Business Economics – Paper I – Revised FYBFM Syllabus 2016

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
 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)

 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)

 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)

 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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