SECOND SEMESTER 2021-22

Course Handout Part II

Dated: 15/01/2022

In addition to part I (General Handout for all courses appended to the time table) this portion gives further
specific details regarding the course.

Course No. : ECON F211

Course Title : PRINCIPLES OF ECONOMICS
Instructor-in-Charge : Dr. Archana Srivastava
Instructors : Dr. Archana Srivastava, Dr. Sudatta Banerjee, Dr. Rishi Kumar,
Dr. Mini Thomas, Dr. Bheemeshwar Reddy, Bincy George , Keerti
Mallela

1. Scope and Objective:

This introductory course aims to cover fundamentals and principles of economics. Economics, as a discipline,
has grown tremendously in recent times. Going by its relevance in understanding day-to-day small issues to
complex policy issues, it would be apt to say that every individuals should be equipped with basic
understanding of economics. It helps greatly in making better decision in every walks of the life. Here we try to
understand the consumption decisions made by the individuals and production decisions made by the firms.
How do these decisions interact and result in a market outcome? How can the policymakers intervene to
improve the outcome? The course aims to provide an insight into production, distribution and consumption of
wealth, analysis of market structure, input pricing and economics of development. The course is designed to
give emphasis on the application of various fundamental concepts of economics on real life examples.

2. Text Book:
th
 Karl E. Case, Ray C. Fair & Sharon M. Oster, “Principles of Economics”, Pearson Education, 12
Edition, 2017
3. Reference Books:
th
 R1: Lipsey, R. G. & K. A. Chrystal , “Economics”, Oxford University Press, 11 Edition, 2007
th
 R2: Samuelson P. A. & Nordhaus W. D., “Economics”, Tata McGraw-Hill, 18 Edition, 2007
th
 R3: N. Gregory Mankiw, “Principles of Economics”, Cengage Learning, 6 Edition, 2012

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4. Course Plan:

Lec. Learning Objective Topic(s) to be covered Chapter in

No. the
Textbook
I Introduction to Economics
1-2 Why study Economics The Scope and method of Chapter 1
Economics
3-5 Understanding the problem of scarcity and choice The Economic Problem: Scarcity & Chapter 2
and the concepts of comparative advantage along Choice
with various economic systems
6-8 Elements of market Economy Demand, Supply and Market Chapter 3
Equilibrium
9-10 Applications of Demand & Supply Price Mechanism and Rationing Chapter 4
11-12 Elasticity Concepts Demand Elasticity, Income Chapter 5
Elasticity
II The Market System
13-16 Marginal Utility & Indifference Theory Household Behavior and Consumer Chapter 6
Choice
17-19 Analysis of Production The Production Process: The Chapter 7
behavior of profit maximizing firms
20-24 Cost Analysis Cost Structure of Firms and output Chapter 8 &
decision 9
25-28 Input pricing: Land, Labor, Capital and Input demand: The labour and land Chapter 10
Investment market, the Capital Market and the & 11
Investment Decision
III Market imperfections and the role of government
29-32 Monopoly Monopoly, Different Forms of Chapter 13
Competitive Structures & 15 (only
table)
33-36 Externalities and Economics of Public Goods Externalities, Public Goods Chapter 16

IV Basic Macro Economics

37-40 Introductory Macroeconomics Basic Concepts of Macro Class Notes
Economics

5. Learning Outcomes:

Module I: Introduction to Economics

It is expected that after completing this module, the student should be able to, recognize economics as the study
of how society addresses the conflict between unlimited desires and scarce resources, describe ways in which
society decides what, how and for whom to produce, identify the opportunity cost of a decision or action,
explain the difference between positive and normative economics, define microeconomics and macroeconomics

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and various sub-fields of economics, explain why theories deliberately simplify reality, explain the difference
between real and nominal variables, build a simple theoretical model, use ‘other things equal’ to ignore, but not
forget, some aspects of a problem in order to focus on core issues, define the concept of a market, draw demand
and supply curves (and inverse demand and supply curves), find equilibrium price and equilibrium quantity,
describe how price adjustment reconciles demand and supply in a market, analyze what shifts demand and
supply curves, describe consumer and producer surplus, analyze excess supply and excess demand, discuss the
consequences of imposing price controls, discuss how markets answer what, how and for whom to produce,
describe the functions of prices (to ration, to allocate), describe how elasticities measure the responsiveness of
demand and supply, define and calculate price elasticity of demand, indicate the determinants of price elasticity,
describe the relationship between demand elasticity and revenue, recognize the various fallacies in economics,
describe how cross-price elasticity relates to complements and substitutes, define and calculate income elasticity
of demand, use income elasticity to identify inferior, normal and luxury goods, define and calculate elasticity of
supply.

Module II: The Market System

It is expected that after completing this module, the student should be able to define the relationship between
utility and tastes for a consumer, describe the concept of diminishing marginal utility, describe the concept of
diminishing marginal rate of substitution and calculate the marginal rate of substitution (MRS), represent tastes
as indifference curves, derive a budget line, explain how indifference curves and budget constraints explain
consumer choice, describe how changes in consumer income affect quantity demanded, describe how a price
change affects quantity demanded, define income and substitution effects, show how the market demand curve
relates to the demand curves of individual consumers, Sketch, and explain the shape of production function and
cost curves, Distinguish between and calculate various concepts of profit, State and explain the profit
maximizing rule and identify profit maximizing behavior graphically and using data, Use graphs to explain the
effect of market level changes on firm level behavior, Understand and analyze different type of markets that a
firm may face.

Module III: Market imperfections and the role of government

It is expected that after completing this module, the student should be able to understand and analyze the effect
the type of market has on efficiency, Define and give examples of price discrimination, and use graphs/data to
show its effect on profit and efficiency, Understand and analyze the effects of market imperfection on efficiency
and consumers, Understand the nuances of income distribution and welfare of the society.

Module IV: Basic Macro Economics and Development

The module will discuss the basic concepts of Macroeconomics along with the national income accounting.

6. Evaluation Scheme:

S.No. Components Duration Weightag Date, Time & Nature of

e (%) Venue Component
1 Mid-Semester Exam 90 Mins 30 14/03 1.30pm OB
to3.00pm
2 3 Quizzes To be 30 TBA CB
[Total 4 quizzes will be announced
held, top 3 scores will be
included for evaluation]
5 Comprehensive Exam 120 Mins 40 13/05 AN CB
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7. Chamber Consultation Hour: To be announced in class

8. Notices shall be displayed on LTC notice board/CMS.

9. Make-up policy: Make-up will be given only on Doctor’s/Warden’s recommendation and with prior (at least
01 day before the test/exam) permission of the Instructor-in-Charge/Instructor. Request for make-up made by
phone/sms or during/after the test/exam would NOT be entertained at all. No make-up shall be granted for
quizzes.

10. Academic Honesty and Integrity Policy: Academic honesty and integrity are to be maintained by all the
students throughout the semester and no type of academic dishonesty is acceptable.

Instructor-in-Charge
ECON C212; ECON F211

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