ECON-121

ECON 121 : FUNDAMENTALS OF AGRICULTURAL ECONOMICS
Credit: 2(2+0)

THEORY:
Economics: Meaning, scope and subject matter, definitions, activities, approaches to economic analysis; micro and macroeconomics, positive and normative analysis. Nature of economic theory; rationality assumption, concept of equilibrium, economic laws as generalization of human behavior. Basic concepts: Goods and services, desire, want, demand, utility, cost and price, wealth, capital, income and welfare.
Agricultural economics: meaning, definition, characteristics of agriculture, importance and its role in economic development. Agricultural planning and development in the country.
Demand: meaning, law of demand, demand schedule and demand curve, determinants, utility theory; law of diminishing marginal utility, equi-marginal utility principle. Consumer’s equilibrium and derivation of demand curve, concept of consumer’s surplus. Elasticity of demand: concept and measurement of price elasticity, income elasticity and cross elasticity.
Production: process, creation of utility, factors of production, input output relationship.

Laws of returns: Law of variable proportions and law of returns to scale.
Cost: Cost concepts, short run and long run cost curves. Supply: Stock v/s supply, law of supply, supply schedule, supply curve, determinants of supply, elasticity of supply.
Market structure: meaning and types of markets, basic features of perfectly competitive and imperfect markets. Price determination under perfect competition; short run and long run equilibrium of firm and industry, shut down and break even points.
Distribution theory: meaning, factor market and pricing of factors of production. Concepts of rent, wage, interest and profit.
National income: Meaning and importance, circular flow, concepts of national income accounting and approaches to measurement, difficulties in measurement.

Population: Importance, Malthusian and Optimum population theories, natural and socio-economic determinants, current policies and programmes on population control.
Money: Barter system of exchange and its problems, evolution, meaning and functions of money, classification of money, money supply, general price index, inflation and deflation.

Banking: Role in modern economy, types of banks, functions of commercial and central bank, credit creation policy.
Agricultural and public finance: meaning, micro v/s macro finance, need for agricultural finance, public revenue and public expenditure. Tax: meaning, direct and indirect taxes, agricultural taxation, VAT.

Economic systems: Concepts of economy and its functions, important features of capitalistic, socialistic and mixed economies, elements of economic planning.