Nirma University Institute of Technology

Transcription

1 ANNEXURE 16 Nirma University Institute of Technology Department of Mathematics and Humanities Course Policy B.Tech. (Chemical Engineering/CL/EC/ME) Semester: III Academic Year: Term: ODD Course Code & Name : SS341, for Engineers Credit Details : Course Co-ordinator : Dr.Paramasivan S Vellala Contact No. & param.vellala@nirmauni.ac.in Office : AM to PM Visiting Hours Course Blog : : samirkmahajan.wordpress.com Course Faculty Contact No. and Office Visiting Hours Dr.Paramasivan S Vellala Dr.Samir K Mahajan samirkmahajan@nirmauni.ac.in AM to PM

2 Introduction to Course: This subject helps the students to understand, analyse and evaluate the economic efficiency of engineering projects. It helps the students to acquire knowledge regarding fundamental economic principles like the principle of marginal, opportunity cost, tradeoff, rationality etc. which can help them to allocate the scarce resources effectively. This subject will act as catalyst agent to understand the market failure due to externalities or market power and how the nation s progress or standard of living of the people is measured. Course Learning Outcomes: After the successful completion of the course, students will be able to understand the basic principles and theory of economics analyse macro - economic policies evaluate the economic efficiency in engineering projects Syllabus: for Engineers [ ] SS341 Course Learning Outcome (CLO): After successful completion of the course, students will be able to understand the basic economic theory and economic way of thinking analyze macro - economic policies evaluate the economic efficiency in engineering projects

3 Module: - 1 MICRO ECONOMICS 1. Basic Economic Concepts: Meaning and understanding of basic economic concepts 2. Demand and Supply: Meaning and Determinants of Demand and Supply, Law of Demand and Supply, Elasticity of Demand and Supply. 3. Function: Meaning, production with one variable input, the law of variable proportion, the laws of returns to scale. Economies of Scale 4. Cost Function: Different types of costs, the short run and long run cost functions. 5. Market Structure: Meaning and characteristics of different types of market Perfect Competition Monopoly Monopolistic Competition and Oligopoly Module-2 MACRO ECONOMICS 6. Introduction to : Basic Economic Concepts, National Income Accounting, Concepts of National Income and Methods of National Income Computation 7. Inflation: Meaning, types, causes, effect and remedial measures. 8. Money and Banking: Meaning and Functions of money, Money Supply, Commercial Banks and Central Bank-Meaning and Functions 9. Public Finance: Government Expenditure, Receipts, Budget and Deficits. Self -Study: The self -study contents will be declared at the commencement of semester. Around 10% of the questions will be asked from self study contents. Suggested Books: (1) Micro Robert S Pindyck, Daniel L Rubinfeld, Prem L Mehta - Pearson (2) Principles of N.Gregory Mankiw, Thomson South Western, Pearson (3) Modern H.L.Ahuja S.Chand & Company (4) Rudiger Dornbush, Stanley Fisher, Richard Startz Tata Mc-Graw-Hill (5)Principles of, C.Rangarajan and B.H.Dholakia, The McGraw Hill (6), Samuelson and Nordhaus, Tata McGraw Hill (7) Managerial : Principles and Worldwide Applications, Dominick Salvatore, Adapted by Ravikesh Srivastava, Oxford University Press List of Journals/Periodicals/Magazines/Newpapers: Economist, Indian Economic Review, Asian Economic Review, American Economic Review, Economic and Political Weekly (EPW), Economic Times, Business Standard etc. Websites Recommended: etc.

4 Self-study: for Engineers (SS341) Odd: Words Word Meaning Related Chapter Economic Efficiency Micro Choice Allocative inefficiency Economizing behavior. When applied to the community, it implies that an activity should undertaken if the sum of the benefits derived there from should exceed the cost of such activity and therefore no activity should be undertaken if the cost thereof exceed the benefit there from That branch of economics which explain the aggregate economic behavior of an economy the aggregate demand, the aggregate supply, national income, inflation, business cycle etc. That branch of economics which explain the individual economic unit consumer s behavior, firm s stud, factor pricing, pricing theory, production theory etc The act of selecting the best among a number of alternatives The use of uneconomical combination of resources to produce goods and services Introduction Introduction Introduction Introduction Introduction Utility The want satisfying power of a product or service Utility Chapter Marginal Demand Law of Demand Elasticity of Demand Term used to describe the effects of a change in the current situation mathematically it is nothing but derivative the rate of change The desire for a product/service supported by willingness to buy and ability to pay It establishes the inverse relationship between the price and the quantity demanded It is the degree of responsiveness of quantity demanded to changes in its determinants Utility Chapter Demand Demand Demand

