Principles of Economics

Contents: Introduction: Definition of Economics, Scope of Economics, Micro and Macro Economics. Circular flow of economic activity. Positive and Normative Economics. Concept of Demand and supply. Determinants of Demand and Supply. Supply and Demand: The elasticity of Demand and Supply, Point elasticity, Arc Elasticity, Cross Price Elasticity. Applications of Elasticity of Demand and Supply. Price control and tax: Role of Government policies in supply demand framework. Price floor, Price Ceiling, Tax and Subsidy. Consumer Surplus, Producer Surplus. Theory of Consumer Behavior: Concept of utility. Total utility, Average Utility and Marginal Utility, Consumer equilibrium with budget constraints, Indifference Curve, Budget Line, Consumer Optimum Choice. Production and Cost of Production: Inputs and Outputs, Factors of Production and Production function, short run and long run analysis of Production. Short run variable and fixed costs: average and marginal costs, long run costs. Economics of Scale. Market Structure - I: Introduction to market structure, Perfect competition, Supply curve, Perfect competition in short run and long run. Market Structure - II: Monopoly, Monopoly equilibrium in short run, Monopolistic competition and Oligopoly, Externalities, Public good and Private good. National income accounting: Measurements of National Income, Gross Domestic Product, Three approaches to measure GDP (Product, Expenditure and Income), National Saving, National Wealth, Real and Nominal GDP, GNP versus GDP. Measuring the Cost of living: Consumer Price Index (CPI), Inflation rate. How to calculate inflation through CPI, GDP deflator. Difference between CPI and GDP Deflator. Labor Market: The demand for labor, the supply of labor, labor market equilibrium. Unemployment: Measuring Unemployment, Frictional and structural unemployment, natural rate of unemployment, Per capita income. Money and interest: Concept of Money, Nominal and interest rate, Functions of Money, The demand for Money, The money supply, Money market equilibrium, Monetary and fiscal policy.