Essentials of Economics

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Course TypeCourse CodeNo. Of Credits
Foundation ElectiveSGA1EL1064

Semester and Year Offered: Winter semester, 1st Year

Course Coordinator and Team: Samik Chowdhury

Email of course coordinator:

Pre-requisites: None

Aim: The course is aimed at providing a basic understanding of how constituent units of an economy work and interact, and its implications for the larger macro economy and society. The key elements that would be covered include choice, consumption, production, exchange, value, cost, price, accumulation and distribution. A substantial part of this course shall deal with essential microeconomics, with a relatively smaller weight accorded to macroeconomics, trade and economics of the public sector.

Course Outcomes:

  1. To understand the scope and method of economics, behavior of economic agents and their inter-dependence
  2. To understand markets, its virtues and limitations
  3. To build a critical ability to analyse public policy

Brief description of modules/ Main modules:

  1. Introduction to Economics: This unit introduces economics as a way of thinking and a tool to understand society and global affairs. It comprises of (1) scope and method of economics - a description of macroeconomics, microeconomics and other diverse fields of economics; economic theory, models and economic policy, (2) reading graphs in economics – single variable, two variable, curves, coordinate system, slope and (3) the economic problem: scarcity and choice – concept of opportunity cost, comparative advantage, production possibility frontier.
  2. Market System - Household and Firm Choices: This unit deals with the different units in an economy and their interactions in the market. It includes (1) the circular flow of income, goods and factors of production, (2) household behavior and consumer choice, (3) production process and the behavior of firms, (4) costs – short run and long run (5) demand, supply and market equilibrium, (6) applications of demand and supply – price controls, taxes, consumer and producer surplus, (7) elasticity and its applications, (8) firms in a perfectly competitive market
  3. Market Imperfections and Role of Government: This unit deals with some of the limitations of the market and the role of government. It includes (1) monopoly (2) externalities, (3) asymmetric information, (4) public good – free rider problem, tragedy of commons, (5) taxation – progressive, proportional, regressive, horizontal and vertical equity (6) economic systems – command economies, laissez faire, mixed systems.
  4. Elementary Macroeconomics and International Trade: This unit deals with the aggregate economy characteristics. It includes (1) the economy’s income and expenditure, (2) international trade – absolute advantage, comparative advantage, globalization (3) measurement of GDP, (4) components of GDP, (5) real vs nominal GDP, (6) unemployment (7) inflation (8) consumer price index
  5. Growth and Development: This unit shall provide an overview of selected issues in economic growth and development. It would cover topics like, (1) limitations of GDP (2) poverty and inequality, (3) population, health and education.

Assessment Details with weights:

  1. Two in-class quizzes (announced) comprising of MCQ’s (30%).
  2. Mid semester assessment will consist of an assignment/presentation (30%).
  3. End semester assessment will consist of a final examination (40%).

Reading List:

  • N. Gregory Mankiw (2012), Principles of Economics, Cengage Learning
  • K E Case and R C Fair, (2008), Principles of Economics, Prentice Hall
  • National Council of Educational Research and Training (NCERT), Introductory Microeconomics: Textbook in Economics for Class XII, 2018-19
  • National Council of Educational Research and Training (NCERT), Introductory Macroeconomics: Textbook in Economics for Class XII, 2018-19


  • Partha Dasgupta (2007), Economics: A Very Short Introduction, OUP.