Principles of Economics

1. The Nature and Scope of Economics
Introduction; Wealth and Welfare Definitions; Scarcity Definition of Robbins; Scope
of Economics; Exercises.
2. Some Basic Concepts
Introduction; Goods; Utility, Value; Value and Price; Wealth; Stocks and Flows;
Exercises.
3. Methods, Law, and Assumptions of Economics
Methods of Scientific Study; Deduction and Induction; Nature, of Economic Laws;
Assumption of Economics; Exercises.
4. Micro-and-Macroeconomics and Economic Statics and Dynamics
Introduction; Microeconomics; Types of Microeconomics; Macroeconomics; Types
of Macroeconomics; Comparative Statics; Difference between Microeconomics
and Macroeconomics; Importance of Economic Statics; Limitations of Economic
Statics; Importance of Economic Dynamics; Limitations of Economic Dynamics; A
Note on the Stationary State; Exercises.
5. Economy-Its Basic Problems
What is an Economy; The Vital Processes of an Economy; Central Problems of an
Economy; Five Fundamental Questions; Society’s Production Possibilities or
Production Possibility Curve; Exercises.
6. Economic Systems
Meaning; Capitalism or Free Enterprise Economy; Socialism; Mixed Economy;
Exercises.
7. The Role of Price Mechanism
The Role of Price Mechanism in a Free Market Economy or Capitalism; Price
Mechanism in a Socialist or Controlled Economy; Price Mechanism in a Mixed
Economy; Exercises.
PART TWO
Consumption Theory
8. Consumption and Human Wants
Meaning of Consumption; Importance of Consumption; Human Wants;
Characteristics of Human Wants; Exception to the Characteristics of Wants;
Classification of Wants; Classification of Wants is Relative; Is Consumption of
Luxuries Justified; Exercises.
9. The Neo-Classical Utility Analysis
Introduction; Assumptions of Utility Analysis; Total Utility Vs Marginal Utility;
The Law of Diminishing Marginal Utility; The Proportionality Rule; Exercises.
10. Demand And Law of Demand
Meaning of Demand; Factors Influencing Demand; An Individual’s Demand
Schedule and Curve; The Market Demand Schedule and Curve; Changes in Demand;
The Law of Demand; Income Demand; Cross Demand; Short-Run and Long-Run
Demand Curves; Defects of Utility Analysis or Demand Theory; Exercises.
11. The Elasticity of Demand
Introduction; Price Elasticity of Demand; Elasticity and Slope of the Demand Curve;
Cross Elasticity of Demand; Income Elasticity of Demand; Factors Affecting Price
Elasticity of Demand; Importance of the Concept of Price Elasticity; Exercises.
12. The Indifference Curve Theory
Introduction; Indifference Curves; Assumptions of the Indifference Curve Analysis;
Properties of Indifference Curves; Marginal Rate of Substitution (MRS); Consumer’s
Equilibrium; Income Effect; The Substitution Effect; The Price Effect; The
Substitution and Income Effects of the Price Effect; To Derive Demand Curves from
Price-Consumption Curves; Substitutes and Complements j in Indifference Curve
Analysis; Uses or Application of Indifference Curve Analysis; Superiority of
Indifference Curve Technique Over Utility Analysis; Criticisms of Indifference Curve
Analysis; Exercises.
13. The Concept of Consumer’s Surplus
Statement of the Concept; Consumer’s Surplus in Terms of Indifference Curve
Analysis; Criticisms of Consumer’s Surplus; Practical Usefulness of the Concept;
Exercises.
14. The Revealed Preference Theory of Demand
Introduction; Choice Reveals Preference; The Law of Demand; Superiority of
Revealed Preference Theory; Defects of the Revealed Preference Theory; Exercises.
PART THREE
Production Theory
15. Factors of Production
Classification of Factors of Production; Criticisms; Importance; Exercises.
16. Characteristics of Land and Labour
Meaning of Land; Characteristics of Land; Factors Affecting Productivity of Land;
Extensive and Intensive Cultivation; Meaning of
17. Theories of Population
The Malthusian Theory of Population; The Optimum Theory of Population; Theory
of Demographic Transition; Exercises.
