Unit 4: Introduction
Meaning of microeconomics and macroeconomics; positive and normative economics What is an economy? Central problems of an economy: what, how and for whom to produce; concepts of Production Possibility Frontier and Opportunity Cost.
Unit 5:
Consumer's Equilibrium
and Demand
Consumer's equilibrium - meaning of Utility, Marginal Utility, Law of Diminishing Marginal Utility, conditions of consumer's equilibrium using marginal utility analysis. Indifference curve analysis of consumer's equilibrium-the consumer's budget (budget set and budget line), preferences of the consumer (indifference curve, indifference map) and conditions of consumer's equilibrium. Demand, market demand, determinants of demand, demand schedule, demand curve and its slope, movement along and shifts in the demand curve; price elasticity of demand - factors affecting price elasticity of demand; measurement of price elasticity of demand тАУ percentage-change method and total expenditure method.
Unit 6: Producer Behaviour and Supply
Meaning of Production Function тАУ Short-Run and Long-Run Total Product, Average Product and Marginal Product. Returns to a Factor Cost тАУ Short run costs - Total Cost, Total Fixed Cost, Total Variable Cost; Average Cost; Average Fixed Cost, Average Variable Cost and Marginal Cost - meaning and their relationships. Revenue тАУ Total Revenue, Average Revenue and Marginal Revenue - meaning and their relationship. Producer's Equilibrium - meaning and its conditions in terms of Marginal RevenueMarginal Cost. Supply, market supply, determinants of supply, supply schedule, supply curve and its slope, movements along and shifts in supply curve, price elasticity of supply; measurement of price elasticity of supply - percentage-change method.
Unit 7:
Perfect Competition -
Price Determination
and simple applications
Perfect competition - Features; Determination of market equilibrium and effects of shifts in demand and supply. (Short Run Only) Simple Applications of Demand and Supply: Price ceiling, Price floor.