UNIT I
Introduction to Economics: Nature and Scope of Economics: Micro and Macro Economics.
Types of Economies and Market Structures. Basic problems of an economy; Working of
price mechanism. Utility: Utility approach – brief outline of law of diminishing marginal
utility and law of equi- marginal utility. Indifference curve approach. Properties of
indifference curve. Consumer’s equilibrium and importance of indifference curve approach
UNIT II
Elasticity of Demand: Concept and measurement of elasticity of demand; Price, income and
cross elasticity; Relationship between average revenue, marginal revenue and elasticity of
demand; Determinants of elasticity of demand; Importance of elasticity of demand.
Production Function: Concept of production function; Law of variable proportions; Isoquants;
Producer’s equilibrium. Expansion path; Returns to factor and returns to scale
Theory of Costs: Types of costs, Short-run and long-run cost curves traditional and modern
approaches. Internal and external economies and diseconomies of scale
UNIT III
Introduction: Market structure, types of markets and business decisions; Objectives of a
business firm- optimum firm. Perfect Competition: Characteristics; Price determination
under perfect competition, Equilibrium of firm and industry in the Short-run and long-run.
Monopoly: Characteristics; Equilibrium of the monopoly firm in short run and long run;
Price discrimination, its types and price and output determination under discriminating
monopoly. Monopolistic Competition: Meaning and characteristics; Price and output
determination under monopolistic competition; Selling costs; Comparison with perfect
competition; Excess capacity hypothesis. Oligopoly; Characteristics; Models of pricing and
output determination; Price leadership; Kinked demand curve.
UNIT IV
Factor Pricing: Marginal productivity theory of factor pricing, Classical and modern theory
of wage determination. Rent-concept; Ricardian and modern theories of rent; Quasi-rent.
Interest-Concept and theories of interest; Profit: nature, concepts and theories of profit.