To acquaint the students with the behaviour of an economic agent, namely a consumer and a producer in a comparative static and partial equilibrium framework.
Basic Concepts
Basic Economics Problems- Choice and Scarcity; Deductive and Inductive Methods of Analysis; Positive and Normative Economics; Static and Dynamic Analysis; Partial vs. General Equilibrium Analysis;
Demand and Supply
Demand and supply curves; Elasticities of demand and supply; Market Mechanism; Changes in Market Equilibrium; Effects of Government Intervention-Price Controls.
Cardinal Utility Theory; Indifference Curves Theory-Price, Income and Substitution Effects (Normal, Inferior and Giffen goods).
Revealed Preference Hypothesis; Consumer Surplus- Meaning, Marshall’s Measurement of Consumer Surplus, Measurement of Consumer Surplus through indifference Curve Analysis, Critical Evaluation; Consumer behaviour under uncertainty and risk
Production function – short run and long run;
Production with one variable input- Product curves; Production with two variable inputs- Isoquants and Isocost lines; Law of variable proportions and returns to scale; Cobb-Douglas production functions ; Short run and long run cost curves; Economies of scale;
Perfect competition– short run and long run equilibrium of the firm and industry;
Monopoly – short run and long run equilibrium, price discrimination, welfare aspects, monopoly control and regulation