3 Hours/Week, 3 Credits

Attributes of consumer behavior: Engel curves and lognormal demand curves. Maximization of utility, demand function, price, income and cross elasticities of demand. Preference theory of demand. Distribution of personal income: empirical distribution, Pareto’s law, Lorenz curve, concentration ratio, the lognormal distribution, stochastic model of income distribution. Time series: general ideas, decomposition, trend, seasonality. Different methods of finding trend and seasonality. Index number: problems in construction of index numbers, purpose of the index, price index, quantity index, value index, tests of index numbers, cost of living index, family budget method. Theory of production: production function, concepts of average productivity, marginal productivity, marginal rate of technical substitution, efficiency of production, factor intensity, returns to scale and homogeneity of production function, production possibility curve, cost function, minimizing cost for a given level of output, maximization of profit subject to constraint cost, maximization of profit for a given output, Cobb-Douglas production function, constant elasticity of substitution (CES) production function. Stochastic frontier model. Dynamic economics: Cobweb model, Harrod-Domar model of economic growth, natural and non-natural technical change, two sector growth models. Input output analysis: meaning of input output, main features of input output, assumptions, Leontiefs static and dynamic model, limitations, importance and application of the analysis.