18. Division of Labour and Machinery
Meaning; Forms of Division of Labour; Merits and Demerits of Division of Labour;
Division of Labour and Extent of Market; Economic Effects of Machinery; Exercises.
19. Capital and Capital Formation
Meaning of Capital; Characteristics of Capital; Meaning of Capital; Process of
Capital Formation; Capital Formation in a Socialist Economy; Exercises.
20. Localisation of Industries
Meaning; Causes of Localisation; Exercises.
21. Scale of Production
Meaning; Economies of Large Scale Production; Diseconomies of Large Scale
Production; Advantages and Disadvantages of Large Scale Production; Advantages
and Disadvantages of Small Scale Production; Causes of Survival of Small Industries;
Exercises.
22. Organisation
Meaning; Difference between Organisation and Enterprise; Difference between
Capitalist and Entrepreneur; Functions of Entrepreneur; Exercises.
23. Laws of Returns : The Traditional Approach
Introduction; The Production Function; The Law of Variable Proportions; The Law
of Returns to Scale; Exercises.
24. Laws of Returns: The Isoquant-lsocost Approach
Isoquant- Isocost Curves; The Principle of Marginal Rate of Technical Substitution;
The Law of Variable Proportions; The Law of Returns to Scale; Relation Between
Returns to Scale and Returns to a Factor (Law of Returns to Scale and Law of
Diminishing Returns); Choice of Optimal Factor Combination or Least Cost;
Exercises.
PART FOUR
Product Pricing
25. The Nature of Costs and Cost Curves
Accounting and Economic Costs; Production Costs; Real Costs; Opportunity Cost;
Private and Social Costs; Cost Curves in the Short and Long Run; Exercises.
26. The Concept of Revenue
Total, Average and Marginal Revenue; Relation Between AR and MR Curves;
Importance of Revenue Curves; Exercises.
27. Supply-Its Law, Elasticity and Curve
Supply; The Law of Supply; The Elasticity of Supply, The short- Run Supply Curve
of the Firm and Industry; The Long-Run Supply Curveof the Firm and Industry;
Exercises.
28. The Concept of Equilibrium
Meaning of Equilibrium; Static Equilibrium; Dynamic Equilibrium; Stable Vs. Unstable
Equilibrium; Neutral Equilibrium; Partial or Particular Equilibrium; General
Equilibrium; Exercises.
29. Equilibrium of The Firm and Industry Under Perfect Competition
Conditions of Equilibrium of the Firm and Industry, Exercises.
30. Pricing Under Perfect Competition
Perfect Competition; Equilibrium Price; Changes in Demand and Supply; Importance
of Time Element in Price Theory; Comparison Between Market Price and Normal
Price; Exercises.
31. Joint Demand and Supply
Joint Demand; Joint Supply; Exercises.
32. Representative Firm and Optimum Firm
The Representative Firm; The Optimum Firm; Exercises.
33. Monopoly
Meaning; Sources and Types of Monopoly; Monopoly Price Determination;
Monopoly Price Discrimination; Control and Regulation of Monopoly; Comparision
Between Monopoly and Perfect Competition; Exercises.
34. Monopolistic Competition
Meaning; Its Features; Price Determination of a Firm Under Monopolistic
Competition; Theory of Excess Capacity; Selling Costs; Wastes of Monopolistic
Competition; Difference Between Perfect Competition and Monopolistic
Competition; Difference Between Monopoly and Monopolistic Competition;
Exercises.
35. Duopoly and Oligopoly
Meaning of Duopoly; The Cournot Model of Duopoly; Meaning of Oligopoly;
Characteristics of Oligopoly; Price Determination Under Oligopoly; Exercises.
36. Objectives of Business Firm
Introduction; Profit Maximisation; Multiple Objectives; Exercises.
PART FIVE
Factor Pricing
37. National Income : Meaning and Measurement
Introduction; Definitions of National Income; Concept of National Income; Methods
of Measuring National Income; Difficulties or Limitations in Measuring National
Income; Importance of National Income Analysis; Interrelationships Among Different
Concepts of National Income; Some Solved Problems; Exercises.
38. National Income and Economic Welfare
Meaning of Economic Welfare; Relation Between National Income and Economic
Welfare; National Income as a Measure of Economic Welfare; Exercises.