5 Supply Law of Supply Equilibrium Short Run That part of stock which is offered in the market for sale It establishes the direct relationship between price and quantity supplied It is the point of equality between the forces of demand and supply. At this point demand is equal to supply. It is hypothetically an ideal situation. A point of no change. At this point both consumers and producers are happy. Consumers are happy because they attain maximum satisfaction and producers are happy because they attain maximum profits Normally used in production and cost function to indicate the insufficient length of time (say up to one year) to permit the firm to adjust changes according to the changes in market conditions like expanding the size of the plant to install additional capacity in the production. Supply Supply Demand/Supply /Cost Chapter Long Run Factors of It indicates the sufficient length of time which enables the firm to adjust its decisions to the changes in the market conditions It refers to the combination of land, labor, capital and entrepreneur that are essential for production /Cost Chapter Factor Pricing The reward to the factors of production Return to Factor Returns to Scale Break Even Point Changes in the production in the short run due to changes in one or more variable inputs, keeping some other inputs constant Economies (benefits) derived in the long run due to managerial efficiencies, R&D effect, technical efficiencies, marketing economies, transport and storage economies etc that occur due to changes in the long run. production function A firm is said to be at break even when it covers all the costs it incurred but earn zero profit i.e. it is the point of no profit, no loss. /Cost

6 Isoquent Economic Region of Ridge Lines Opportunity Cost Externalities Output curve whice shows different combinations of input which produce identical level of output techniques that lies within the negatively sloping segments of iso quent curves are technically called economic region of production Ridge lines bound the economic region of production The cost of foregone choices. It is the cost of next best alternative The side effects or spillover effects, of an action that influence the well being of non consenting parties it may be negative externality or positive externality Economies of Scale Economies of Scope Shutdown Classification of Cost When cost per unit falls due to use of technically efficient machines, greater degree of division of labor and specialization, etc which causes the deflated long run average cost curve of a firm It refers to the reduction in costs that occur when the firm produces two or more products together rather than PRODUCING AT TWO DIFFERENT PLANTS. i.e. if joint production yields more benefits than if produced separately. A temporary halt in the operation of a business in which the firm anticipates a return to operation in the future and therefore may not sell its assets. The firm s variable cost may be eliminated but the fixed cost continue. Total Fixed Cost (TFC): The Cost of Fixed Assets which does not vary with the levels of output Total Variable Cost (TVC): The cost of variable factors like rawmaterials, power cost etc. which vary with the levels of output Total Cost (TC) : TC = TFC + TVC

7 Market Market Equilibrium/Profit Maximizing Output Marginal Cost: It is the derivative of the TC function. AFC: TFC/Q AVC: TVC/Q ATC: TC/Q or AFC + AVC The abstract concept that covers the trading arrangements of buyers and sellers that underline the market forces the forces of demand and the forcesof supply A market,whether it is perfect competitive, or monopoly or monopolistic competition or oligopoly is said to be at equilibrium (PROFIT MAXIMIZIANG OUTPUT) if the following two conditions are satisfied. 1. First Order Condition; (FOC) MR = MC 2. Second Order Condition(SOC): MC must cut MR from BELOW Note: MR is the derivative of TR function and MC is the derivative of TC function Market Market Market Failure Game Impossible Trinity National Income The failure of the market system to attain the hypothetically ideal allocative efficiency. This means that the potential gains exist that has not been captured. Game is a strategy followed by a firm in a oligopoly market situation and the expected outcomes of the strategy can be shown in the pay-off matrix. It is impossible for a nation to have (1) Free Capital Flows (2) A Fixed Exchange Rate and (3) Independent Monetary Policy together. If we put all these elements in the three sides of a triangle, a nation must choose one side of the triangle, giving up the opposite corner. It the branch of macro economics which explains the aggregate money value of all the final goods and services produced within the domestic territory of a nation in a financial year Market Market Economic Models National Income

