Business Economics – Paper I – Revised FYBFM Syllabus 2016
Modules at a Glance
| Sr. No | Modules | No. of Lectures |
| 1 | Introduction | 10 |
| 2 | Demand Analysis | 10 |
| 3 | Supply and Production Decisions and Cost of Production | 15 |
| 4 | Market structure: Perfect competition and Monopoly and Pricing and Output Decisions under Imperfect Competition | 15 |
| 5 | Pricing Practices | 10 |
| Total | 60 |
Business Economics – Paper I – Syllabus Overview
| Sr. No. | Modules / Units |
| 1 | Introduction |
| Scope and Importance of Business Economics – basic tools- Opportunity Cost principle- Incremental and Marginal Concepts. Basic economic relations – functional relations: equations- Total, Average and Marginal relations- use of Marginal analysis in decision making, The basics of market demand, market supply and equilibrium price- shifts in the demand and supply curves and equilibrium |
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| 2 | Demand Analysis |
| Demand Function – nature of demand curve under different markets Meaning, significance, types and measurement of elasticity of demand (Price, income cross and promotional)- relationship between elasticity of demand and revenue concepts.
Demand estimation and forecasting: Meaning and significance – methods of demand estimation: survey and statistical methods (numerical illustrations on trend analysis and simple linear regression) |
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| 3 | Supply and Production Decisions and Cost of Production |
| Production function: short run analysis with Law of Variable ProportionsProduction function with two variable inputs- isoquants, ridge lines and least cost – combination of inputs- Long run production function and Laws of Returns to Scale – expansion path – Economies and diseconomies of Scale.
Cost concepts: Accounting cost and economic cost, implicit and explicit cost, fixed and variable cost – total, average and marginal cost – Cost Output Relationship in the Short Run and Long Run (hypothetical numerical problems to be discussed), LAC and Learning curve – Break even analysis (with business applications) |
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| 4 | Market structure: Perfect competition and Monopoly and Pricing and Output Decisions under Imperfect Competition |
| Short run and long run equilibrium of a competitive firm and of industry – monopoly – short run and long- run equilibrium of a firm under Monopoly
Monopolistic competition:Equilibrium of a firm under monopolistic competition, debate over role of advertising (topics to be taught using case studies from real life examples) Oligopolistic markets: key attributes of oligopoly – Collusive and non collusive oligopoly market – Price rigidity – Cartels and price leadership models (with practical examples) |
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| 5 | Pricing Practices |
| Cost oriented pricing methods: cost – plus (full cost) pricing, marginal cost pricing, Mark up pricing, discriminating pricing, multiple – product pricing – transfer pricing (case studies on how pricing methods are used in business world) |
Reference books for subject: Business Economics – Paper I
| Business Economics – Paper I : ~ |
| • Mehta, P.L.: Managerial Economics – Analysis, Problem and Cases (S. Chand & Sons, N. Delhi, 2000) • Hirchey .M., Managerial Economics, Thomson South western (2003) • Salvatore, D.: Managerial Economics in a global economy (Thomson South Western Singapore, 2001) • Frank Robert.H, Bernanke. Ben S., Principles of Economics (Tata McGraw Hill (ed.3) • Gregory Mankiw., Principles of Economics, Thomson South western (2002 reprint) • Samuelson &Nordhas.: Economics (Tata McGraw Hills, New Delhi, 2002) • Pal Sumitra, Managerial Economics cases and concepts (Macmillan, New Delhi,2004) |
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