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Mathematical Economics-II
Paper Code:
ECO 613
Credits:
4
Contact Hours:
60.00
Objective:
To understand the economic concepts and theories through mathematical methods so as to refine the verbal logic.
12.00
Unit I:
Review
- Integral Calculus –Integration and its rules, integration by substitution and by parts, Definite Integral and area under a curve. Consumer’s Surplus & Producer’s surplus.
- First-order Difference Equations –Definition, General formula for first-order linear difference equations, stability conditions. The Cobweb Model.
12.00
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
12.00
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;
12.00
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;
12.00
Unit V:
Linear Programming
- Formulation of Problem and its Graphical solution;
- Simplex Method (for maximization only);
- Concept of Primal and Dual.
Essential Readings:
- Henderson, J.M. and R.E. Quandt (1980), Microeconomic Theory: A Mathematical Approach, McGraw Hill, New Delhi.
- Chiang, A. C., Kevin Wainwright, Fundamental Methods of Mathematical Economics (Fourth Edition), McGraw Hill, 2005
References:
- Mehta, B.C. and G.M.K. Madnani, Mathematics for Economists, Sultan Chand & Sons, New Delhi.
- K. Sydsaeter and P. Hammond, Mathematics for Economic Analysis, Pearson Educational Asia, Delhi, 2002.
- Dowling, E. T.(1993), Schaum’s Outline of Theory and Problems of Mathematical Methods for Business And Economics, McGraw Hill.
- Dowling, E. T.(1993), Schaum’s Outline of Theory and Problems of Introduction to Mathematical Economics, McGraw Hill.
- Allen, R.G.D.(1974), Mathematical Analysis for Economists, Macmillan Press , London.
- Yamane, Taro (1975), Mathematics for Economists, Prentice Hall of India, New Delhi.
- Martin J. Osborne, An Introduction to Game Theory, Oxford University Press, New Delhi, 2004.
Academic Session:
