To understand the microeconomic concepts and theories through mathematical methods so as to refine the verbal logic.
12.00
Unit I:
Review
Differential Calculus (Functions with one independent variable)-Increasing and decreasing functions, Concavity and convexity, optimization of functions;
Differential Calculus (Multivariable Functions)-First-and second-order partial derivatives, total differentials, optimization of multivariable functions, constrained optimization with Lagrange multiplier;
Matrix Algebra-Matrices and Determinants, Crammer’s rule, solving linear equations with the inverse matrix, Bordered Hessian determinant for constrained optimization.
12.00
Unit II:
Theory of Consumer Behaviour-I
Nature of the utility function, Indifference curves, Rate of commodity substitution;
Maximization of Utility (First-and second-order conditions);
Ordinary and Compensated Demand Functions.
12.00
Unit III:
Theory of Consumer Behaviour-II
Price and Income Elasticity of demand;
Income and Leisure;
The Slutsky Equation- Derivation for two commodity case, its elasticity form, Direct and Cross effects, Substitutes and Complements.
12.00
Unit IV:
Theory of Firm-I
(All the concepts covered under unit IV and unit V shall be illustrated with the help of Cobb-Douglas production function only).
Nature of the production function, isoquants and isocost line;