The paper on `Principles of Microeconomics` has to be taken up for study in the first semester of B.Com. The present book has been prepared strictly according to the new syllabus that has been introduced this year. It covers all topics in a comprehensive and exhaustive way. The discussion in the book is divided into five units. The organisation, structure and contents of these units are as follows :
Unit 1 on `Introduction` discusses the definition of Economics, the concept of market economy, production possibility curve, the distinction between microeconomics and macroeconomics, and uses and limitations of microeconomics.
Unit 2 on `Consumer Behaviour` discusses the theory of indifference curves. It explains the meaning and characteristics of indifference curves, consumer`s equilibrium, income effect, substitution effect, price effect, and the distinction between normal goods, inferior goods and Giffen goods in considerable detail.
Unit 3 on `Production and Costs` starts by defining a firm and then proceeds to a discussion on a variety of concepts and issues related to the production theory like the law of variable proportions, isoquants and their characteristics, returns to scale, economies and diseconomies of scale, etc. This is followed by the discussion on the various concepts of cost and cost functions both in the short run and the long run, the equilibrium of the firm, and the effects of technological changes in the very long run. The unit concludes by analysing the various revenue concepts and their interrelationship.
Unit 4 on `Market Structures` is devoted to a discussion of the following market structures − perfect competition, monopoly, monopolistic competition and oligopoly. We discuss in detail how the equilibrium of the firm is established and price determined under conditions of perfect competition, monopoly and monopolistic competition. We also explain the characteristics of oligopoly and the dilemma of firms operating in this market structure.
Unit 5 on `Income Distribution and Factor Pricing` is devoted to a study of income distribution between factors of production. After examining in detail how the market demand curve for a factor is obtained, it shows how this alongwith the supply of a factor, determines the factor price. It also explains the concept of rent in a detailed manner and shows why rent is an economic surplus.
All difficult concepts have been explained thoroughly in an easy manner and, for this purpose, liberal use of diagrams has been made. For the benefit of students, important definitions and concepts have been highlighted in bold letters and main points have been summed up under the caption `Key Points` at the end of each chapter. For the practice of students, a set of questions has been added at the end of each chapter.
TOPIC I : INTRODUCTION
1. Introduction to Economics
2. Demand and Supply
3. Elasticity of Demand and Supply
4. Applications of Demand and Supply
TOPIC II : CONSUMER THEORY
5. Indifference Curve Analysis
TOPIC III : PRODUCTION AND COSTS
6. Theory of Production
7. Theory of Costs and Revenue
TOPIC IV : MARKET STRUCTURES
8. Theory of Perfect Competition
9. Theory of Monopoly Firm
10. Imperfect Competition
TOPIC V : INCOME DISTRIBUTION AND FACTGOR PRICING
11. Income Distribution and Factor Pricing