• Nature of the utility function, properties of indifference curves, Rate of commodity substitution;
• Maximization of Utility ;
• Derivation of ordinary and Compensated Demand Functions.

• Price and Income Elasticity of demand; nature of goods
•  Income and Leisure-derivation of labour supply function and its properties ;

• The Slutsky Equation- Derivation for two commodity case, its elasticity form, Direct and Cross effects, Substitutes and Complements.

(All the concepts covered under unit III and unit IV shall be illustrated with the help of Cobb-Douglas production function only).

• Nature of  the production function, isoquants and isocost line;
• Optimizing Behaviour- constrained output maximization, constrained cost minimization and profit maximization;
• Elasticity of substitution.

• Homogeneous Production Functions-Properties, Euler’s theorem, Linearly homogeneous production function as a special case;
• Properties of Cobb-Douglas production Function.

• Perfect Competition:  short run and long run equilibrium, derivation of supply function, effects of taxes,
• Existence and uniqueness of equilibrium, Stability of equilibrium, Static stability, dynamic stability- Lagged adjustment- Cobweb model.