Ricardian Theory of Rent – David Ricardo (1817)

Unit 1: Micro Economics

Theory of Consumer Behaviour

• Cardinal utility vs. ordinal utility approach

• Law of diminishing marginal utility

• Indifference curve analysis (IC, budget line, MRS, consumer equilibrium)

• Revealed preference theory

• Income and substitution effects (Hicks vs. Slutsky decomposition)

Theory of Production and Costs

• Production function: short-run and long-run

• Isoquants, isocosts, MRTS

• Returns to scale & returns to a factor

• Cost concepts: accounting vs economic cost

• Short-run and long-run cost curves, economies and diseconomies of scale

Decision Making under Uncertainty

• Expected utility theory

• Risk aversion, risk preference, risk neutrality

• Stochastic dominance

• Certainty equivalent & risk premium

Game Theory – Non-Cooperative Games

• Strategic form games, Nash equilibrium

• Dominant strategies

• Mixed strategy equilibrium

• Prisoner’s dilemma, coordination games

Market Structures

• Perfect competition, monopoly, monopolistic competition, oligopoly

• Price determination, equilibrium output

• Efficiency: allocative and productive efficiency

• Cournot, Bertrand, Stackelberg models

Factor Pricing

• Marginal productivity theory

• Factor demand and supply

• Rent, wages, interest, and profit determination

General Equilibrium Analysis

• Exchange economy (Edgeworth box)

• Production and consumption equilibrium

• Walrasian equilibrium

Efficiency Criteria

• Pareto optimality

• Kaldor-Hicks criterion

• Wealth maximization

Welfare Economics

• Fundamental Theorems of Welfare Economics

• Social welfare function (Bergson-Samuelson approach)

Asymmetric Information

• Adverse selection

• Moral hazard

• Signaling and screening mechanisms

Unit 2: Macro Economics

National Income

• Concepts: GDP, GNP, NNP, NI, PI, DI

• Measurement methods: income, output, expenditure approach

Determination of Output & Employment

• Classical approach: Say’s Law, full employment

• Keynesian approach: effective demand

Consumption Function

• Absolute income hypothesis

• Relative income, permanent income, life-cycle hypothesis

Investment Function

• Determinants of investment

• Marginal efficiency of capital (MEC)

• Accelerator principle

Multiplier and Accelerator

• Simple multiplier

• Investment multiplier

• Interaction with accelerator

Money & Monetary Theory

• Demand for money: transactions, precautionary, speculative motives

• Supply of money: measures M1, M2, M3

• Liquidity preference theory

IS-LM Model

• Derivation and equilibrium

• Shifts in IS and LM curves

• Monetary & fiscal policy implications

Inflation and Phillips Curve

• Trade-off between inflation and unemployment

• Expectations-augmented Phillips Curve

Business Cycles

• Phases, causes (Hicks, Samuelson, Kaldor models)

Rational Expectations Hypothesis

• Concept & critique

• Policy ineffectiveness proposition

Unit 3: Statistics and Econometrics

Probability Theory

• Basic probability, conditional probability, Bayes theorem

• Probability distributions: discrete & continuous (Binomial, Poisson, Normal)

• Moments: mean, variance, skewness, kurtosis

• Central Limit Theorem

Descriptive Statistics

• Measures of central tendency & dispersion

• Correlation & regression

• Index numbers

Sampling

• Sampling methods: random, stratified, cluster

• Sampling distribution & standard error

Statistical Inference

• Hypothesis testing: t-test, chi-square test, F-test

• Confidence intervals

Regression Analysis

• OLS assumptions & BLUE property

• Multicollinearity, heteroscedasticity, autocorrelation

Simultaneous Equation Models

• Identification problem

• Recursive and non-recursive models

Discrete Choice Models

• Logit, probit, multinomial models

Time Series Analysis

• Components: trend, seasonal, cyclical, irregular

• AR, MA, ARMA models

Unit 4: Mathematical Economics

Mathematical Foundations

• Sets, functions, sequences, series, continuity

• Differentiation & applications in economics

• Partial derivatives & total derivatives

Linear Algebra

• Matrices, determinants, inverse, rank

• Vector spaces, eigenvalues & eigenvectors

Optimization

• Unconstrained & constrained optimization

• Lagrangian method, Kuhn-Tucker conditions

Operations Research

• Input-output model

• Linear programming: simplex method

Dynamic Analysis

• Difference & differential equations in economics

Unit 5: International Economics

Trade Theory

• Comparative & absolute advantage

• Heckscher-Ohlin theorem

• Terms of trade, trade gains

Trade under Imperfect Competition

• Monopolistic competition & international trade

• Tariff & non-tariff barriers, dumping

Balance of Payments

• Current & capital account

• Disequilibrium & adjustment mechanisms

Exchange Rates & Forex

• Determination of exchange rate

• Arbitrage & covered/uncovered interest parity

Trade Policy & Institutions

• GATT/WTO rules

• Regional trade agreements

• IMF & World Bank role

Unit 6: Public Economics

Market Failure

• Public goods, externalities, asymmetric information

Market Regulation

• Collusion, price regulation, consumer welfare

Public Finance

• Taxation: direct vs indirect, incidence, effects

• Public expenditure, debt, budget, fiscal policy

• Budget multiplier

Unit 7: Money and Banking

• Components of money supply

• Central bank & commercial banks

• Monetary policy instruments

• Non-banking financial institutions

• Capital market & regulation

Unit 8: Growth and Development

Economic Growth

• Harrod-Domar, Solow, Kaldor, Robinson models

Economic Development Theories

• Classical (Smith, Ricardo)

• Marxian, Schumpeterian, Rostow

• Balanced & unbalanced growth, Big Push

Technical Progress

• Embodied vs disembodied

• Endogenous growth theory

Development Indicators

• HDI, PQLI, SDGs

• Poverty & inequality measures

Social Sector

• Health, education, gender development

Unit 9: Environmental Economics and Demography

Environmental Economics

• Environment as public good

• Market failure & Coase theorem

• Cost-benefit analysis & environmental valuation

Demography

• Fertility, mortality, morbidity

• Age structure, demographic dividend

• Migration & life tables

Unit 10: Indian Economy

Growth & Structure

• Sectoral growth: agriculture, industry, services

• Policy responses

Rural & Urban Development

• Issues & challenges, schemes

Foreign Trade

• BOP, foreign capital, trade policies

Infrastructure

• Physical & social infrastructure

• PPP models

Reforms

• Land, labor, capital

• Center-State financial relations, FRBM

Socio-Economic Indicators

• Poverty, inequality, unemployment