Introductory Economics (Micro and Macro): A Textbook for Class XII

252 Pages·2006·2.31 MB·English

by  Subhendu Dutta

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PREFACE
I have immense pleasure to bring out the present book which is basically designed to cover
complete syllabus of Economics for Higher Secondary second year examination (Class XII) as
introduced by the Nagaland Board of Secondary Education from the session 2004–2005. The
book will also be useful for the students appearing in class XII examination under CBSE.
The introduction of new syllabus has created vacuum in respect of suitable books exactly
in conformity to NBSE syllabus. As such the present book has been written particularly
keeping in mind the problems faced by students studying economics as a paper under NBSE.
The book will equally serve the purpose of students opting either Arts or Commerce stream.
The book is written in a very simple language understanding that it is meant for beginners.
The book contains two Parts-A and B. Part-A analysis Microeconomics and Part-B deals with
Macroeconomics. The new syllabus containing microeconomics and macroeconomics with
eleven units in total have been suitably divided into twenty seven chapters. Unit-5 and
unit-11 in the contents are meant for CBSE students only. At the end of the book, selected
basic economic terms have been included under the heading ‘Elementary Economic Terms’.
These are the terms most commonly and frequently used in economics and also in real life.
The underlying idea is to provide a student general understanding of economics as a subject
more clearly and analytically. Past years examination question papers of the NBSE from 1995
onwards have also been incorporated.
I am thankful to my wife Mili Dutta for constant inspiration and my lovely daughter
Sneha who has given me much time to work on it smoothly. I am also thankful to my
colleagues who have directly or indirectly lent their helping hands. I am very much grateful
to Mr. Saumya Gupta (Managing Director), Mr. V.R. Damodaran (Production Editor) and Saba
Khan (Development Editor) of M/s New Age International (P) Limited, New Delhi for taking
prompt and sincere initiative for publishing the book in a right time.
I would always invite critical views and suggestions for improvement of the book from
both students and fellow teachers.
SUBHENDU DUTTA
Department of Economics,
Public College of Commerce,
Dimapur: Nagaland
Email:[email protected]
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CONTENTS
PART A
INTRODUCTORY MICROECONOMICS
UNIT-1
1. INTRODUCTION TO MICROECONOMICS 3
What economics is all about? Wealth definition; Welfare definition, Scarcity
definition, Subject matter of economics, Positive and normative economics;
Questions for review.
2. PROBLEMS OF AN ECONOMY 11
Central problems of an economy, Production possibility curve, Uses of
production possibility curve, Opportunity cost; Questions for review.
UNIT-2
3. CONSUMER BEHAVIOUR 16
Consumer’s equilibrium—utility maximization, Utility, Total utility, Marginal
utility, Law of diminishing marginal utility; Questions for review.
4. DEMAND AND LAW OF DEMAND 21
Meaning of demand, Market demand, Determinants of demand, Demand
schedule and demand curve, Law of demand, Assumptions of the law, Why
does the law of demand operate? Exceptions to the law of demand, Movement
along and shifts in demand curve; Questions for review.
5. ELASTICITY OF DEMAND 32
Meaning of price elasticity of demand, Kinds of price elasticity of demand,
Measurement of price elasticity of demand—percentage, total expenditure/
outlay, arc method, geometrical method and revenue method. Income elasticity
of demand, Cross elasticity of demand, Determinants of price elasticity of
demand; Questions for review.
UNIT-3
6. THEORY OF PRODUCTION 41
Meaning of production, Meaning of production function, Returns to a factor
and returns to scale, Law of variable proportions, Law of diminishing returns,
Assumptions of law, Returns to scale; Questions for review.