Economics - XII Syllabus

Part A: Microeconomics

UNIT 1: ELASTICITY AND ITS MEASUREMENT (10 TH)

• Review of demand and supply curves
• Concept of elasticity of demand and its types: Price, income and cross elasticity of demand Degrees of price elasticity of demand
• Determining factors of price elasticity of demands
• Measurement of price elasticity: Total outlay method and point method (linear case only)
• Elasticity of supply

UNIT 2: THEORY OF CONSUMER BEHAVIOUR (13 TH)

• Concept of cardinal utility: Total utility and marginal utility
• Law of diminishing marginal utility
• Law of substitution
• Consumer’s surplus: Concept and importance

UNIT 3: THEORY OF PRODUCTION (10 TH)

• Concept of production function (short and long run)
• Total, average and marginal products and their derivation
• Law of variable proportions
• Returns to scale

UNIT 4: MARKET, REVENUE AND COST CURVES (15 TH)

• Concepts of market: Perfect competition, monopoly and imperfect competition
• Concepts of total, average and marginal revenue
• Derivation of average revenue and marginal revenue from total revenue curve under perfect competition and monopoly
• Fixed cost, variable cost, and total cost; average and marginal costs
• Concepts of short run and long run costs
• Derivation of short run cost curves

UNIT 5: THEORY OF PRICE AND OUTPUT DETERMINATION (12 TH)

• Equilibrium of firm: TR=TC and MR=MC approaches
• Meaning, features and price and output determination under
• perfect competition (firm and industry)
• Meaning, features & price & output determination under monopoly

UNIT 6: FACTOR PRICING (15 TH)

• Rent: Concept of economic rent and contract rent; Ricardian theory of rent
• Wage: Money wage and real wage; subsistence wage theory; wage fund theory
• Interest: Gross and net interests; classical theory of interest
• Profit: Gross and net profits; risk and uncertainty bearing theories of profit

Part B: Macroeconomics

UNIT 7: BASIC CONCEPT (6 TH)

• Meaning of microeconomics, closed and open economy, and macro-economic variables

UNIT 8: NATIONAL INCOME ACCOUNTING (10 TH)

• Gross Domestic Product (GDP), Gross National Product (GNP), National Income (NI), Net National Product (NNP), Personal Income (PI), Disposable Income (DI), and Per Capita Income
• Nominal and real GDP: Difference and calculations; GDP deflator
• Circular flow of income
• Measurement of national income: Product, income and expenditure methods
• Difficulties in measuring national income

UNIT 9: MONEY (10 TH)

• Meaning, importance, functions and forms of money
• Value of money
• Quantity theory of money (Fisher’s equation)
• Inflation and deflation: Meaning, causes and consequence

UNIT 10: BANKING (11 TH)

• Role of banking system economy
• Classification of banks: Central bank, commercial be development banks
• Functions of central bank with special reference Rastra Bank
• Functions of commercial banks with reference to commercial banks in Nepal
• Concepts of money market and capital market

UNIT 11: GOVERNMENT FINANCE (20 TH)

• Concept and importance of government finance
• Government expenditure: Importance and classification (with references of Nepal)
• Government of revenue: Tax and non-tax sources, concept of direct and indirect taxes; concepts of progressive proportional, and regressive taxes, characteristics of a tax system; its sources in Nepal
• Government borrowing: Concepts of internal borrowing
• Government Budget: Meaning and steps in budget formulation

UNIT 12: INTERNATIONAL TRADE (18 TH)

• Concept and importance of international trade
• Balance of trade: Surplus, deficit and balance
• Concept and importance balance to payment
• Free trade and protectionism: Advantages and disadvantages
• Nepal’s foreign trade: Growth, composition, and direction: its problems
• Ricardian comparative cost theory of international trade
• General introduction to WTO and SAFTA

SCHEME OF EVALUATION