39. Social Accounting
Meaning; Preparation of Social Accounts; Significance of Social Accounting;
Limitations of Social Accounting; Exercises.
40. Inequality of Incomes
Introduction; Causes of Inequality; Effects of Inequality; Measures to Reduce
Inequalities; Measurement of Inequality of Incomes; Lorenz Curve; Exercises.
41. Theories of Distribution
Introduction; Factor Pricing and Product Pricing; The Marginal Productivity Theory
of Distribution; Factor Pricing Under Perfect Competition; Modern Theory; Factors
Pricing Under Imperfect Competition; Exercises.
42. Rent
Meaning; The Ricardian Theory of Rent; Modern Theory of Rent;
Rent and Price; buasi-Rent; Effects of Economic Growth on Rent;
Exercises.
43. Wages
Meaning; Money Wages and Real Wages; Theories of Wages; Union and W
Meaning; Gross and Pure Interest; Variations in Interest Rates; The Time Preference
Theory; The Classical Theory of Interest; The Loanable Funds Theory of Interest;
Its Superiority Over the Classical Theory; Keynes’ Liquidity Preference Theory of
Interest; Its Superiority Over the Loanable Funds Theory; Exercises.
45. Profits
Gross Profit and Net Profit; Nature of Profit; Theories of Profits; Surplus and Normal
Profits; Monopoly Profits; Exercises.
PART SIX
Macroeconomics
46. The Classical Theory of Income, Output and Employment
Introduction; The Classical Theory; Exercises.
47. Say’s Law of Markets
Say’s Law; Propositions and Implications of the Le Say’s Law; Exercises.
48. Principle of Effective Demand : Aggregate Demand and Aggregate Supply
Introduction; Meaning; Importance of Effective Demand; Exercises.
49. Consumption Function
Introduction; Meaning of Consumption Function; Properties or Technical Attributes
of the Consumption Function; Keynes’ Psychological Law of Consumption;
Implications of Keynes’ Law or Importance of the Consumption Function;
Determinants of the Consumption Function; Measures to Raise the Propensity to
Consume; Exercises.
50. The Saving Function
Meaning of Saving Function; Determinants of Savings; The Paradox of Thrift;
Exercises.
51. The Investment Function
Meaning of Investment; Types of Investment; The Marginal Efficiency of Capital
(MEC); The Marginal Efficiency of Investment (MEI); Distinction Between MEC
and MEI; Factors Other than the Interest Rate Affecting Inducement to Invest;
Exercises.
52. Saving and Investment Equality
Introduction; The Classical View; The Keynesian View; Exercises.
53. The Concept of Multiplier
Introduction; Meaning and Derivation of Investment Multiplier; Working of the
Multiplier; Assumptions of Multiplier; Leakages of Multiplier; Criticisms of
Multiplier; Importance of Multiplier; Multiplier in an Underdeveloped Country;
Exercises.
54. The Principle of Acceleration
Meaning of the Acceleration Principle; Operation of the Acceleration Principle;
Assumption of the Acceleration Principle; Criticisms of the Acceleration Principle;
Exercises.
55. Pigou and Wage Flexibility
Introduction; Pigou’s View; Keynes’ Criticisms of Pigou’s View; Exercises.
56. The Keynesian Theory of Income, Output and Employment
Introduction; The Keynesian Theory of Income, Output and Employment; Exercises.
57. IS and LM Frame Work: Simultaneous Determination of Interest Rate and Income Level
Introduction; The IS Curve; The LM Curve; Simultaneous Determination of Interest
Rate and Income Level; Exercises.
58. Unemployment and Full Employment
Introduction; Types of Unemployment; Meaning of Full Employment; Measures to
Achieve and Maintain Full Employment; Exercises.
59. Inflation And Deflation
Meaning of Inflation; Types of Inflation; Demand-Pull Inflation; Cost-Push Inflation;
Causes of Inflation; Effects of Inflation; The Inflationary Gap; Deflation : Control of
Deflation; Exercises.
60. Business Cycles
Meaning; Features of Business Cycles; Phases of Business Cycles; Causes of
Business Cycles; Effects of Business Cycles; Theories of Business Cycles;
Measures to Control Business Cycles or Stabilisation Policies; Exercises.
