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Unit I: INTRODUCTION (11 Periods)
Meaning of microeconomics and macroeconomics.
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 II: CONSUMER EQUILIBRIUM AND DEMAND (34 Periods)
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), preference of the
consumer (indifference curve, indifference map) and conditions of
consumer’s equilibrium.
3 Class XII : Economics
Demand, market demand, determinants of demand, demand schedule,
demand curve, movement along the shifts in the demand curve; price
elasticity of demand–factors affecting price elasticity of demand;
measurement of price elasticity of demand–(a) percentage-change method
and (b) geometric method (linear demand curve); relationship between
price elasticity of demand and total expenditure.
Unit III: PRODUCER BEHAVIOUR AND SUPPLY (34 Periods)
Production function : Total Product, Average Product and Marginal Product.
Returns of a Factor.
Cost and Revenue: Short run costs–total cost, total fixed cost, total variable
cost; Average fixed cost, average variable cost and marginal cost–meaning
and their relationship.
Revenue–total, average and marginal revenue.
Producer’s equilibrium–meaning and its conditions in terms of marginal
revenue-marginal cost.
Supply, market supply, determinants of supply, supply schedule, supply
curve, movement along the shifts in supply curve, price elasticity of supply;
measurement of price elasticity of supply–(a) percentage-change method
and (b) geometric method.
Unit IV: FORMS OF MARKET AND PRICE DETERMINATION UNDER PERFECT
COMPETITION WITH SIMPLE APPLICATIONS (31 Periods)
Perfect Competition–Features; Determination of market equilibrium and
effects of shifts in demand and supply.
Other Market Forms–monopoly, monopolistic competition, oligopoly–their
meaning and features.
Simple Applications of tools of Demand and Supply: Price ceiling, price
floor.
(110 Periods)
Unit V: NATIONAL INCOME AND RELATED AGGREGATES (32 Periods)
Some basic concepts: consumption goods, capital goods, final goods,
intermediate goods; stocks and flows; gross investment and depreciation.
Circular flow of income; Methods of calculating National Income–Value
Added or Product Method, Expenditure Method, Income Method.
Aggregates related to National Income:
Gross National Product (GNP), Net National Product (NNP), Gross and
Net Domestic Product (GDP and NDP)–at market price, at factor cost;
National Disposable Income (gross and net), Private Income, Personal
Income and Personal Disposable Income; Real and Nominal GDP.
GDP and Welfare
Unit VI: MONEY AND BANKING (18 Periods)
Money–its meaning and functions.
Supply of money–Currency held by the public and net demand deposits
held by commercial banks. Money creation by the commercial banking
system.
Central bank and its functions (example of the Reserve Bank of India):
Bank of Issue, Govt. Bank, Banker’s Bank, Controller of Credit through
CRR, SLR, Reverse Repo, Open Market Operations, Margin requirement.
Unit VII: DETERMINATION OF INCOME AND EMPLOYMENT (27 Periods)
Aggregate demand and its components.
Propensity to consumer and propensity to save (average and marginal).
Short-run equilibrium output; investment multiplier and its mechanism.
Meaning of full employment and involuntary unemployment.
Problems of excess demand and deficient demand; measures to correct
them–change in government spending, availability of credit.
Unit VIII: GOVERNMENT BUDGET AND THE ECONOMY (17 Periods)
Government budget–meaning, objectives and components.
Classification of receipts–revenue receipts and capital receipts; classification
of expenditure–revenue expenditure and capital expenditure.
Measures of government deficit-revenue deficit, fiscal deficit, primary deficit
their meaning.
Unit IX: BALANCE OF PAYMENTS (16 Periods)
Balance of payments account–meaning and components; balance of
payments deficit–meaning,
Foreign exchange rate–meaning of fixed and flexible rates and managed
floating. Determination of exchange rate in a free market.