Overview

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Description

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
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

Unit 3: Producer Behavior and Supply

Production function - Short-Run and Long-Run
Total Product, Average Product and 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, average and 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

Unit 4: Forms of Market and Price Determination

Perfect competition - Features; Determination of market equilibrium and 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

Unit 5: National Income and related aggregates

Some basic concepts: consumption goods, capital goods, final goods, intermediate goods; stocks and flows; gross investment and depreciation
Circular flow of income; Methods of calculating National Income – Value Added or Product method, Expenditure method, Income method
Aggregates related to National Income: Gross National Product (GNP), Net National Product (NNP), Gross and Net Domestic Product (GDP and NDP) - at market price, at factor cost; National Disposable Income (gross and net), Private Income, Personal Income and Personal Disposable Income; Real and Nominal GDP
GDP and Welfare

Unit 6: Money and Banking

Money - its meaning and functions
Supply of money - Currency held by the public and 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 and 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 and components
Classification of receipts - revenue receipts and capital receipts; classification of expenditure - revenue expenditure and capital expenditure
Measures of government deficit - revenue deficit, fiscal deficit, primary deficit their meaning

Unit 9: Balance of Payments