OLD SYLLABUS (ONLY FOR REAPING STUDENTS) SYLLABUS (a) Problem of scarcity and choice; Concept of production possibility curve (excluding section on index numbers). F, Demand and Supply: Determinants of demand, movements vs. shifts in demand curve; Determinants of supply, Movements along a supply curve vs. shifts in supply curve; Market equilibrium and price determination. (c) Elastic of demand and supply. (d) Applications of demand and supply. Topic 2: Consumer Theory Reading: Ch. 6-7 (including appendices) Cardinal Utility Theory: Concept of Utility: marginal utility and total utility: (e) Consumer's equilibrium, Consumer's demand curve; Consumer's surplus; Paradox of value. (b) Ordinal Utility Theory (Indifference curve approach): Consumer's preferences; Indifference curves; Budget line; Consumer's equilibrium; Income and substitution effects; Price consumption curve and the derivation of demand curve for a commodity; Criticisms of the law of demand. Topic 3: Production and Costs Reading: Ch. 8 (including appendix) (a) Production: Firm as an agent of production; Concept of production function; Law of variable proportions; Isoquants; Returns to scale; Economies and Diseconomies of scale. (b) Costs: Costs in the short run; Costs in the long run; Profit maximisation and cost minimization; Equilibrium of the firm; Technical/technological change: the very long run, Topic 4: Market Structures Reading: Ch. 9-11 (a) Theory of Perfect Competition: Assumptions; Theory of a firm under perfect competition; Demand & Revenue; Equilibrium of the firm in the short run and Long run; The long run industry supply curve: increasing, decreasing and constant cost industry. Allocative efficiency under perfect competition. Theory of a Monopoly Firm: Short run and long run equilibrium of a monopoly firm; Concept of supply curve under monopoly; Allocative efficiency and deadweight under monopoly; Price discrimination. () Imperfect Competition: Differences between perfect competition, monopoly and imperfect competition; (1) Theory of monopolistic competition: Assumptions; Short-run equilibrium; Long run equilibrium; Concept of excess capacity; Empirical relevance. (ii) Oligopoly: Causes for the existence of oligopolistic firms in the market rather than perfect competition; Cooperative vs. Non cooperative behaviour and dilemma of oligopolistic firms; Game theoretic models; Long-run behaviour: the importance of entry barriers. Topic 5: Consumer and Producer Theory in Action Reading: Ch. 13 Responses of equilibrium price and quantity to changes in input prices; Changes in technology; Effects of taxation; OPEC: A case study of a cartel; Principal- agent theory; Non-maximizing theories. Topic 6: Income Distribution and Factor Pricing Reading: Ch. 14 Demand for factors; Supply of factors; backward bending supply curve for labour; Concept of economic rent; Functional distribution of income. Topic 7: Market Success and Market Failure Reading: Ch. 18 Basic functions of government; Market efficiency; Market failure: the meaning and causes; Public policy towards monopoly and competition. Topic 8: International Trade Reading: Ch. 34 Gains from trade; Terms of trade; The case for protectionism; Fallacious trade policy arguments; Global commercial policy.