This document outlines the weekly study plan for the Microeconomic Theory-II course being offered in the spring 2009 semester at the University of Gujrat, including the class schedule, instructor information, assessment criteria, course objectives, topics to be covered each week over the 18-week semester, and recommended course materials. The course is designed for senior graduate students to develop their analytical skills in advanced microeconomic concepts and tools.

1. UNIVERSITY OF GUJRAT
Faculty of social sciences
Department of Economics
Weekly Study Plan
Semester: Spring 2009
Course Code: Eco-505
Course Title: Microeconomic Theory-II
Pre-requisite of Course: Eco-501: Microeconomic Theory-I
Program: M.Sc Economics
Class schedule:
Program Day Time Venue
Monday 09:00 – 10:30 Room # A-207
M.Sc-Economics Tuesday 09:00 – 10:30 Room # A-207
Course Instructor:
Tanveer Ahmed Naveed
Room# A-208
Cell: 0300-5506440
E-mail: tanveeranaveed@gmail.com
tanveer.ahmed@uog.edu.pk
www.tanveeruog.synthasite.com
Assessment and evaluation:
Mid term examination (25%)
Class assignments, research projects/assignments, quizzes, problem sets and presentations (25%)
Final examination (at the end of semester) 50%
Objective of the course:
The course is designed to the senior level of graduate students. The objective is to confront them
to advanced theoretical concepts and rigorous analysis with mathematical tools at hand. Students
have to develop the analytical skills and to enhance the capabilities to solve some what
complicated problems.
To find the objective, students may be given frequent assignments, problem sets and exercises
from the text and may be retuned back with comments during the semester.

2. Course Content and Weekly Agenda
Week Weekly Agenda
Theory of Consumption and Demand
Week 1 Preferences and Utility
Axioms of rational choice, utility function, Arguments of utility function, trades and substitutes,
Indifference curve, IC and transitivity, Convexity of IC, Utility and MRS, Cobb-Douglas Utility function,
CES, Homothetic & Non-homothetic preferences, MRS with many goods
Utility Maximization and choice
Week 2 Utility maximization, budget constraint, Corner solution, Lagrange multiplier, Cobb-Douglas demand
function, CES demand,
Indirect Utility function, Lump sum principle, Expenditure minimization, properties of expenditure
Week 3 function,
Income and Substitution Effects
Week 4 Demand functions, Homogeneity, change in income: normal and inferior goods, change in prices: Giffen’s
paradox, Hicksian decomposition,
Relationship between compensated and uncompensated demand curve, Slutsky decomposition, Demand
Week 5 elasticities,
relationship among demand elasticities, Engel aggregation, Cournot aggregation, Consumer Surplus
Week 6
Theory of Production and Supply
Week 7 Production function, marginal physical product, average physical productivity, two input production
function, Isoquant and rate technical substitution, MRTS, returns to scale,
homothetic production function, the elasticity of substitution, simple production functions: Cobb-Douglas,
Week 8 Leontief and CES etc. Technical progress,
Cost Functions
Week 9 Different types of costs, economic profit, cost minimizing input choice, Expansion path
Cost functions: TC, Avg. cost and MC functions, properties of cost functions,
Week 10
Input substitution, SR and LR cost curves,
Week 11
Profit maximization
Week 12 Profit maximization and input demand
General Equilibrium and Welfare Economics
Week 13 The concept of elasticity and welfare, Conditions of allocative efficiency:
consumption, production and product mix, Theorems of optimality/welfare,
Week 14
The efficiency of competitive market structure, Equity and efficiency trade off, Partial vs. general
Week 15 equilibrium,
The pure exchange economy, Two sector economy (consumption and production), Diagrammatic
approach:
The Edgeworth Box, Production possibility frontier and Social indifference curve, Introduction to
Week 16 computation of general equilibrium in a 2x2x2 (two consumers, two sectors/commodities, two factors)
economy.
Week 17 Preparation Week
Week 18 Final Examination

3. Recommended Material
1. Nicholson, W., (9th Edition), Microeconomic Theory: Basic Principles and Extensions, Thomson &
Learning Inc.
2. 1. Koutsoyiannis, A., (Latest Edition/2nd edition), “Modern Microeconomics”, Macmillan,
London.
3. Henderson, J. M., and R. E. Quandt, (1980/3rd Edition), Microeconomic Theory: A Mathematical
Approach, McGraw Hill Internatinal.
4. Silberberg, E., and Suen, W., (2001/3rd Edition), The Structure of Economics: A Mathematical
Analysis, McGraw Hill International.
5. Layard, and Walters, (1978), Microeconomic Theory, McGraw Hill Book Company.
6. Perloff, J., (1999), Microeconomics, Addison Wesley Longman Inc.
7. Pindyck, and Rubinfeld, (2004/6th Edition), Microeconomics, Pearson Education Asia.