General Principles of Economics
Maharashtra National Law University, Aurangabad · LL.B. Semester 5
Unit I — Introduction to Economics
Meaning and important definitions of economics, Scope of economics: basic economic problems: what, how and for whom to produce, Nature of economics: whether it is a science or arts, ten principles of economics, Microeconomics and Macroeconomics, Positive and Normative economics.
Unit II — Market Forces of Demand and Supply
The concept of demand, its determinant Law of demand, its exception, demand function, the concept of supply, its determinant, Law of supply, supply function, demand and supply taken together: equilibrium.
Unit III — Theory of Consumer Behaviour
Approaches to study consumer behaviour; Cardinal utility approach: Law of diminishing marginal utility, ordinal utility approach: Assumptions, Indifference curve, budget constraint, equilibrium of the consumer, how changes in income and price affect consumer’s equilibrium.
Unit IV — The Cost of Production
What are costs? Production and costs: production function, the various measures of costs, costs in the short-run and in the Long-run.
Unit V — Market Structure
Meaning of market, perfectly competitive market, monopoly monopolistic competition and oligopoly.
Unit VI — GDP as the Measure of Progress
What is GDP?, Growth rate, Nominal vs. Real GDP, GDP deflator, the many ways of splitting GDP, problems with GDP as a measure of output and welfare.
Unit VII — Unemployment
Identifying Unemployment, the causes of Unemployment, the natural rate of unemployment, the Classical theory of employment & output determination The Keynesian theory of output and employment determination.
Unit VIII — International Trade
International Trade – various theories, trade barriers – quantitative and qualitative trade barriers, balance of payment – export and import.