PART SEVEN
Money and Banking
61. Definition and Functions of Money
Nature and Definition of Money; Theoretical and Empirical Definitions of Money;
Functions of Money; Exercises.
62. Role of Money
Introduction; Significance or Role of Money; Defects of Money; Role of Money In
a Capitalist Economy; Role of Money in a Socialist Economy; Exercises.
63. The Circular Flow of Money
Meaning; Circular Flow of Money Between Household and Business Sectors;
Circular Flow of Money with Saving and Investment; Circular Flow of Money with
Government Sector; Circular Flow of Money with the Foreign Sector; Importance of
the Circular Flow of Money; Exercises.
64. Measurement of Changes in The Value of Money : Index Numbers
Meaning of Index Numbers; Methods of Construction of Index Numbers; Difficulties
In the Construction of Index Numbers; Uses of Index Numbers; Exercises.
65. The Quantity Theory of Money and Its Variants
Meaning of Value of Money; Fisher’s Quantity Theory of Money; The Cash
Transactions Approach; The Cambridge Equation; The Cash Balances Approach;
Transactions Approach Vs. Cash Balances Approach; Superiority of Cash Balances
Approach over Transactions Approach; Exercises.
66. Keynes’ Income and Expenditure Theory
Introduction; Income-Expenditure Approach; Saving-Investment , Approach;
Exercises.
67. the Keynesian Theory of Money and Prices
Introduction; Keynes’ Reformulated Quantity Theory of Money; Superiority of the
Keynesian Theory Over the Traditional Quantity Theory of Money; Criticismsof
Keynes’ Theory of Mopey and Prices; Exercises.
68. Friedman’s Restatement of the Quantity Theory of Money
Introduction; Friedman’s Theory; Friedman Vs Keynes; Exercises.
69. The Supply of Money
Definitions of Money Supply; Determinants of Money Supply; High-powered Money
And The Money Multiplier; Measures of Money Supply in India; Derivation of
Money Multipliers; Exercises.
70. The Demand for Money
Introduction; The Classical Approach; The Keynesian Approach; Liquidity
Preference; Exercises.
71. Commercial Banking
Evolution, Origin and Growth of Banking; Meaning of Bank; Types of Banks;
Functions of Commercial Banks; The Balance Sheet of a Commercial Bank; Role of
Commercial Banks in a Developing Country; Exercises.
72. Commercial Bank Policies and Principles
Introduction; Objectives of Portfolio Management; Theories of
Portfolio Management; Investment Policy of a Commercial Bank; Essentials of a
Sound Banking system; Exercises.
73. Credit Creation By Commercial Banks
Do Banks Create Credit; The Process of Credit Creation; Limitations on the Power
of Banks to Create Credit; Exercises.
74. Central Banking: Functions and Credit Control
Introduction; Difference Between Central Bank and Commercial Bank; Definition of
a Central Bank; Functions of a Central Bank; Central bank as the Controller of
Credit; Role of Central Bank in a Developing Economy; Exercises.
75. Money and Capital Markets
The Money Market; the Capital Market; Distinction Between Money and Capital
Markets; Interrelations Between Money and Capital Markets; Exercises.
76. Monetary Policy
Meaning of Monetary Policy; Objectives or Goals of Monetary Policy;
Instruments of Monetary Policy; Expansionary Monetary Policy; Restrictive
Monetary Policy; Role of Monetary Policy in a Developing Economy; Exercises.
PART EIGHT
International Trade
77. Distinguishing Features of Inter-regional and International Trade
Introduction; Difference betweeen Inter-regional and International Trade; Similarities
between Inter-regional and International Trade; Exercises.
78. The Theory of Comparative Costs
Introduction; Comparative Costs Theory; Its Criticisms; Exercises.
79. The Terms of Trade
Meaning; Commodity; Terms of Trade; Gross Barter Terms of Trade; Income terms
of Trade; Single Factorial Terms of Trade; Double Factorial Terms of Trade; Real
Cost Terms of Trade; Utility Terms of Trade; Factors Affecting Terms of Trade;
Exercises.
80. The Gains from International Trade
Meaning; Factors Determining the Gains from Trade; Gains from Trade and Income
Distribution; Exercises.
