SEMESTER III
Core I 5. Microeconomics I
Course Description
The course is designed to provide sound training in microeconomic theory to formally analyze
the behavior of individual agents. Since students are already familiar with the quantitative
techniques in the previous semesters, mathematical tools are used to facilitate understanding of
the basic concepts; this course looks at the behavior of the consumer and the producer and also
covers the behavior of a competitive firm.
Course Outcomes:
1. To develop an understanding of preferences and consumer choice and formally analyze
the behavior of individual agents
2. To be able to use mathematical tools to facilitate understanding of the basic concepts of
Economics.
3. To understand the behavior of the consumer and the producer.
4. To understand the behavior of a competitive firm.
Unit I: Consumer Theory I
Preferences and Utility, Axioms of Rational Choice, Utility, Trades and Substitutions,
Indifference curves; Mathematics of Indifference curves, Utility functions for specific
preferences, the many good cases; Utility Maximization and choice: the 2-good case (graphical
analysis), the n-good case, Indirect utility function, the Lump sum principle, Expenditure
minimization, properties of the expenditure function
LO: This module will enable the students to understand the basic concepts in consumer behavior like utility,
choice, optimization, and Indifference curves using mathematical tools; and differentiate between direct and
indirect utility, and explain expenditure function and its properties.
Unit II: Consumer Theory II
The Income and Substitution Effects: Demand function, changes in income, changes in goods
price- Direct and Indirect Approaches (Slutsky), the Individual‘s Demand Curve, Compensated
(Hicksian) demand curves and functions, demand elasticity, Consumer Surplus, Demand
relationships among goods, the 2-good case, substitutes and complements, Net (Hicksian)
substitutes, and Complements, Substitutability with many goods
LO: This module will enable the students to analyze the effects of changes in income and prices on demand;
differentiate between Ordinary and compensated demand; explain the concepts of price and income elasticities,
and substitutability between goods; and understand the concept of Consumer Surplus
Unit III: Production Theory and Costs
Production Functions: Marginal productivity, Production with One Variable Input (labour) and
with Two-Variable Inputs, Isoquant Maps and the Rate of Technical Substitution, Returns to
Scale, Elasticity of Substitution, Some Simple Production Functions: Linear, Fixed Proportions;
Technical Progress. Definition of Cost and its properties, Cost minimizing input choices
(Optimization principles, Expansion Path), Cost Functions and Shift in Cost Curves, Long-Run
versus Short-Run Cost Curves
LO: This module will enable the students to understand concepts like production function in the short run and
the long run, isoquants, and substitution between inputs; and explain concepts of cost, and optimization in the
short run and long run
Unit IV: Profit Maximization
The Nature and Behaviour of Firms, Marginal Revenue – Relationship between Average and
marginal revenue, Short-Run Supply by a Price-Taking Firm, Profit Functions and its Properties,
Profit maximization – General conditions, Input demands
LO: This module will enable the students to understand the behavior of the competitive firm and concepts like
average and marginal revenue; and learn the conditions for profit maximization, properties of profit function
Text Book:
1. C. Snyder and W. Nicholson (2012): Microeconomic Theory: Basic Principles and
Extensions, 11th Edition, Cengage Learning, Delhi, India
Reference Books:
1. H. R. Varian (2010): Intermediate Microeconomics: A Modern Approach, 8th Edition,
W.W. Norton and Company/Affiliated East-West Press (India). The workbook by Varian
and Bergstrom may be used for problems
Core I 6. Macroeconomics I
Course Description
This course introduces the students to formal modelling of a macro-economy in terms of
analytical tools. It discusses various alternative theories of output and employment determination
in a closed economy in the short run as well as long run, and the role of policies in this context.
Course Outcomes:
1. To understand the basics of consumption function and its relation with income, and
factors influencing consumption function.
2. To get a knowledge about various types of investment spending and evaluate the impact
of investment through multiplier and accelerator in economies.
3. Discuss the various approaches to demand and supply of money.
4. Analyse and interpret the IS-LM model as a step toward understanding economic
fluctuations.
