Paper 4 : Business Economics (60 Marks)

PART I : BUSINESS ECONOMICS (60 Marks)

• Introduction to Business Economics
  (i) Nature and scope of Business Economics
  (ii) Basic Problems of an Economy and Role of Price Mechanism.
• Theory of Demand and Supply
  (i) Meaning and determinants of demand, Law of demand and Elasticity of demand – Price, income and cross elasticity
  (ii) Theory of consumer’s behaviour – Marshallian approach and Indifference curve approach
  (iii) Demand Forecasting
  (iv) Meaning and determinants of supply, Law of supply and Elasticity of supply.
• Theory of Production and Cost
  (i) Meaning and Factors of production
  (ii) Laws of Production – The Law of Variable proportions and Laws of Returns to Scale, Producer’s equilibrium
  (iii) Concepts of Costs – Short-run and long-run costs, Average and marginal costs, Total, Fixed and variable costs.
• Price Determination in Different Markets
  (i) Various forms of markets – Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly.
  (ii) Price determination in these markets.
• Business Cycles
  (i) Meaning
  (ii) Phases
  (iii) Features
  (iv) Causes behind these Cycles