ECONOMICS

CLASS - XII (2017-18)


Theory: 80 Marks                                                                                                           Project: 20 Marks

Units   Marks Periods
Part A Introductory Microeconomics     
  Introduction  4 8
  Consumer's Equilibrium and Demand  13 32
  Producer Behaviour and Supply 13 32
  Forms of Market and Price Determination under perfect competition with simple applications  10 28
    40 100
Part B  Introductory Macroeconomics     
  National Income and Related Aggregates  10 28
  Money and Banking  6 15
  Determination of Income and Employment  12 27
  Government Budget and the Economy  6 15
  Balance of Payments  6 15
    40 100
Part C  Project Work  20 20

 

Part A: Introductory Microeconomics


Unit 1: Introduction

Meaning of microeconomics and macroeconomics; positive and normative economics

What is an economy? Central problems of an economy: what, how and for whom to produce; concepts of production possibility frontier and opportunity cost.

Unit 2: Consumer's Equilibrium and Demand

Consumer's equilibrium - meaning of utility, marginal utility, law of diminishing marginal utility, conditions of consumer's equilibrium using marginal utility analysis.

Indifference curve analysis of consumer's equilibrium-the consumer's budget (budget set and budget line), preferences of the consumer (indifference curve, indifference map) and conditions of consumer's equilibrium.

Demand, market demand, determinants of demand, demand schedule, demand curve and its slope, movement along and shifts in the demand curve; price elasticity of demand - factors affecting price elasticity of demand; measurement of price elasticity of demand – percentage-change method.

Unit 3: Producer Behaviour and Supply

Meaning of Production Function – Short-Run and Long-Run

Total Product, Average Product and Marginal Product.

Returns to a Factor

Cost: Short run costs - total cost, total fixed cost, total variable cost; Average cost; Average fixed cost, average variable cost and marginal cost-meaning and their relationships.

Revenue - total, average and marginal revenue - meaning and their relationship.

Producer's equilibrium-meaning and its conditions in terms of marginal revenue-marginal cost. Supply, market supply, determinants of supply, supply schedule, supply curve and its slope, movements along and shifts in supply curve, price elasticity of supply; measurement of price elasticity of supply - percentage-change method.

Unit 4: Forms of Market and Price Determination under Perfect Competition with simple applications.

Perfect competition - Features; Determination of market equilibrium and effects of shifts in demand and supply.

Other Market Forms - monopoly, monopolistic competition, oligopoly - their meaning and features.

Simple Applications of Demand and Supply: Price ceiling, price floor.

Part B: Introductory Macroeconomics


Unit 5: National Income and Related Aggregates

Some basic concepts: consumption goods, capital goods, final goods, intermediate goods; stocks and flows; gross investment and depreciation.

Circular flow of income (two sector model); Methods of calculating National Income - Value Added or Product method, Expenditure method, Income method.

Aggregates related to National Income:

Gross National Product (GNP), Net National Product (NNP), Gross and Net Domestic Product (GDP and NDP) - at market price, at factor cost; Real and Nominal GDP.

GDP and Welfare

 

Unit 6: Money and Banking 

Money - meaning and supply of money - Currency held by the public and net demand deposits held by commercial banks.

Money creation by the commercial banking system.

Central bank and its functions (example of the Reserve Bank of India): Bank of issue, Govt. Bank, Banker's Bank, Control of Credit through Bank Rate, CRR, SLR, Repo Rate and Reverse Repo Rate, Open Market Operations, Margin requirement.

 

Unit 7: Determination of Income and Employment

Aggregate demand and its components.

Propensity to consume and propensity to save (average and marginal).
Short-run equilibrium output; investment multiplier and its mechanism.

Meaning of full employment and involuntary unemployment.

Problems of excess demand and deficient demand; measures to correct them - changes in government spending, taxes and money supply.

Unit 8: Government Budget and the Economy

Government budget - meaning, objectives and components.

Classification of receipts - revenue receipts and capital receipts; classification of expenditure – revenue expenditure and capital expenditure.

Measures of government deficit - revenue deficit, fiscal deficit, primary deficit their meaning.

Unit 9: Balance of Payments

Balance of payments account - meaning and components; balance of payments deficit-meaning.

Foreign exchange rate - meaning of fixed and flexible rates and managed floating.

Determination of exchange rate in a free market.

I. Project (Option One) : What’s Going Around Us


The purpose of this project is to – 

  • Enable the student to understand the scope and repercussions of various Economic events and happenings taking place around the country and the world. (eg. The Dynamics of the Goods & Services Tax and likely impacts on the Indian Economy or the Economics behind the Demonetisation of 500 and 1000 Rupee Notes and the Short Run and Long Run impact on the Indian Economy or The impact of BREXIT from the European Union etc.) 
  • Provide an opportunity to the learner to develop economic reasoning and acquire analytical skills to observe and understand the economic events. 
  • Make students aware about the different economic developments taking place in the country and across the world. 
  • Develop the understanding that there can be more than one view on any economic issue and to develop the skill to argue logically with reasoning. 
  • Compare the efficacy of economic policies and their respective implementations in real world situations and analyse the impact of Economic Policies on the lives of common people. 
  • Provide an opportunity to the learner to explore various economic issues both from his/her day to day life and also issues which are of broader perspective.

 

Marking Scheme: Marks are suggested to be given as –

S. No.  Heading Marks Allotted 
1 Relevance of the topic  3
2 Knowledge Content/Research Work  6
3 Presentation Technique  3
4 Viva 8
  Total 

20 Marks

 

II. Project (Option Two): Analyse any concept from the syllabus


The purpose of this project is to – 

  • Develop interest of the students in the concepts of Economic theory and application of the concept to the real life situations. 
  • Provide opportunity to the learners to develop economic reasoning vis-a-vis to the given concept from the syllabus. 
  • Enable the students to understand abstract ideas, exercise the power of thinking and to develop his/her own perception 
  • To develop the understanding that there can be more than one view on any economic issue and to develop the skill to argue logically with reasoning 
  • Compare the efficacy of economic policies in real world situations 
  • To expose the student to the rigour of the discipline of economics in a systematic way 
  • Impact of Economic Theory/ Principles and concepts on the lives of common people

Marking Scheme:
Marks are suggested to be given as – 

 

 

S. No.  Heading Marks Allotted 
1 Relevance of the topic  3
2 Knowledge Content/Research Work  6
3 Presentation Technique  3
4 Viva 8
  Total     20 Marks

 The external examiner should value the efforts of the students on the criteria suggested.
Suggested List 

  • Price Determination 
  • Price Discrimination 
  • Opportunity Cost 
  • Production Possibility Curve 
  • Demand and its determinants 
  • Supply and its determinants 
  • Production – Returns to a Factor 
  • Cost function and Cost Curves  .
  • Monopoly 
  • Oligopoly 
  • Monopolistic Competition 
  • Credit Creation 
  • Money Multiplier 
  • Central Bank and its functions 
  • Government Budget & its Components 
  • Budget deficit 
  • Exchange Rate Systems 
  • Foreign Exchange Markets 
  • Balance of payments 
  • Any other topic

About the author
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Ritu Sagar