To acquaint the students with the methodology and approach of Microeconomics; and to understand the behaviour of an economic agent, namely a consumer and a producer in a comparative static and partial equilibrium framework.
9.00
Unit I:
Cardinal Utility Analysis
Total and Marginal utility;
Law of diminishing marginal utility;
Consumer’s equilibrium – law of equi-marginal utility.
9.00
Unit II:
Ordinal Utility Analysis
Indifference curves;
Budget line;
Consumer’s equilibrium.
9.00
Unit III:
Topics on Consumer Behaviour
Price, substitution and income effect: Normal, Inferior and Giffen Goods (Hicksian Approach);
Engel’s Curve;
Elasticity of demand: Price, Income and Cross – meaning & measurement;
Consumer’s surplus – Marshallian Concept.
9.00
Unit IV:
Theory of Production I
Short Run production Function
Total, average and marginal product curves; interrelationships
Law of returns to variable factor
Stages of Production and Rational production decision
9.00
Unit V:
Theory of Production II
Long Run production Function
Isoquants ,Iso-cost and Producer’s equilibrium;
Expansion Path and Ridge Lines;
Law of Returns to scale
Essential Readings:
H.L. Ahuja, Micro Economic Theory, S. Chand & Company, New Delhi.