Mathematical Economics-II

Paper Code: 
ECO 602(A)
Credits: 
3
Contact Hours: 
45.00
Objective: 

To understand the economic concepts and theories through mathematical methods so as to refine the verbal logic.  
 

9.00
Unit I: 
Review

(The purpose of this unit is to review the mathematical techniques. Their    applications in economics shall be discussed in the subsequent units)
•    Integral Calculus –Integration and its rules, integration by substitution and by parts, Definite Integral and area under a curve.
•    First-order Difference Equations –Definition, General formula for first-order linear difference equations, stability conditions. The Cobweb Model.      

9.00
Unit II: 
Price and Output Determination
  • Perfect Competition:  short run and long run equilibrium, Effects of taxes on optimum output level;
  • Monopoly- Profit Maximization and price discrimination;
  • Monopolistic Competition-Equilibrium price and output determination;yn

 

9.00
Unit III: 
Game Theory
  • Introduction-Application in the theory of duopoly and oligopoly;
  • Two-person, Zero-sum Games, Saddle point solution;
  • dominant strategies, Pure and Mixed strategies;
  • Cooperative Games;
  • Nash Equilibrium;
  • Simple Applications.

 

9.00
Unit IV: 
Input-Output Analysis

•    Concept of ‘Open & Closed’, ‘Static & Dynamic’ Model;
•    Determination of gross output in an open model.
•    Hawkins-Simon conditions of viability;
       

9.00
Unit V: 
Linear Programming

•    Formulation of Problem and its Graphical solution;
•    Simplex Method (for maximization only);
•    Concept of Primal and Dual.

Essential Readings: 

1.    Henderson, J.M. and R.E. Quandt (1980), Microeconomic Theory: A Mathematical Approach, McGraw Hill, New Delhi.
2.    Mehta, B.C. and G.M.K. Madnani, Mathematics for Economists, Sultan Chand & Sons, New Delhi.
 

References: 

1.    Chiang, A. C., Kevin Wainwright, Fundamental Methods of Mathematical Economics  ( Edition-4, Illustrated), McGraw Hill, 2005
2.    Chiang, A. C. (1986), Fundamental Methods of Mathematical Economics (3 rd Edition), McGraw Hill, New Delhi
3.    Dowling, E. T. (1993), Schaum’s Outline of Theory and Problems of Mathematical Methods for Business and Economics, McGraw Hill.
4.    Dowling, E. T. (1993), Schaum’s Outline of Theory and Problems of Introduction to Mathematical Economics, McGraw Hill.
5.    Allen, R.G.D. (1974), Mathematical Analysis for Economists, Macmillan Press,    London.
6.    Yamane, Taro (1975), Mathematics for Economists, Prentice Hall of India, New Delhi.
 

Academic Session: 
2018-19
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