Micro Economics – BBA
The aim of this course is to teach economical analysis at micro level and presenting this analysis in an Islamic framework with inspirations from Islamic ideologies. In preparing the table of contents for this course, we have tried to create a logical relation between practical economical analysis and Islamic values and insights.
Introducing Islamic ideology – Definition of economic school of thought – Definition of Economics- Islamic Ideology and its effects on economic behaviors- examples from believers’ economic behaviors from Holy Quran and traditions- Economic goals in an Islamic society- representing Economics as one of the subjects in social science- Relationships of economics with other sciences- the role of economist in a society- definition of Micro and Macro Economics.
Chapter 1: Economic Issues
Production facilities diagram- Presenting main questions in Economics
- What goods to produce?
- How to produce goods?
- How to distribute produced goods?
The use of production facilities curve to answer above questions- Islamic advices in terms of prioritizing society’s interests over individual’s interests and the importance of the family in Islam regarding to the above questions
Economic right (ownership right) and economic activities in public and private sectors of the society, ownership in Islam, different types of ownership in Islam (private, public), ownership limits and the governing rules and regulations over the use of ownership right- economic units (consumers, producer, legal and real economic units) – economic activities between public and private sectors- market and treasury and their role in relation to main questions in Economics
Definition of demand- individual demand curve for a product- Islamic rules in product choice- factors affecting demand- shift in demand curve- Ban on prodigality and waste in Islam- Moslems inspiration for production- Production of Goods and services-definition of supply- supply curve- factors affecting supply- shift in supply curve- definition of market in capitalism economy in Islam- Market equilibrium- buyers and sellers authorities in breaching a contract- Number of choices in order to keep the market health (Fraud, condition, sight, hypocrisy)- market role in answering the main questions
Desirability and Indifference curve
Product definition in capitalism system and Islam- the concept of desirability – God’s consent is believer’s desire – Total desirability and extreme desirability- the principle of decreasing nature of extreme desirability in the capitalism and Islamic system- indifference curve- final rate of substitution – consumer income and budget line- consumer equilibrium – The relation between supply curve and desirability.
Productive organizations and different production methods
Definition of good deed and creation of economic value in Islam- definition of productive and service work in capitalism and Islam- Different ways of producing with the use of religious contracts:
2- contract of farm letting
4-letting a farm for part of the produce
5- Other acceptable methods
Definition of production function- the law of decreasing return- total production curve- average production and final production- ultimate technology- technology and factors of production –identical production curve and production level- characteristics of identical production curve
Definitions of different types of cost- long- term costs- short-term costs- total cost curve, average and final cost curves- fixed and variable costs curves – the relation of final cost with average and average variable cost- the relation of cost with decreasing return law- the relation between cost and long term production scale. Break-even point- effective combination of factors of production
Factors of production
Pricing of factors of production – The value of final production and demand for factors of production-share of human resource in production as wage or part of profit- rent of land- rent of equipment and internal rate of return- profit from management application- the concept of installment and share of each factor of production