1. Semester: I
2. Number of Credits: 4

This is a one-semester course taught over 48 one-hour sessions. The course is divided into 4 modules of 12 sessions each. The method of instruction will be exclusively lectures. The objective is to introduce students to modern microeconomics in a gradual fashion, leading up to Microeconomics 2, which will be offered in the second semester. Microeconomics 1 will cover the traditional approaches to microeconomics, assuming complete markets, nonstrategic, utility- maximising individuals, as well as profit-maximising firms in a competitive market setup with symmetric, perfect and complete information.
Prerequisites: Undergraduate level microeconomics, mathematical prerequisites course offered in semester 1.
Special Note: The teaching of Microeconomics 1 will start after the mathematical prerequisites course has been covered.

Module 1: Consumer Behaviour
Rational choice and revealed preference, existence of the utility function, consumer’s problem and the demand function, income-compensated demand functions, Slutsky matrix, expenditure and indirect utility functions and their properties, duality, measuring the welfare effects of a price change

Module 2: Theory of the Firm
Production: returns to scale and varying proportions, production functions (Cobb Douglas, CES and Translog) and measurement of efficiency, input demand functions and their properties, cost, duality in production, profit function and its properties

Module 3: The Competitive Firm (partial equilibrium)
Excess demand function and existence of equilibria, stability, modeling of expectations,  derivation of long run and short run supply curves, classical model of the equilibrium of the firm, optimal size of the firm, criticism of the classical model

Module 4: Perfect Competition, Walrasian General Equilibrium in a Pure Exchange Economy
Excess demand function and its properties, tâtonnement process and the proof of existence of general equilibrium (using Brouwer’s fixed point theorem), core and equilibria, the first and the second fundamental theorem of welfare economics, market failures and externalities, second best theorem.