81. Free Trade Versus Protection
Free Trade; Protection; Exercises.
82. Tariffs and Other Trade Restrictions
Meaning and Types, Effects of Tariffs, Effects of a Tariff in a Large Country,
Optimum Tariff and Welfare, Effects of a Tariff on Income Distribution; The StoplerSamuelson Theorem, Exercises.
83. Non-Tariff Barriers
Meaning;
84. Import Quotas
Meaning; Objectives of Import Quotas; Types of Import Quotas; Effects of Import
Quotas; Import Quotas vs. Tariffs; Conclusion with Reference to LDCs; Exercises.
85. Balance of Payments
Meaning; Structure of Balance of Payments Accounts; Is Balance of Payments
Always in Equilibrium; Measuring Deficit or Surplus in Balance of Payments;
Balance of Trade and Balance of Payments; Disequilibrium in Balance of Payments.
Exercises.
86. Foreign Exchange Rate
Meaning of Foreign Exchange Rate; Determination of Equilibrium Exchange Rate;
Theories of Foreign Exchange Rate; Causes of Changes in the Exchange Rate;
Exercises
87. Forreign Exchange Rate Policy
Introduction; Flexible Exchange Rate; Exercises.
88. Foreign Trade and Economic Development
Introduction; Importance of Foreign Trade; Exercises.
89. Foreign Aid inEconomic Development
Types of Foreign Aid; Role of Foreign Aid in Economic Development; Tied Vs.
United Aid; Factors Determining the amountof foreign Aid for Economic
Development; Aid or Trade; Exercises.
90. The International Monetary Fund (IMF)
Origin of IMF,Objectives of the Fund, Functions of the Fund, Organisation and
Structure of the Fund, Working of the Fund, Suggestions to reform the IMF, India
and the IMF, The Role of Gold in the IMF, Special Drawing Rights (SDRs), Exercises.
91. The World Bank
Functions, Membership, Organisation, Capital Structure, Funding Strategy, Bank
Borrowings, Bank Lending Activities, Other Activities, Critical Appraisal, India and
the World Bank, Exercises.
92. International Monetary System
Meaning; The Bretton Woods System; The Breakdownof the Bretton Woods
System; The Present International Monetary System; Exercises.
93. Multinational Corporations and LDCs*
Meaning; Merits of MNCs; Demerits of MNCs; An Overview; Exercises.
PART NINTH
Public Finance
94. Meaning, Scope and Importance of Public Finance
Meaning; Nature of Public Finance; Scope of Public Finance; Difference Between
Public and Private Finance; Importance of Public Finance; Exercises.
95. The Principle of Maximum Social Advantage
Meaning; Maximisation of Social Advantage; Limitations of Maximum Social
Advantage Principle; Objective Tests of Social Advantage; Exercises.
96. Taxes
Proportional and Regressive Taxes; Direct and Indirect taxes; Cannons of Taxation;
Exercises.
97. Incidence and Effects of Taxes
Incidence off Commodity Taxes; Effects of Taxation; Exercises.
98. Taxable Capacity
Meaning; Factors Determining Taxable Capacity; Measurement orr Limits of Taxable
Capacity; Exercises.
99. Canons, Effects and Growth of Public Expenditure
Canons of Public Expenditure; Effects of Public Expenditure; Growth of Public
Expenditure; Exercises.
100. Public Debt
Meaning of PUblic Debt; Difference Between Public Debt and Private Debt; Public
Loans Vs Taxes; Types of Public Det; Need for Public Debt; Effects of Public Debt.
Burden of Public Debt; Management of Public Debt; Redemption of Public Debt;
Role of Public Debt in Economic Development; Exercises.
101. Government Budget
Meaning of Government Budget; Purpose of Government Budget; Types of Budgets;
Economic And Functional Classification of Budget; Exercises.
102. Deficit Financing
Meaning; Role of Deficit Financing; Adverse Effects of Deficit Financing; Safe
Limits of Deficit Financing; Exercises.
103. Fiscal Policy
Meaning; Objectives of Fiscal Policy; Fiscal Policy for Economic Growth;
Compensatory Fiscal Policy; Exercises.