CW3301 FUNDAMENTALS OF ECONOMICS Anna University Syllabus R2021
CW3301 FUNDAMENTALS OF ECONOMICS L T P C3003
COURSE OBJECTIVES:
- To exemplify the demand curves of households and supply curves of firms with the
principles.
- To differentiate Price ceilings, Price floors and compare income effects, substitute effects
- To Analyze the Keynesian's process of multiplier theory in macro economics
UNIT I INTRODUCTION TO MICRO ECONOMICS 9
Introduction to Economics – Themes of Economics – Micro Vs Macro Economics- Demand curves
and supply curves- Elasticity of Demand - Elasticity of Supply- Demand Curves of Households and
firms
UNIT II WELFARE ANALYSIS 9
Consumers and Producers Surplus- Price Ceilings and Price Floors; Consumer Behavior - Axioms
of Choice-Budget Constraints and Indifference Curves; Consumers Equilibrium Effects of a Price
Change, Income and Substitution Effects Derivation of a Demand Curve
UNIT III PRODUCTION AND COST FUNCTION 9
Theory of Production - Production Function and Isoquants - Cost Minimization; Cost Curves - Total,
Average and Marginal Costs - Long Run and Short Run Costs; Equilibrium of a Firm under Perfect
Competition; Monopoly and Monopolistic Competition
UNIT IV MACRO ECONOMICS 9
National Income and its Components - GNP, NNP, GDP, NDP Consumption Function; Investment;
Simple Keynesian Model of Income Determination and the Keynesian Multiplier; Government Sector
-Taxes and Subsidies; External Sector - Exports and Imports; Money -Definitions; Demand for
Money Transaction and Speculative Demand; Supply of Money - Banks Credit Creation Multiplier;
Integrating Money and Commodity Markets - IS, LM Model
UNIT V BUSINESS CYCLES AND STABILIZATION 9
Monetary and Fiscal Policy - Central Bank and the Government; the Classical Paradigm - Price and
Wage Rigidities - Voluntary and Involuntary Unemployment.
COURSE OUTCOMES:
CO1: To analyze the supporting of price, income and substitution effects in the consumers and
producers surplus.
CO2: To compare the equilibrium of a firm under perfect competition, monopoly and monopolistic
competition.
CO3 : To study the concepts of demand for money and supply of money with appropriate model in
macro economic analysis.
CO4: To examine and evaluate the problems of voluntary and involuntary unemployment
TOTAL:45 PERIODS
TEXT BOOKS:
1. Paul Anthony Samuelson, William D. Nordhaus, Economics, Nineteenth Edition, McGraw-Hill
Education, 2010.
2. N. Gregory Mankiw, Principles of Macroeconomics, Seventh Edition, Cengage Learning,
2018.
3. Pindyck, Robert S and Daniel L. Rubinfeld , Micro Economics, Eighth Edition, 2013.
REFERENCES
1. Dornbusch, Fischer and Startz, Macroeconomics, Tenth Edition, Tata Mcgraw Hill, 2012.
2. Hal R, Varia, Intermediate Microeconomics: A Modern Approach, Eighth Edition Affiliated
East-West Press, 2006
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