ME (BCOM 1st)

UNIT I

Introduction to Economics: Nature and Scope of Economics: Micro and Macro Economics.

Types of Economies and Market Structures. Basic problems of an economy; Working of

price mechanism. Utility: Utility approach – brief outline of law of diminishing marginal

utility and law of equi- marginal utility. Indifference curve approach. Properties of

indifference curve. Consumer’s equilibrium and importance of indifference curve approach

UNIT II

Elasticity of Demand: Concept and measurement of elasticity of demand; Price, income and

cross elasticity; Relationship between average revenue, marginal revenue and elasticity of

demand; Determinants of elasticity of demand; Importance of elasticity of demand.

Production Function: Concept of production function; Law of variable proportions; Isoquants;

Producer’s equilibrium. Expansion path; Returns to factor and returns to scale

Theory of Costs: Types of costs, Short-run and long-run cost curves traditional and modern

approaches. Internal and external economies and diseconomies of scale

UNIT III

Introduction: Market structure, types of markets and business decisions; Objectives of a

business firm- optimum firm. Perfect Competition: Characteristics; Price determination

under perfect competition, Equilibrium of firm and industry in the Short-run and long-run.

Monopoly: Characteristics; Equilibrium of the monopoly firm in short run and long run;

Price discrimination, its types and price and output determination under discriminating

monopoly. Monopolistic Competition: Meaning and characteristics; Price and output

determination under monopolistic competition; Selling costs; Comparison with perfect

competition; Excess capacity hypothesis. Oligopoly; Characteristics; Models of pricing and

output determination; Price leadership; Kinked demand curve.

UNIT IV

Factor Pricing: Marginal productivity theory of factor pricing, Classical and modern theory

of wage determination. Rent-concept; Ricardian and modern theories of rent; Quasi-rent.

Interest-Concept and theories of interest; Profit: nature, concepts and theories of profit.