12th Class - Economics

12th Grade - A. Introductory Microeconomics

• – 1. INTRODUCTION 
• 1.1 A Simple Economy 
• 1.2 Central Problems of an Economy 
• 1.3 Organisation of Economic Activities 
• 1.3.1 The Centrally Planned Economy 
• 1.3.2 The Market Economy 
• 1.4 Positive and Normative Economics 
• 1.5 Microeconomics and Macroeconomics 
• 1.6 Plan of the Book 

– 2. THEORY OF CONSUMER BEHAVIOUR 

• 2.1 Utility 
• 2.1.1 Cardinal Utility Analysis 
• 2.1.2 Ordinal Utility Analysis 
• 2.2 The Consumer’s Budget 
• 2.2.1 Budget Set and Budget Line 
• 2.2.2 Changes in the Budget Set 
• 2.3 Optimal Choice of the Consumer 
• 2.4 Demand 
• 2.4.1 Demand Curve and the Law of Demand 
• 2.4.2 Deriving a Demand Curve from Indifference
• Curves and Budget Constraints 
• 2.4.3 Normal and Inferior Goods 
• 2.4.4 Substitutes and Complements 
• 2.4.5 Shifts in the Demand Curve 
• 2.4.6 Movements along the Demand Curve and Shifts in the Demand Curve
• 2.5 Market Demand 
• 2.6 Elasticity of Demand 
• 2.6.1 Elasticity along a Linear Demand Curve 
• 2.6.2 Factors Determining Price Elasticity of Demand for a Good 
• 2.6.3 Elasticity and Expenditure 

– 3. PRODUCTION AND COSTS 

• 3.1 Production Function 
• 3.2 The Short Run and the Long Run 
• 3.3 Total Product, Average Product, and Marginal Product 
• 3.3.1 Total Product 
• 3.3.2 Average Product 
• 3.3.3 Marginal Product 
• 3.4 The Law of Diminishing Marginal Product and the Law of Variable Proportions
• 3.5 Shapes of Total Product, Marginal Product, and Average Product Curves 
• 3.6 Returns to Scale 
• 3.7 Costs 
• 3.7.1 Short-Run Costs 
• 3.7.2 Long-Run Costs 

– 4. THE THEORY OF THE FIRM UNDER PERFECT COMPETITION 

• 4.1 Perfect competition: Defining Features 
• 4.2 Revenue 
• 4.3 Profit Maximisation 
• 4.3.1 Condition 1
• 4.3.2 Condition 2 
• 4.3.3 Condition 3 
• 4.3.4 The Profit Maximisation Problem: Graphical Representation 
• 4.4 Supply Curve of a Firm 
• 4.4.1 Short-Run Supply Curve of a Firm 
• 4.4.2 Long-Run Supply Curve of a Firm 
• 4.4.3 The Shut Down Point 
• 4.4.4 The Normal Profit and Break-even Point 
• 4.5 Determinants of a Firm’s Supply Curve 
• 4.5.1 Technological Progress 
• 4.5.2 Input Prices 
• 4.6 Market Supply Curve 
• 4.7 Price Elasticity of Supply 

– 5. MARKET EQUILIBRIUM 

• 5.1 Equilibrium, Excess Demand, Excess Supply 
• 5.1.1 Market Equilibrium: Fixed Number of Firms 
• 5.1.2 Market Equilibrium: Free Entry and Exit 
• 5.2 Applications 
• 5.2.1 Price Ceiling
• 5.2.2 Price Floor 

– 6. NON-COMPETITIVE MARKETS 

• 6.1 Simple Monopoly in the Commodity Market 
• 6.1.1 Market Demand Curve is the Average Revenue Curve 
• 6.1.2 Total, Average and Marginal Revenues 
• 6.1.3 Marginal Revenue and Price Elasticity of Demand 
• 6.1.4 Short-Run Equilibrium of the Monopoly Firm 
• 6.2 Other Non-perfectly Competitive Markets 
• 6.2.1 Monopolistic Competition 
• 6.2.2 How do Firms behave in Oligopoly? 

12th Grade - B. Introductory Macroeconomics

–1. INTRODUCTION 

• 1.1 Emergence of Macroeconomics 
• 1.2 Context of the Present Book of Macroeconomics

–2. NATIONAL INCOME ACCOUNTING 

• 2.1 Some Basic Concepts of Macroeconomics 
• 2.2 Circular Flow of Income and Methods of Calculating National Income 
• 2.2.1 The Product or Value Added Method 
• 2.2.2 Expenditure Method 
• 2.2.3 Income Method 
• 2.2.4 Factor Cost, Basic Prices and Market Prices 
• 2.3 Some Macroeconomic Identities 
• 2.4 Nominal and Real GDP 
• 2.5 GDP and Welfare 

–3. MONEY AND BANKING 

• 3.1 Functions of Money 
• 3.2 Demand for Money and Supply of Money 
• 3.2.1 Demand for Money 
• 3.2.2 Supply of Money
• 3.3 Money Creation by Banking System 
• 3.3.1 Balance Sheet of a Fictional Bank 
• 3.3.2 Limits to Credit Creation and Money Multiplier 
• 3.4 Policy Tools to Control Money Supply 

–4. DETERMINATION OF INCOME AND EMPLOYMENT 

• 4.1 Aggregate Demand and its Components 
• 4.1.1 Consumption 
• 4.1.2 Investment 
• 4.2 Determination of Income in Two-sector Model 
• 4.3 Determination of Equilibrium Income in the Short Run 
• 4.3.1 Macroeconomic equilibrium with price level fixed 
• 4.3.2 Effect of an autonomous change in aggregate demand on income and output 
• 4.3.3 The Multiplier Mechanism 
• 4.4 Some More Concepts 

–5. GOVERNMENT BUDGET AND THE ECONOMY 

• 5.1 Government Budget – Meaning and its Components 
• 5.1.1 Objectives of Government Budget 
• 5.1.2 Classification of Receipts 
• 5.1.3 Classification of Expenditure 
• 5.2 Balanced, Surplus and Deficit Budget 
• 5.2.1 Measures of Government Deficit 

–6. OPEN ECONOMY MACROECONOMICS 

• 6.1 The Balance of Payments 
• 6.1.1 Current Account 
• 6.1.2 Capital Account 
• 6.1.3 Balance of Payments Surplus and Deficit 
• 6.2 The Foreign Exchange Market 
• 6.2.1 Foreign Exchange Rate 
• 6.2.2 Determination of the Exchange Rate 
• 6.2.3 Merits and Demerits of Flexible and Fixed Exchange Rate Systems 95
• 6.2.4 Managed Floating