course structure

course syllabus

part a: introductory microeconomics

unit 1: introduction

• meaning of microeconomics and macroeconomics
• what is an economy?
• central problems of an economy: what, how and for whom to produce
• concepts of production possibility frontier and opportunity cost

unit 2: consumer equilibrium and demand

• consumer's equilibrium −

  • meaning of utility

  • marginal utility

  • law of diminishing marginal utility

  • conditions of consumer's equilibrium using marginal utility analysis

• indifference curve analysis of consumer's equilibrium −

  • the consumer's budget (budget set and budget line)

  • preferences of the consumer (indifference curve, indifference map)

  • conditions of consumer's equilibrium

• demand −

  • market demand

  • determinants of demand

  • demand schedule

  • demand curve and its slope

  • movement along and shifts in the demand curve

  • price elasticity of demand - factors affecting price elasticity of demand

  • measurement of price elasticity of demand −

    • percentage-change method

    • geometric method (linear demand curve)

  • relationship between price elasticity of demand and total expenditure

unit 3: producer behaviour and supply

• production function −

  • short-run

  • long-run

• total product −

  • average product

  • marginal product

• returns to a factor

• cost and revenue −

  • short run costs - total cost, total fixed cost, total variable cost

  • average cost; average fixed cost, average variable cost and marginal cost-meaning and their relationship

• revenue −

  • total revenue

  • average revenue

  • marginal revenue - meaning and their relationship

• producer's equilibrium −

  • meaning and its conditions in terms of marginal revenue-marginal cost

• supply −

  • market supply

  • determinants of supply

  • supply schedule

  • supply curve and its slope

  • movements along and shifts in supply curve

  • price elasticity of supply

  • measurement of price elasticity of supply −

    • percentage change method and

    • geometric method

unit 4: forms of market and price determination

• perfect competition −
  • features
  • determination of market equilibrium
  • effects of shifts in demand and supply
• other market forms −
  • monopoly
  • monopolistic competition
  • oligopoly - their meaning and features
• simple applications of demand and supply −
  • price ceiling
  • price floor

part b: introductory macroeconomics

unit 5: national income and related aggregates

• some basic concepts −
  • consumption goods
  • capital goods
  • final goods
  • intermediate goods
  • stocks and flows
  • gross investment
  • depreciation
• circular flow of income −
  • methods of calculating national income −
    • value added or product method
    • expenditure method
    • income method

unit 6: money and banking

• money - its meaning and functions
• supply of money −
  • currency held by the public
  • net demand deposits held by commercial banks
• money creation by the commercial banking system
• central bank and its functions (example of the reserve bank of india) −
  • bank of issue
  • govt. bank
  • banker's bank
  • controller of credit through bank rate
  • crr
  • slr
  • repo rate
  • reverse repo rate
  • open market operations
  • margin requirement

unit 7: determination of income and employment

• aggregate demand and its components

• propensity to consume and propensity to save (average and marginal)

• short–run equilibrium output

  • investment multiplier and its mechanism

• meaning of full employment and involuntary unemployment

• problems of excess demand and deficient demand −

  • measures to correct them - change in government spending, taxes and money supply

unit 8: government budget and the economy

• government budget −
  • meaning
  • objectives
  • components
• classification of receipts −
  • revenue receipts
  • capital receipts
• classification of expenditure −
  • revenue expenditure
  • capital expenditure
• measures of government deficit −
  • revenue deficit
  • fiscal deficit
  • primary deficit

unit 9: balance of payments

• balance of payments account −
  • meaning and components
  • balance of payments deficit-meaning
• foreign exchange rate −
  • meaning of fixed and flexible rates
  • managed floating
• determination of exchange rate in a free market

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