Part A
Introductory Microeconomics (33 Marks)
Study of individual economic behavior, consumer choices, production functions, cost-revenue dynamics, and market pricing.
Unit 1: Introduction
What is Economics? Definitions (Wealth, Material Welfare, Scarcity, Growth). Nature & Scope of Economics, Economic Policies, Economic Systems. Positive & Normative Economics. Micro vs Macro Economics: difference & interdependence. Central problems of an economy: what, how and for whom to produce. Production Possibility Curve (PPC), slope, opportunity cost, marginal opportunity cost, shifts and rotations of PPC.
Definitions of Economics
Positive & Normative
Central Problems
PPC & Opportunity Cost
Unit 2: Consumer's Equilibrium & Theory of Demand
Consumer’s equilibrium – meaning, utility types & interrelationship. Law of Diminishing Marginal Utility & Law of Equi-Marginal Utility. Consumer equilibrium using marginal utility analysis (one & two commodities). Theory of Demand: Demand schedule, Demand curve & slope, Law of Demand (assumptions & exceptions), determinants of demand, movements along & shifts in demand curve. Price elasticity of demand: degrees, determinants, percentage method & numericals.
Consumer's Equilibrium
Diminishing Marginal Utility
Law of Demand
Price Elasticity Numericals
Unit 3: Producer Behaviour and Supply
Theory of Production: Production function, Total, Average & Marginal Product. Short run vs Long run, Law of Variable Proportions & Returns to Scale, Economies & Diseconomies of scale. Theory of Cost: Short run costs (TFC, TVC, TC, AC, AFC, AVC, MC) & relationships; Long run cost curves. Theory of Supply: schedule, curve, determinants, shifts, price elasticity of supply. Concepts of Revenue: TR, AR, MR curves. Producer's equilibrium (MR-MC approach, gross & net profits).
Production Function
Variable Proportions
Cost & Revenue Curves
MR-MC Equilibrium
Unit 4: Forms of Market & Price Determination
Forms of Market: Meaning & features. Perfect Competition, Monopoly, and Monopolistic Competition. Price Determination under Perfect Competition through market forces, and effects of demand and supply shifts on equilibrium price and quantity.
Perfect Competition
Monopoly & Monopolistic
Price Determination
Market Equilibrium Shifts
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