8 Inflation Accelerator Multiplier Budget Central Bank Monetary Policy Fiscal Policy When too much of money supply chases very few goods, the situation is called inflation. It may be demand pull inflation or cost push inflation. The rising prices of essential commodities is currently the major concern of Indian Economy. The investment spending is proportional to the changes in output (national income) and is not affected by the cost of capital. It shows the relationship between the changes in the output and the volume of investment outlay. It states that in a market economy any autonomous change in real planned demand for output leads to a cumulative reaction in the equilibrium level of production, i.e. some multiple of the autonomous change It is the cornerstone of the macro economic principles that were brought in by Prof. J.M.Keynes in his income determination model to tackle the Great Depression of 1930s It shows the expected planned expenditures and the expected revenues of the government in a fiscal year. It controls the nation s money supply and banking system. Every country has a central bank. Our central bank is Reserve Bank of India(RBI) The policies framed by the central bank to regulate the banking and monetary system of a country through changes in the interest rates, reserves to be maintained by the commercial banks with the central bank etc. The policies framed by the government through the use of taxation and expenditure to regulate the aggregate level of the economic activity

9 Lesson Plan No. of Lectures Topics CLO Mapping MODULE 1 - Micro 03 Meaning and Basic Concepts of 01-CLO-1/3 Resource Means of (Human/Natural/Manufacturing) Meaning and Definition of (Robbins) Central Problems of What to produce, How to produce, Whom to produce Needs Wants - Utility Choice/Trade Off/Opportunity Cost Rationality/Economic Efficiency Marginal Subject matter of economics Micro vs. 03 Demand Analysis and Supply 02-CLO-1 Meaning of Demand Demand Determinants and Demand Function Law of Demand and exceptions Elasticity of Demand and Measurement Price/Income/Cross/Advertisement Supply and Determinants Law of Supply Equilibrium Price 03 Theory of 03 CLO-1/3 - Factors of /Resource - Elements of Time - Function Short Run Law of Variable Proportion Long Run Law of Returns to Scale Cobb-Douglas Product Function 03 Cost, Revenue and Profit 04 CLO-1/3 Short Run Cost output Relationship TFC/TVC/TC/MC/AVC/AFC and AC(ATC) Cost Curves Long Run Cost output Relationship LAC Revenue Total Revenue, Average Revenue And Marginal Revenue Break Even and Profit 03 Market Structure 05 CLO-1 Characteristics of Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly and respective demand curves MODULE Economic Variables and Indicators 06 CLO-2 05 National Income Accounting - Concepts (GDP/BDP/GNP/NNP mp vs, fc) 07 CLO-2

10 Methods of Computation of National Income (Value Added/Income/Expenditure) 02 Inflation: Meaning and Effect Measures to check inflation Monetary/Fiscal and Administrative 08 CLO-2 05 Money and Banking Meaning and Function of Money -Forms of Money in modern time (Currency and Bank Money) Meaning and Functions of Commercial Banks Credit Creation Meaning and Functions of Central Bank/RBI Credit Control Measures - Monetary Policies 02 Public Finance Meaning of Public Finance Government Budgets Revenue Budget and Capital Budgets Government Receipts Revenue and Capital Government Expenditure Revenue Capital Types of Budget Surplus/Deficit and Balanced Types of Deficit Budgets Revenue/Fiscal/Primary 30 Total Number of Lectures 09 CLO-2/3 10 CLO-2/3 Course Assessment Schemes (Course without Laboratory & Tutorial components) Assessment scheme Component weightage Class Test 30% CE Sessional Exam 40% SEE Term Paper/Innovative Assignment 30% Teaching-learning methodology: (Mention the proposed) Lectures: Use of Black board, PPT, Discussion, Case Studies etc. Active learning techniques (Mention the proposed) Relevant Newspaper Articles, Current macro- economic profile of India, latest data related to GDP, employment, inflation and recent policy intervention and tax reforms like GST and its impact on the Indian economy will be discussed

11 Types of Special/Innovative Assignments, Term Papers, mini Projects etc. Problem-solving related to the application of micro and macro economics Timeline - After Sessional Examination till the Semester End Course Material: Course Policy PPTs, Notes, other Material Assignments Web-links, Blogs, Video Lectures, Advanced topics - RBI s current Monetary Policy, Recent Policy Intervention by the Government like Make-in-India, Start-up India programmes, Tax Reforms like GST implementation and its impact on the Indian economy. Course Outcome Attainment: Use of formal evaluation components of continuous evaluation and semester end examination Informal feedback during course conduction