law of diminishing marginal utility and law of equi-marginal utility with suitable examples. (20)

Q. 4 What is relationship between elasticity of demand and revenue. (20)

Q. 5 Define indifference curve. Describe the application and uses of indifference curve. (20)

ASSIGNMENT No. 2
(Units: 5–9)
Total Marks: 100 Pass Marks: 40

Note: Attempt all questions.

Q. 1 Write short notes on the following:
i. Sole proprietorship
ii. Returns to scale (10+10)

Q. 2 Explain the derivation of average fixed cost, average variable costs, average total costs and marginal cost curves. (20)

Q. 3 Describe the law of diminishing marginal utility. (20)

Q. 4 Describe the meaning and classification of markets. Also discuss imperfect markets in detail. (20)
Q. 5 Explain the determination of equilibrium wage rate under perfect and imperfect market conditions
(20)

Detailed Course Outlines (BBA–131)
Unit 1: Nature of Economics and Basic Economic Concepts
1.1 Economics: Micro and Macro Economics
1.2 Positive and Normative Economics
1.3 Is Economics Science or an Art?
1.4 Basic Economic Concepts:
1.4.1 Resources and its scarcity
1.4.2 Scarcity and Choice
1.4.3 Opportunity Cost and its uses
1.4.4 Production Possibility Frontier
1.4.5 Law of increasing cost or diminishing return
1.4.6 The concept economic efficiency and growth
Unit 2: Types of Economies
2.1 Command Economy
2.2 Market Economy
2.3 Mixed Economy
2.4 Islamic Economic System
2.5 Prices System and Resource Allocation

Unit 3: The Theory of Demand and Supply
3.1 Utility Analysis
3.2 Consumer Behavior
3.3 Cardinal and Ordinal Utility
3.4 Marginal Utility
3.5 Law of Diminishing Marginal Utility
3.6 Law of Equi-marginal Utility
3.7 Meaning of Demand
3.8 Types of Demand
3.9 Law of Demand
3.10 Limitations of Law of Demand
3.11 Derivation of Individual and Market Demand Curve and the Concept of Consumer Surplus
3.12 Law of Supply
3.13 Derivation of Individual and Market Supply Schedule
3.14 Equilibrium of Supply and Demand Curves

Unit 4: Elasticity of Demand and Supply
4.1 Measurement of the elasticity of demand
4.2 Price elasticity of demand
4.3 Income elasticity of demand and cross-price elasticity of demand
4.4 The determinants of the price elasticity of demand
4.5 Relationship between elasticity of demand and the revenue
4.6 Price elasticity of supply in the short and long run
4.7 The applications of and the uses of elasticity of demand and supply
4.8 Supply and demand analysis and the intervention of the government

Unit 5: Indifference Curve Analysis
5.1 Scale of preferences
5.2 Indifference curves
5.3 Properties of indifference curve
5.4 Marginal rate of substitution
5.5 Budgetary constraint and the determination of consumer equilibrium
5.6 Income substitution, price effects and derivation of demand curve
5.7 Superiority and weaknesses of indifference curve technique
5.8 Applications and uses of indifference curve technique

Unit 6: Forms of Business Organizations
6.1 The nature of the firm
6.2 Sole proprietorship
6.3 Partnership
6.4 Private and public limited companies

Unit 7: Theory of Production
7.1 Production Function
7.2 Total, average and marginal product
7.3 Law of diminishing return
7.4 Returns to scale
7.5 Analysis of costs: Fixed, variable and total costs
7.6 Average fixed, average variable, average total costs and marginal costs
7.7 Relationship between production and costs
7.8 Derivation of average fixed cost, average variable costs, average total costs and marginal cost curves
7.9 Efficient level of production
7.10 Long-run costs: Economies and diseconomies of scale
7.11 Firm demand curve and the market demand curve

Unit 8: Market and Market Structures
8.1 Market: meaning and classification of markets
8.2 Perfect and imperfect markets
8.3 Forms of market structures: perfect competition, monopolistic competition, monopoly and oligopoly
8.4 Conditions for the determination of price and output relationship of the firm in each market in the short run and long-run

Unit 9: Pricing of Factors of Production
9.1 Factor markets
9.2 Factor supply and the concept of marginal factor cost
9.3 Firm demand for factors of production
9.4 Labour, labour supply and demand curve and the equilibrium in the labour market
9.5 Determination of equilibrium wage rate under perfect and imperfect market conditions
9.6 Interest, rent and profit
9.7 Supply of capital
9.8 Interest, credit market, rate of interest
9.9 Rent, pure and economic rent
9.10 Profit: sources of economic profit
9.11 Concept of externalities and the need for government intervention in imperfectly competitive market conditions.

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