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PIDE School of Economics

PIDE School of Policy, Development and Governance

Economics

Econometrics

Environmental Economics

Economics and Finance

Business Economics

PIDE School of Policy, Development and Governance

Public Policy

Development Studies

Management Sciences

Economics Theory and Practice (DS-710)

Prerequisites For this Course:

None

Text Book(s):

  • Principles of Economics 4th Edition by John Sloman.
  • Varian, H. R. (2016). Intermediate Microeconomics with Calculus: A Modern Approach: Ninth International Student Edition. WW Norton & Company.

Reference Book(s):

None

Course Description

The Course is designed for the MPhil Development Studies program at the PSPDG of PIDE. It is specially tailed keeping in view the fact that we have students from diverse backgrounds and different social sciences. This module of the course deals with basic concepts of Microeconomics such as consumer theory, producer theory and market structure.

In the introductory classes you will be acquainted with these concepts or if you have studied economics earlier, your concepts will be refreshed. Towards the later part of the course we will move to application side of the economics and discuss some topics of relevance to the field of development studies.

Economics is not just a branch of knowledge but a way of thinking and analyzing the world around us. Consumer Behavior is not just limited to the market but to our daily lives where we always face tradeoffs and have to make choice. Economics is the study of the choices we make and that is how it becomes relevant to all forms of policy making and helps us understand development theory and practice

Course Objectives

  • To equip the students with the necessary toolkits of microeconomics analysis
  • To understand how economics shapes and helps guide policy making.
  • To make students able to connect text book economic concepts to real life problems
  • To make foundations for other specialized courses of economics such as Development economics, and public finance 

Learning Outcomes

  • Students will be able to understand the basic concepts of consumer theory, producer theory and market structure.
  • Students will be able to identify and connect these concepts to real life and use them in development research.
  • At the end of the course students will be well acquainted with some of the contemporary issues of Pakistan such as NFC, Trade deficit, structures of different markets and industries in Pakistan

Lecture Plan

Session Topic Readings Activities Instructor
Module 1
1 Overview of economic theory and its relevance to development studies; Basic Math for Economists; Interdisciplinary connections.
  • Required: McEachern, W. A. (2016). Economics: A contemporary introduction. (Chapter 1)
  • Optional: Sloman, J., Economics (5th ed.), Chapters 1-3.
  • Video: “What is economics” by Garett Peterson (YouTube)
Write a short essay (500 words) on the interlinkages of economics, politics, and history. Dr. Fida Muhammad Khan
2 Microeconomic Foundations: Utility and profit maximization; Slutsky Equation; Elasticity concepts. Nicholson, W. (2005). Microeconomic Theory. (Chapter 2) Solve a problem set on utility and profit maximization; analyze a case study on consumer behavior or firm strategy (1000 words). Dr. Fida Muhammad Khan
3 & 4 Microeconomic foundations (Continued) As above As above Dr. Fida Muhammad Khan
5 Market Structures: Types and characteristics; Competition and monopoly theories; Implications for economic policy.
  • Varian, H. S. Intermediate Microeconomic Analysis (Chapters 5, 11, 14).
  • Tirole, J. (1988). The Theory of Industrial Organization.
Case study on a Pakistani industry, identifying its market structure and analyzing policy implications (1500 words). Dr. Fida Muhammad Khan
6 Externalities and Market Failures
  • Stiglitz, J. E. (1989). Economics of the Public Sector.
  • Coase, R. H. (1960). Journal of Law and Economics.
  • World Bank. (2025). Pakistan Country Climate and Development Report.
Propose a policy solution for air pollution in a major Pakistani city, including a cost-benefit analysis (1500 words). Dr. Fida Muhammad Khan
7 & 8 Politicization of Economic Knowledge: Impact of Logical Positivism; Role of economists in policy-making. Zaman, A. (2013). International Journal of Economics, Management and Accounting. Dr. Fida Muhammad Khan
Module 2 (Instructor: Dr. Muhammad Jehangir)
9 Measuring a Nation’s Income:

  • The Measurement and Components of GDP
  • Real versus Nominal GDP
  • Is GDP a Good Measure of Economic Well-Being?
Module readings to be assigned. Dr. Muhammad Jehangir
10 Measuring the Cost of Living:

  • The Consumer Price Index (CPI)
  • Problems in Measuring the Cost of Living
  • GDP Deflator vs. CPI
Module readings to be assigned. Dr. Muhammad Jehangir
11 Unemployment:

  • Measurement, Job Search, Minimum-Wage Laws
  • Unions and Collective Bargaining
  • Aggregate Demand and Supply
Module readings to be assigned. Dr. Muhammad Jehangir
12 Fiscal Policy:

  • Government Budget and Components
  • The Multiplier and Crowding Out Effect
  • Automatic Stabilizers
Module readings to be assigned. Dr. Muhammad Jehangir
13 The Monetary System:

  • Saving, Investment, and the Financial System
  • Banking and Money Creation
  • Monetary Policy
Module readings to be assigned. Dr. Muhammad Jehangir
14 Economic Growth and Productivity:

  • Long-run Economic Growth
  • Productivity and Growth Policy
  • Growth in Macroeconomic Models
Module readings to be assigned. Dr. Muhammad Jehangir
15 & 16 The Open Economy: International Trade and Finance:

  • Capital Flows and the Balance of Payments
  • The Foreign Exchange Market
  • Exchange Rate Policy
Module readings to be assigned. Dr. Muhammad Jehangir