Unit I: Consumption
Consumption – Income Relationship, Propensities to Consume and the Fundamental
Psychological Law of Consumption; Implications of Keynesian Consumption Function; Factors
Influencing Consumption Function; Measures to Raise Consumption Function; Absolute,
Relative, Permanent, and Life-cycle hypothesis
LO: This module shall enable the students to find out how consumption is affected by income and other factors.
Unit II: Investment
Autonomous and Induced Investment, Residential and Inventory Investment, Determinants of
Business Fixed Investment, Decision to Invest and MEC, Accelerator and MEI, Theories of
Investment: The Accelerator and Tobin‘s theory
LO: Students will gain an understanding of different forms of investment spending and theories of investment
Unit III: Demand for and Supply of Money
Demand for Money – Classical, Neoclassical, and Keynesian Approaches, The Keynesian
Liquidity Trap and its Implications, Supply of Money – Classical and Keynesian Approaches,
The Theory of Money Supply Determination and Money Multiplier, Measures of Money Supply
in India, RBI approach to money supply, Determination and Money multiplier. High-powered
money and money multiplier
LO: Students will be able to understand the workings of money in an economy.
Unit IV: Aggregate Demand and Aggregate Supply
Derivation of Aggregate Demand and Aggregate Supply Curves in the IS-LM Framework;
Nature and Shape of IS and LM curves; Interaction of IS and LM curves and Determination of
Employment, Output, Prices and Investment; Changes in IS and LM curves and their
Implications for Equilibrium
LO: This module shall help to gain knowledge about the way the goods market and money market serve as a basis
for the determination of employment, output, price, and investment.
Basic readings:
1. N. Gregory Mankiw (2010): Macroeconomics, 7th edition, Cengage Learning India
PrivateLimited, New Delhi.
2. Richard T. Froyen (2005): Macroeconomics, 2nd Edition, Pearson Education Asia,
NewDelhi.
Reference Book:
1. Snowdon, B. and Vane H. R. (2005). Modern macroeconomics –its Origins,
Development and Current State. Edward Elgar Publishing Limited, Cheltenham, UK.
2. Ahuja H. L. (2019). Macroeconomics- Theory and Policy. 20th Edition, S Chand
publication.
3. Dwivedi, D. N. (2018): Macroeconomics -Theory and Policy. 5th Edition, Tata McGraw
Hill.
Core I 7. Mathematical Methods for Economics I
Course Description
This is the first of a compulsory two-course sequence. The objective of this sequence is to
transmit the body of basic mathematics that enables the study of economic theory at the
undergraduate level, specifically the courses on microeconomic theory, macroeconomic theory,
statistics and econometrics set out in this syllabus. In this course, particular economic models
are not the ends,but the means for illustrating the method of applying mathematical techniques
to economic theoryin general. The level of sophistication at which the material is to be taught is
indicated by the contents of the prescribed textbook.
Course Outcomes:
1. To use mathematical techniques in analyzing economic problems
2. To get a fair idea about the number system, set theory, and different types of functions.
3. Evaluate and use the concept of derivative of functions involving single variables to link
the total and marginal concepts in Economics.
4. Understand major concepts of Linear Algebra
Unit I: Preliminaries and Functions of One Real Variable
Sets and set operations; Cartesian product; relations; functions and their properties; Number
systems. Types of Functions: constant, polynomial, rational, exponential, logarithmic; Graphs
and graphs offunctions; Limit and Continuity of functions; Limit theorems.
LO: This module will enable the students to know the theory of sets, ordered pairs, and Cartesian products; and
learn the concepts of relation and function and limit and continuity of functions.
Unit II: Derivative of a Function
Rate of change and derivative; Derivative and slope of a curve; Continuity and differentiability
of a function; Rules of differentiation for a function of one variable; Application- Relationship
between total, average and marginal functions.
LO: This module will enable the students to know the concept of the derivative and the rules for derivatives; and
about the economic applications of differentiation in establishing the relationship between total, marginal, and
average functions in Economics.
Unit III: Functions of two or more Independent Variables
Partial differentiation techniques; Geometric interpretation of partial derivatives; Partial
derivatives in Economics; Elasticity of a function – demand and cost elasticity, cross and partial
elasticity.
