Department of Humanities and Social Sciences

LNMIIT Jaipur
HSS4161: Applied Economics
Programme: B. Tech. Year: 4th Semester: Odd
Course: Other Elective Credits: 3 Hours: 40

Course Context and Overview: This course has been designed to be an advanced level course
to the core course ‘Economics for Engineers’. The objective of this course is to familiarise
students with mathematical techniques that are required to analytically analyse economic
problems. This would give students the foundation to understand about how markets work,
pricing decisions by firms, their strategic relationships between firms and of course at the macro
level, an understanding of the impacts of fiscal and monetary policies on an economy. This
course is recommended for students planning to apply in future to business schools or graduate
schools in economics.

Prerequisite Courses: Economics for Engineers (EFE); Mathematics I (MI)

Course outcomes (COs):

On completion of this course, the students will have the ability to:
CO1 understand (mathematical) economic theory and quantitative methods required for
analyzing applied micro, as well as, macro economic problems (particularly useful in
managerial decision making)
CO2 grasp the optimal decision of production by a firm
CO3 apply economic reasoning to understand the strategic relationship between firms in a
given market structure
CO4 apprehend the different forms of pricing discrimination that any manufacturing firm
adopts
CO5 comprehend the impact of fiscal and monetary policies on an economy

Course Topics:

Topics Lecture Hours

UNIT – 1: Production and Supply

1.1 Production Functions and its various types; Isoquant Maps; Product 2.5
Exhaustion Theorem, Elasticity of Substitution
1.2 Cost Functions and their properties 2
1.3 Firm’s optimizing behavior [constrained output maximization and 9
2
constrained cost minimization]
1.4 Firm’s output choice: mathematical and graphical analysis; Relation
1.5
between marginal revenue and elasticity
1.5 Profit Function and their properties; Profit maximization and input 1
Department of Humanities and Social Sciences
LNMIIT Jaipur
demand functions
UNIT – 2: [Market Structure] A Firm in Perfectly Competitive Market
2.1 Short run competitive equilibrium of the firm and the derivation of
3 7
supply curve
2.2 Output choice and competitive equilibrium in the long run 2
2.3 Long run industrial supply curve 2
UNIT – 3: [Market Structure] Monopoly
3.1 Barriers to entry; Profit Maximization and Output Choice 1
3.2 Cartel and Multiplant monopoly 1 6
3.3 Price discrimination by a Monopoly: First, Second and Third degree
2
price discrimination
3.4 Regulation and social cost of a monopoly 2
UNIT – 4: [Market Structure] Monopolistic Competition
4
4.1 Equilibrium in the short and along run 2
4.2 Economic efficiency of firm 2

UNIT – 5: [Market Structure] Oligopolistic Competition

5.1 Oligopoly equilibrium as a Nash equilibrium 1.5 8

5.2 Cournot, Bertrand and Stackelberg Competition 3
5.3 Competition versus collusion: An application of Prisoners dilemma
1
game
5.4 Price leadership model; An application to the problem of dumping 2.5
UNIT – 6: Macroeconomic Theory
6.1 The aggregate demand and supply curve 2
6.2 The Simple Keynesian Model: Applications with fiscal policies 1
6
6.3 Derivations of IS-LM curve and equilibrium: Applications of fiscal
2
and monetary policies
6.4 Okun’s law and Philips curve 1

Textbook references:
Pindyck, S. Robert, and Daniel L. Rubinfeld., Microeconomics 8th edition, New Delhi: Pearson,
2017.

Nicholson, Walter, and Christopher Snyder.. Microeconomic Theory: Basic Principles and
Extensions. 12th edition, New Delhi: Cengage, 2017.

N. Gregory Mankiw,. Macroeconomics. 6th edition. New York: Worth Publishers 2009.

Reference books:
Das, P. Satya. 2007. Microeconomics for Business. 1st edition, New Delhi: Sage.

Dornbusch, Rudiger, Stanley Fischer and Richard Startz.. Macroeconomics. New Delhi: Tata
McGraw-Hill 2017.
Department of Humanities and Social Sciences
LNMIIT Jaipur
Henderson, M. James, and Richard E. Quandt. . Microeconomic Theory: A Mathematical
Approach. 3rd edition, New Delhi: Tata McGraw-Hill 2003.

Maddala, G.S., and Ellen Miller. . Microeconomics: Theory and Applications. Indian Edition.
Chennai: McGraw Hill Edition 2004.

Sen, Anindya.. Microeconomics: Theory and Applications. 2nd edition, New Delhi: Oxford
University Press 2007.

Varian, R. Hal.. Intermediate Microeconomics: A Modern Approach. 8th edition, New York:
W. W. Norton & Company 2007.

Additional Resources (NPTEL, MIT Video Lectures, Web resources etc.): NONE

Evaluation Methods:

Evaluation criteria will be shared by the concerned course instructor.

* Above 90% attendance: 5 marks; 80 – 89.99% attendance: 4 marks; 75 – 79.99% attendance: 3 marks;
70 – 74.99% attendance: 2 marks; 65 – 69.99% attendance: 1 marks; below 65% attendance: 0 marks
#
One of the class tests will be unannounced while the other will be announced.

Prepared By: SAGNIK BAGCHI

Last Update: 3rd May, 2019