3 Hours/Week, 3 Credits

Introduction: definition and scope of economics; basic concepts and tools used in economics; economic problem – scarcity of resources; economic method – types of economics; microeconomics vs. Macroeconomics; measuring economic variables. Demand, supply and the market: concepts of demand and supply; market equilibrium; laws of demand and supply; shifting demand and supply curves; application of demand and supply; price ceiling and price floor; various elasticities of demand and supply; measurement of elasticity; elasticity and consumer expenditures; application of elasticity concepts. Theory of consumer behavior: utility analysis of demand; paradox of value; law of diminishing marginal utility; law of equi-marginal principle; cardinal vs. Ordinal utility; consumer’s preference – law of preference; indifference curve analysis; properties of indifference curves; different shapes of indifference curves; budget constraints; consumer's equilibrium; derivation of demand curve using indifference curves; complements and substitutes; elementary concepts of income and substitution effects of a price change; consumer and producer surplus, Theory of firm: production and costs - production function; single variable input; total, average and marginal products; law of diminishing marginal returns; stages of production; several variable inputs; law of variable proportions; short run and long run production, and cost concepts with relevant graphical analysis; iso-quant, iso-cost and producers’ equilibrium; returns to scale. Theory of business organization: business firms and the market; why do firms exist; objective(s) of firms; different types of business firms, and their advantages and disadvantages; financing corporate activity, Market: structure of markets; characteristics of different types of markets; perfect competition and monopoly – price and output determination, monopolistic competition.