ECONOMICS - I

Course Code: ILB 302 Credit Units: 04

Course Objective: The objective of this paper is to make the student to understand how the business organizations work by

applying economic principles in their business management. The course will attempt to relate theory to practice

and try to instill in students the ability to apply basic microeconomic concepts to the understanding of everyday

phenomena.

Course Contents:

Module I: Nature and Methodology of Economics

Definition, Nature of economics, Micro and Macro economics; Basic economic problems, Economic problems,

Economic laws and Government laws, Dynamic v. Static; Methodology: Inductive v. Deductive methods;

Economics and Law.

Module II: Consumer Behavior and utility analysis

Utility Analysis: law of diminishing marginal utility. Law of equi-marginal utility; Law of demand and supply,

Application of demand and supply: Tax floor and ceiling; Elasticity of demand and supply; Marshallian

Scissors, Consumer’s surplus.

Module III: Theory of Production and Market structure

Factors of Production, Laws of returns, Returns to scale; Forms of entrepreneurial organization; Cost curves and

revenue concepts; Market: Meaning and classifications, equilibrium of the firm and industry; Price and output

determination under perfect, monopoly, monopolistic competitions, oligopoly and duopoly.

Module IV: Factor Pricing

The General Theory of factor pricing; Wage determination, exploitation of labour, role of trade unions,

Minimum Wage Act; Theory of Rent, Quasi rent; Theory of Interest: Classical, Neo Classical and Loanable

Fund Theory, Liquidity Preference Theory; Theory of Profit.

Examination Scheme:

Components P/S/V CT C A EE

Weightage (%) 10 10 5 5 70

Texts & References:

I.C. Dhingra, Principles of Microeconomics- Sultan Chand & Sons

H.L. Ahuja- Microeconomics

Baumol, W.J. Economic Theory and Operations Analysis, Prentice Hall of India, New Delhi.

Bach, G.L, Economics, Prentice Hall of India, New Delhi.

Gould, J.P. and Edward P.L, Microeconomic Theory, Richard, Irwin. Homewood.

Koutsoyiannis, A, Modern Microeconomics, Macmillan.

Lipsey, R.G. and K.A. Chrystal, Principles of Economics, Oxford University Press, Oxford.