Principles of Economics

Paper Code: 
ECO 111
Credits: 
3
Contact Hours: 
45.00
Max. Marks: 
100.00
Objective: 

To introduce first-semester students, especially for beginners in an economics course, the basic principles of economic theory. The emphasis will be on how economic concepts can be applied to analyse real-life situations.

9.00
Unit I: 
Introduction
  • Basic Concepts: Microeconomics and macroeconomics, scarcity and choice, questions of what, how and for whom to produce and how to distribute output ; Trade-offs, Opportunity Cost, Margins, Incentives;
  • Role of Markets & Government in Economic Activity;
  • Short-Run Trade-off between inflation and unemployment;
  • Economic Models: Circular flow of Income, Production Possibility Frontier.        
9.00
Unit II: 
Supply and Demand: How Markets Work
  • Market Forces of Supply and Demand;
  • Elasticity and its Applications.
9.00
Unit III: 
Markets and Welfare
  • Consumer’s Surplus; Producer’s Surplus;
  • Market Efficiency & Failure;
  • Application: Cost of Taxation.
9.00
Unit IV: 
Measuring a Nation’s Income
  • Measurement of National Income & its related aggregates;
  • Real V/s Nominal GDP; GDP Deflator;
  • Is GDP a good measure of Economic wellbeing?
9.00
Unit V: 
Aggregate Demand and Aggregate Supply
  • Aggregate Demand Curve – Slope and Shifts;
  • Aggregate Supply Curve – Long Run and Short Run;
  • Stabilization Policy.
Essential Readings: 
  1. N.Gregory Mankiw, Economics:Principles and Applications, India edited by South Western, Cengage Learning india Private Limited, 4th edition, 2007.
  2. Joseph E. Stiglitz  and Carl E. walsh, Economics, W.W. Norton & Company. Inc., New York, International Student Edition, 4th edition, 2007.
  3. Andrew B. Abel and Ben S. Bernanke, Macroeconomics, Pearson Education, Inc., 7th edition, 2011
  4. N.Gregory Mankiw, Macroeconomics, Worth Publishers, 7th edition, 2010.
Academic Session: 
2016-17
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