Principles of Economics - I

Unit I — INTRODUCTION TO ECONOMICS

Meaning. Nature and Scope of Economics, Basic concepts of Economies: Role of Assumptions. · Basic economics Problems and Economic organization - market. command and mixed economy · History of Economic Thoughts · Linkages between Law and Economics

• The Nature and Significance of economic science and its relevance to law, Difference between Micro and Macro Economics, Positive economics and Normative economics

Unit II — THEORY OF DEMAND AND SUPPLY

Utility analysis- Cardinal approach: Law of Diminishing Marginal Utility and Law of Equi-Marginal Utility, Consumer's Equilibrium using Utility Analysis · Ordinal approach: Indifference curve analysis, Budget Line and Budget Set, Consumer's equilibrium. · Price Effect, Income Effect, Substitution Effect. Consumer's Surplus · Demand for a product, Individual demand, market demand, Determinants of demand Movement along the demand curve and shift in demand curve · Demand & Supply Analysis- Elasticity of Demand & Supply; Determinants of Demand & Supply

Unit III — THEORY OF PRODUCTION AND COST ANALYSIS

Production function: Short run and Long Run, Law of variable proportions · Iso-quants and Iso Cost Line, Optimum factor combination: Least Cost Combination and Maximisation of Output, Expansion path, Returns to scale, Producer's equilibrium · Theory of cost in short run and long run, Economies of Scale and Diseconomies of Scale · Revenue function: Total Revenue, Average Revenue and Marginal Revenue

Unit IV — PRICE AND OUTPUT DETERMINATION IN VARIOUS MARKET STRUCTURES

Market Structures and A general analysis of itsnature, objectives and equilibrium · Perfect competition- short run and long run equilibrium of the firm and industry, price and output determination · Monopoly- short run and long run equilibrium, price and output determination, welfare aspects, monopoly control and regulation · Monopolistic competition- short run and long run equilibrium, price and output determination, excess capacity under monopolistic and imperfect competition, criticism of monopolistic competition. · Oligopoly- Collusive and Non -collusive

Unit V — MACROECONOMICS

Introduction to National Income, Basic Concepts, Concepts of GDP, GNP, NDP and NNP at market price and factor cost; Private Income, Personal Income and Disposable personal Income; Real versus Nominal GDP, GDP Deflator · National Income Accounting (Income, expenditure, product and Value-added approaches),Difficulties of Estimating National Income · ClassicalAssumptions, Say's Law of Market, Classical theory of employment, output, prices and interest, Limitations of Classical Theories. · Keynesian theory of employment: Determination of effective demand, Aggregate Demand and Supply, equilibrium aggregate output, Comparison and contrast between Classical and Keynesian contribution · Short run and Long run consumption functions, APC, MPC, APS, MPS and Investment Function, Types of Investment, Factors determining Investment, Investment Multiplier · Function Fiscal and Monetary Policies, Concept of Inflation

• National Income and its measurement (GDP, NDP, GNP, NNP, PCI, GVA, Green GDP)

Unit VI — MARKET FAILURE AND SOCIAL WELFARE

Role and Functions of Govt.:Allocation, Distribution and Stabilisation · Functions of Govt, Private goods, Public goods, Club good. · Externalities and Merit Goods. Allocation of resources, provision of public goods. · Markets with asymmetric information – adverse selection and moral hazards