Economics

Course IDCourse NameInstructorRoom NumberTime
EconomicsSyed Mahbub Rahman2039:00-9:50 A.M. (Monday), 11:00-11:50 A.M. (Thursday)

Introduction:
Economics is a dynamic science-changing to reflect the shifting trends in economic affairs in the environment, in the world economy, and in society at large. Economics teaches students to use the economist’s lens to view the national and international economy. Fundamentals of Economics course will cover two major branches of Economics like-Microeconomics and Macroeconomics.
Microeconomics today is concerned with the behavior of individual entities such as market firms, and households. A study of Microeconomics helps students to get a brief idea aboU important issues like demand and supply schedule, consumers’ preference, theory of production, different elasticities, profit maximization of a firm and an industry, analysis of cost of a firm.
Macroeconomics is concerned with the overall performance of the economy. Today, Macroeconomics examines a wide variety of areas, such as how total investment and consumption are determined, how central banks manage money and interest rates, how government determines its fiscal policy, how national income is accounted. A study of Macroeconomics facilitates students to get a good understanding of overall economy of a country.

Course Objective:
This course is designed as a fundamental material to expose the core issues of Economics. The objective of this course is to give students a clear, accurate, and interesting introduction to Economics.

Microeconomics
1. Introductory view of economics: Definition of Economics, Twin themes of Economic, Microeconomics and Macroeconomics, Positive and Normative Economics, Basic problems of economic organization, Different economic structures to solve the problems, Production Possibility Frontier (PPF): definition and examples, economic growth by expanding PPF.
2. Demand Analysis: Demand curve and demand schedule, Movement and shift of demand, Determinants of demand, Exceptional demand curves.
3. Supply Analysis: Supply curve and supply schedule, Movement and shift of supply, Determinants of supply.
4. Market Equilibrium
5. Elasticity: Definition, Price elasticity of demand and supply, Cross elasticity, Income elasticity.
6. Some applications of price elasticity of demand: Effect of tax —impact and incidence, Paradox of bumper harvest, Price floor (minimum wage).
7.Consumer Behavior: Utility; Marginal utility; Relationship between ‘total utility’ and ‘marginal utility’; Law of diminishing marginal utility; Equilibrium condition of a consumer under utility theory; Indifference Curve: Characteristics of an indifference curve, indifference map; Budget Line, Equilibrium condition under indifference curve approach.
8. Production: The production function, factors of production, Short and long run, law of diminishing returns, returns to scale, average and marginal product, impact of technological change on production.
9. Analysis of cost and profit: Different types of costs, opportunity costs, relationship between marginal cost and average cost, accounting and economic profit.
10. Perfect competition: Assumptions of competitive market in detail without graph, profit maximizing condition of a firm.
11. Imperfect competition: Monopoly, oligopoly, monopolistic competition, monopsony (only characteristics in brief).
12. Investment decision: Present Value of an asset, Net present value, Investment decision based on net present value

Suggested Readings:
Samuelson P.A and Nordhaus W.D., Economics
Lipsey R., An introduction to positive economics
Baumol W and Blinder A., Economics: Principles and Policy

Macroeconomics
13. Introduction to macroeconomics: GDP, GNP, National Income(NI), Different ways to measure national income, Difficulties of measurement of NI, Nominal and real NI .NI deflator.
14. Circular flow of income.
15. Aggregate demand and aggregate supply: shift in aggregate demand and aggregate supply. macroeconomic equilibrium.
16. Inflation. Demand pull inflation and cost push inflation in detail with graphical explanation
17. Money and banking: Definition and functions of money, Interest rate determination: emand a supply of money, money market equilibrium.
18. Monetary and fiscal policy: Definition of monetary and fiscal policy, Their objectives, Monetary and fiscal policy during inflation, Government revenue and expenditures, Classification of tax, Tax system of Bangladesh, Public debt and its burden.
19. International Trade: Absolute and comparative advantage theory, gains from trade, Advantages and disadvantages of free trade. protectionism. Effect of tariff, Advantages and disadvantages of protectionism.
20. National Budget Analysis (Fiscal Year 2010-2011).

Suggested Readings:
Parkin M., Macroeconomics
Hyman D. Economics

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