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IES/ISS: General Economics-I Syllabus

GENERAL ECONOMICS-I

PART A:

1. Theory of Consumer’s Demand: Cardinal utility Analysis; Marginal utility anddemand, Consumer’s surplus, Indifference curve Analysis and utility function, Priceincome and substitution effects, Slutsky theorem and derivation of demand curve,Revealed preference theory. Duality and indirect utility function and expenditurefunction, Choice under risk and uncertainty.

2. Theory of Production: Factors of production and production function. Forms ofProduction Functions: Cobb-Douglas, CES and Fixed coefficient type, Translogproduction function. Laws of return, Returns to scale and Return to factors of production.Duality and cost function, Measures of productive efficiency of firms, technical andallocative efficiency. Partial Equilibrium versus General Equilibrium approach.Equilibrium of the firm and industry.

3. Theory of Value: Pricing under different market structures, public sector pricing,marginal cost pricing, peak load pricing, cross-subsidy free pricing and average costpricing. Marshallian and Walrasian stability analysis. Pricing with incompleteinformation and moral hazard problems.

4. Theory of Distribution: Neo classical distribution theories; Marginal productivitytheory of determination of factor prices, Factor shares and adding up problems. Euler’stheorem, Pricing of factors under imperfect competition, monopoly and bilateralmonopoly. Macro-distribution theories of Ricardo, Marx, Kaldor, Kalecki.

5. Welfare Economics: Inter-personal comparison and aggregation problem, Publicgoods and externality, Divergence between social and private welfare, compensationprinciple. Pareto optimality. Social choice and other recent schools, including Coaseand Sen and Game theory.

 

PART B:

Quantitative Methods in Economics:

1. Mathematical Methods in Economics: Differentiation and Integration and theirapplication in economics. Optimisation techniques, Sets, Matrices and their applicationin economics. Linear algebra and Linear programming in economics and Input-outputmodel of Leontief.

2. Statistical and Econometric Methods: Measures of central tendency anddispersions, Correlation and Regression. Time series. Index numbers. Samplingand Survey methods. Testing of hypothesis, simple non-parametric tests. Drawing ofcurves based on various linear and non-linear function. Least square methods andother multivariate analysis (only concepts and interpretation of results). Analysis ofVariance, Factor analysis, Principle component analysis, Discriminant analysis.Income distribution: Pareto law of Distribution, lognormal distribution, measurementof income inequality. Lorenze curve and Gini coefficient.