The themes of economics – scarcity and efficiency – three fundamental economic problems –society’s capability – Production possibility frontiers (PPF) – Productive efficiency Vs economic efficiency – economic growth & stability – Micro economies and Macro economies – the role of markets and government – Positive Vs negative externalities.
UNIT II CONSUMER AND PRODUCER BEHAVIOUR
Market – Demand and Supply – Determinants – Market equilibrium – elasticity of demand and supply – consumer behaviour – consumer equilibrium – Approaches to consumer behaviour – Production – Short-run and long-run Production Function – Returns to scale – economies Vs diseconomies of scale – Analysis of cost – Short-run and long-run cost function – Relation between Production and cost function.
UNIT III PRODUCT AND FACTOR MARKET
Product market – perfect and imperfect market – different market structures – Firm’s equilibrium and supply – Market efficiency – Economic costs of imperfect competition – factor market – Land, Labour and capital – Demand and supply – determination of factor price – Interaction of product and factor market – General equilibrium and efficiency of competitive markets.
UNIT IV PERFORMANCE OF AN ECONOMY – MACRO ECONOMICS
Macro-economic aggregates – circular flow of macroeconomic activity – National income
determination – Aggregate demand and supply – Macroeconomic equilibrium – Components of aggregate demand and national income – multiplier effect – Demand side management – Fiscal policy in theory.