Credits 2

Pre-requisites – None

Compulsory / Optional - Compulsory for Mechanical Engineering / Optional for Others

To introduce students to basic principles of macroeconomics and microeconomics.

1. Describe the key ideas that define the economic way of thinking.

2. Analyse how demand and supply determine prices.

3. Explain the relationship between a firm’s output and costs.

4. Analyse the impact of government interventions in markets and basic macroeconomic concepts of GDP, inflation and unemployment.

1. Basic Economic Concepts:  Scarcity; thinking on the margin; opportunity cost; power of trade; comparative advantage; production possibilities frontier.

2. Supply and Demand:  Demand; supply; demand and supply shifters; equilibrium; elasticity; price ceiling and floors.

3. Costs and Production:  Profits and losses; how much should a firm produce; production function.

4. Government Interventions and Markets:  Public goods and private goods; economics of environment; externalities; green economics.

5. Macroeconomic Concepts:  GDP; unemployment; inflation; role of central banking; other measures of development.