INTRODUCTORY ECONOMICS

Paper Code: 
MRD 121
Credits: 
4
Contact Hours: 
60.00
Objective: 

Objectives: To acquaint the students, coming from various streams, with the basic concepts of Economics which are essential for better understanding of issues covered under rural development.

12.00
Unit I: 
Exploring the subject matter of economics

• Basic Economic Problems;
• Production-Possibility frontier;
• Basic assumptions in Economics;
• Positive and Normative Economics;
• Different economic systems – Capitalism, Socialism & Mixed economy.

12.00
Unit II: 
Demand, Supply and Market Equilibrium

• Demand: Individual’s demand for a commodity, law of demand, shift in the individual’s demand curve, market demand;
• Supply: Single producer’s supply of a commodity, shape of the supply curve, shift in the producers supply curve, market supply;
• Market Equilibrium: Determination of equilibrium price and quantity;
• Elasticity: Meaning of elasticity of demand (price, income & cross elasticity of demand).
• Relation between elasticity, AR and MR.

12.00
Unit III: 
The Firm and Market Structures

• Concept of Cost (TC, SAC, SMC) and Revenue (TR, AR, MR);
• Equilibrium of the firm; TR-TC & MR-MC Approach;
• Characteristics of Perfect Competition, Monopoly, Monopolistic Competition, Oligopoly.

12.00
Unit IV: 
Introduction to Macroeconomics

• Key Concepts of Macroeconomics -Stock and flow, ex-ante and ex-post, continuous and period analysis, time series and cross section data analysis ;
• Aggregate Demand & Aggregate Supply - Classical versus Keynesian views;
• Consumption- consumption function , concept of APC and MPC; Keynes’ Psychological law of Consumption;
• Investment- meaning, type and factors affecting investment.

12.00
Unit V: 
National Income

• Circular flow of income;
• National Income-Basic Concepts of National Income aggregates and their interrelationships;
• Difficulties in calculating the National Income;
• National Income and Welfare.

Essential Readings: 

• Salvatore, Dominick and Eugene A. Dulia, Schaum’s Outline of Theory and Problems of Principles of Economics, Tata McGraw-Hill.
• Dewett, K.K., Modern Economic Theory, S. Chand and Company Ltd.
• Fleisher, B.M., Edward J. Ray and Thomas J. Kniesher, Principles of Economics, Wm. C. Brown Publishers, Dubuque, Iowa.
• Samuelson, Paul A. and William D. Nordhaus , Economics, Tata McGraw-Hill.

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