LO: This module will enable the students to find out partial derivatives of multivariate functions; and calculate
elasticities of multivariate functions.
Unit- IV: Matrices and Determinants
Matrices: concept, types, matrix algebra, transpose, inverse, rank; Determinants: concept,
properties, solving problems using properties of determinants, solution to a system of equations -
Crammer‘s rule and matrix inversion method.
LO: This module will enable the students to understand different types of matrices and determinants; and learn
about the matrix operations and solve systems of linear equations using matrices.
Text Book:
✓ C. Chiang and K. Wainwright (2005): Fundamental Methods of Mathematical
Economics, McGraw Hill International Edition
Reference Book:
1. K. Sydsaeter and P. J. Hammond (2002): Mathematics for Economic Analysis.
PearsonEducational Asia
2. Edward T Dowling (2004): Introduction to Mathematical economics, Tata McGeaw-Hill,
Third Edition.
Taro Yamane (1995): Mathematics foe Economists: An elementary survey. New Delhi
Prentice Hall. Second Editio
Core II
Introduction to the Constitution Of India
Course Objectives:
This course introduces students to the Constitution of India – the supreme law of the land.
The primary objective of this course is to provide students with a comprehensive
understanding of the constitutional framework and political institutions in India. Through a
critical examination of the constitutional design, the learners will explore the foundational
principles of the Indian Constitution. By tracing the historical contestations surrounding the
incorporation of these values into the Constitution and their practical manifestations, learners
will develop an appreciation for the intricate interplay between institutional practices and
political contexts. Furthermore, the course aims to cultivate an understanding of the
institutional dynamics within the Indian governance matrix, characterized by both conflict
and cooperation, asymmetrical federal arrangements, and mechanisms for safeguarding
vulnerable populations against discrimination. Additionally, students will gain insight into the
powers and functions of key governmental figures such as the President, Prime Minister, and
Chief Minister and other constitutional and non-constitutional bodies, while also delving into
the intricacies of Union-State relations.
Expected Learning Outcomes:
This course endeavours to equip students with the necessary knowledge and analytical tools
to engage critically with the constitutional structures and processes that underpin Indian
democracy. The unit-wise outcomes are given below.
Unit-I: The learners would gain basic understanding of Indian Constitution and its
underlying values. This would enable them to analyse the operation of the Constitution of
India from a policy perspective, and in the context of social and cultural diversity. This would
strengthen the foundation of constitutional ethics among the learners.
Unit-II: The learners would develop awareness regarding the basic structures and processes
of government at both union and state levels with a specific focus on power and
responsibilities of highest constitutional dignitaries. This will help them to acquire
administrative skills and political insights for engaging in various institutions.
Unit-III: The learners would be familiar with the judicial structures and procedures in India.
Further, the awareness about Writs, Judicial Review, PIL, Basic Structure Doctrine would
enable them to develop an understanding about their rights and entitlements as citizens and
methods to secure these within the legal framework, in case of violation.
Unit-IV: The learners would understand the division of power between Union and States
with focus on different constitutional bodies. This would enable them to understand and
analyse the manner in which the Indian federal system functions.
Course Content:
Unit-I: Basic Structure of the Indian Constitution
a) Making of the Indian Constitution: Formation and Working of Constituent Assembly
b) Preamble: Nature of State and Constitutional Values
c) Fundamental Rights, Directive Principles of State Policy, Fundamental Duties
Unit-II: Legislature and Executive in Union and State
a) Structure of the Parliament and Legislative procedures; State Legislatures
b) President; Governor
c) Prime Minister and Council of Ministers; Chief Minister
Unit-III: Judiciary
a) Supreme Court of India: Structure and Functions
b) High Courts: Structure and Functions
c) Judicial Review and Basic Structure Doctrine, Public Interest Litigation (PIL)
Unit-IV: Union-State Relationship
a) Division of Power: Administrative, Legislative and Financial
b) Election Commission, Finance Commission, CAG
c) NITI Ayog, Inter-State Council, GST Council
Essential Readings:
Austin, Granville (1999). The Constitution of India: Cornerstone of a Nation. Oxford
University Press.
Bakshi, P.M. (2023). The Constitution of India. Universal Law Publishing.
