BASICS OF

ECONOMICS
HS2301
 COURSE OBJECTIVES
The main aim of this course is to make students understand
how society manages its scarce resources for achieving
maximum satisfaction.

To make the students learn about economic aspects related to

a consumer, firm, market and economy.
 TOPICS TO BE COVERED
Introduction to Economics: Nature of Economics, Economic thoughts, Economic activities,
Relationship of Economics with other Social Sciences and Engineering.

Demand: Types, Law of Demand, Demand Supply Curve, Determinants of Demand, Change
in Demand and case studies.

Elasticity of Demand: Nature, Degrees, Types, Factors affecting Elasticity and its
application in present scenario.

Laws of Consumption: Concept and applicability of Law of Diminishing Marginal Utility

and Law of Equi- Marginal Utility.

Cost: Concept, types, Cost and Output Decisions,

Production: Concept, Scale of Production, Law of Variable Proportion, Returns to Factor

and Returns to Scale: Causes and Implications
Economies and Diseconomies of Scale: Concept and Types Relevance of Production and
Cost concepts in present context

Market: concept and types (Perfect Competition, Monopoly and Monopolistic Competition)
Nature and Relevance of different markets in present scenario- Case Study

Basic Macro Economics: Concepts, Importance, Interest Rates Determination, Sources of

Interest Rate Differentials, Unemployment and Full Employment

Profit Concept: Functions of Profit; Economic Profit and Accounting Profit.

National Income: Concept and Measurement Methods, Determination of Equilibrium of

Income.

Inflation: Causes and effect of Inflation, Measures to Control Inflation, Case Study on Impact
of Inflation

Economic Policies: Types, Instruments, Role in a Developing Country

Money: Functions; Determination of Money supply.

 COURSE OUTCOME

• The students are expected to apply engineering knowledge

to maximize profit, satisfaction and welfare.

• The students are able to identify the forces that affect the
economy.
 WHAT IS
ECONOMICS?

Economics is the study of how individuals and societies choose to

use the scarce resources that nature and previous generations have
provided.

According to L. Robbins, K.E.Case,

‘’Economics is a science that studies human behaviour as a
relationship between ends and scarce means which have
alternative uses’’.
 WHY TO STUDY ECONOMICS?
1. It will help you understand the world in which you live.
⚫ Why are apartments so hard to find in New York City?

⚫ Why do airlines charge less a particular time?

⚫ Why do some countries have high rates of inflation while others have
stable prices?

⚫ Why are jobs easy to find in some years and hard to find in others?
 Cont..
2. It will make you a wiser participant in the economy.

⚫ During your lifetime, you make many economic decisions.

⚫ Once you take a job, you decide how much of your income to spend,
how much to save and how much to invest.

⚫ You might run a small business or a large corporation wherein you will
decide what prices to charge for your products.
 Cont..
3. It will give you a better understanding of the potential
and the limits of the Economic policy.

⚫ As a voter, you help choose the policies that guide the

allocation of society’s resources.

⚫ When deciding which policies to support, you may find

yourself asking various questions about Economics.

⚫ What are the burdens associated with alternative forms of

taxation?
⚫ What are the effects of free trade with other countries?
⚫ How does a government budget deficit affect the economy?
WHY TEACH ECONOMICS TOENGINEERS ?
•To help engineers make best possible use of scarce resources to provide maximum
satisfaction to consumers, producers and economy.

•To identify what factors influence utility and demand of products that engineers
develop.

•To learn about basic economic problems ---

What to produce?
How to produce ?
For whom to produce?

•To learn about the concepts of cost and production which could help them to
produce maximum at minimum cost.
The principles of economics can be applied in many of life’s
situations.
Whether the future finds you

• reading the newspaper

• running a business
• leading a nation
Thank You.