84 9. ECONOMICS APPENDIX. ‘AY (Outlines of Tests) Marks Paper ‘A’: Basic Mathematics and Micro Economies 108 Paper ‘B: Macto Economics and Economic Development of Pakistan 100 Total : 200 APPENDIX ‘BY (Syllabi and Courses of Reading) SECTION- I: BASIC MATHEMATICS 1, FUNCTIONS AND EQUATIONS Parameters G Constants, (i) Functions + Relation vs Function Variable. Types of Functions : Linear and Non-Linear; Exponential and Logarithmic, phical Presentation of Functions. Exaniples from Micro and Macro Eeonomics Yi) Equations : Equations vs entities, Solution of Linear, Quadratic and Simultaneous Equations. Equilibrium Anlaysis in Economies ; Partial Market Fquiti brium ; Linear and Quadratic Models, Equilibnum in National 2. DERIVATIVES The concept of Derivative. ‘The conceps of Limit and its relevance to Deri Slope vs Elasticity of a Function. Rules of Differentiation; A Constant, A power Sum-Difference, Product and Quotient Function Rule The derivation of Marginal Quantities in Economies. ‘The euleulation of Elisticity of Donen and Supply. NCTIONS : 3. MAXIMA AND MINIMA OF FU! Optimum values vs, Exireme Relative Maxim: fiexion, Criteria for Relative Maxima and Minima. F order, Condition. Constrained Optimization. Problems of op‘imization in Economies Profit, Utitity and Revenue \ Cost Minimization, The Equilibrum of a Consumer and a Firm The leas! cost combination of Inputs. SECTION 1: MICRO ECONOMICS J. THE NATURE AND IMPORTANCE OF MICRO ECONOMICS Basic problems of Micro Economic Theory. The Determination of Output com position, The Allocation of Resources, The Distribution of the Product ard the Main- tenance and Expansion to the Productive Capacity of the Economy. Market Yonomy and Minima, point of Ine st order condition and Secon and the Treatment of Basic Economic Problems The Relative Importznce of Market Mechanism in Capitalism, Socialism and Istamic Economic System 2, THE THEORY OF CONSUMER BEHAVIOUR : The Utility Theory of Consumer Bahaviours, Indifference curices Analysi~ Indifference Curves aad Marginal rate of Substitution, Consumer Equilibrium, Income, Sabstitution and Price Efect of a Normal, faferior and Giffen Good, Derivation ofnce Theory, Price, im Price-Consumiption Carve. Revnaled pre es of Demand and thelr Measuremeat, Demand Curve Income and Cx 3, THE THEORY OF PRODUCTION, COSTS AND REVENUES: 9 Elasti The Concept of Production Function. Iso-Quant and Iso-Cost Curves. Marginat Rate of Techni Optimal Combination of Resources. The Costs and Revenus of a Fi 4. THE THEORY OF FIRM BEHAVIOUR AND MARKET ORGANIZATION + (a) Perfect Competition ; Assumptionst of Perfect Competition, Equifibrium of a Firm and Industry during Short and Long periods. Short and Long period Supply Curve of a Firm and Industry. MONOPOLY : he Nature and Extent cf Monopoly. Short-run ond Long-run Equilibrium under Pare Monopoloy. Dumping and Price Discrimination. Welfare effects of (c)_ Imperfect Competition : Monopolistic Composition and lits Main Characteristics. short-run and Long run Equilibrium under Monopolistic Competition, Pricing ard Output Determination uader Obigopely. Price Leardership and Cartels. Ineflicienceies due to Iruperefet Competition 5. PRICING AN D EMPLOYMENT RESOURCES ‘The Mar ginal Productivity Thoory of Resource Pricing. The Modern Theory of Resource pricing and Employment, The input Demand Curve of a Firm with One Variable Resource. The Demand Cur ys of Firm with Several Variable Resources, The Market Demand Curve, The Supply Curve of Resources. Resources Pricing under perfect Competition, Monopoly and Monopsony PAPER-B> MACRO ECONOMICS AND ECONOMIC DEVELOPMENT OF PAKISTAN SECTION - MACRO ECONOMICS I. A FRAME- WORK FOR MACRO ECONOMICS Macto Economies vs Micro Economics. Macro Economic Problems: Unemploy- ment, Tnflation and Growth, DETERMINATION OF NATIONAL INCOME AND EMPLOYMENT (two Sector Economy) : (The Classical Theory Bmploymeat 186 Say's Law of Markets. Aggregate. Demand and.the Quantity Theary of Money. Real Wage Function. Classical Macro Economics System, its Diagramatic representa- tion. Keynesian Critique of the Classical Syste (i), Keynesian Theory of Income and Employment : Equilibrium Level of Netional Income : Saving and Investment Approach ; Con- sumption and Investment Approach. Relation Between Investment and Income. In- vestment Multiplicr. Inflationary and Deflationary Gaps and Full Employment level. 3. DETERMINANTS OF NATIONAL INCOME (Two Sector Economy) @ Consumption Consumption and Saving Functions. Keynesian Psychological Law’ of Consump- tion. Determinants of Consumption, Explanation of the’ Observed Relationship be tween consumption and Income: Relative Income, Permanent Income and Life Cycle Theories of Consumption. Gi) Investment + Investment and Capital Determinants of Javestment. Marginal Eilficieney of Capital (MEC) and Marginal Efficiency of Investment (MED. Optimal Level -of Invest ment. The Principles of Acceleration, 4. GENERAL EQUILIBRIUM IN THE GOODS AND MONEY MARKET: The Derivation of {$ Function in the Goods Market. The Slope and position of its Curve, The Derivation of LM Function in the - Money Market. ‘The Demand for and Supply of Money. The Interest Rate, ‘The Slope sind position of LM Curve. Simul- tancous Equilibrium in the goods and Money Market Adjustments towards Equilibrium. $. FLUCTUATIONS IN NATIONAL INCOME : Business Cycles and their main Features, Interaction of Multiplier and Acceler- rator. Counter-Cyclical Measures, 6 MONETARY INFLUENCE ON INCOME DETERMINATION Monetary Policy: Its Nature, Objectives and Instruments. Influence of Mone. tary Policy on Income Determination (by affecting C+14G), Money and Inflation Stagflation: 7, FISCAL POLICY AND INCOME DETERMINATION : Fiscal Policy : Lis Nature, Objectives and Instruments, The Impact of Govern: ment Expenditure, Taxes and Transfar Payments in the Equilibrium Level of National Income.87 INTERNATIONAL TRADE AND INCOMB DETERMINATION + Theory of Compacative Advantage. Classical and Hecks:her-Ohlia Theory. Balance of Payments. Disequilibrium and Adjustment Policies. Devaluation and Re- valuation, Depreciation und Appreciation of Exchang: Rates. Determination of National Income in a Four Sector Economy. The Foreign Trade Multipliar and Changes in the Level of Income. SECTION - J]: ECONOMIC DEVELOPMENT OF PAKISTAN 1, THE CONCEPT AND MEASUREMENT OF ECONOMIC DEVELOPMENT ‘Main Features of Developing Economy with Special Reference to Pal 2. AGRICULTURE AND INDUSTRY : Relative Importance of Agricultural and Industri: Development of Pakistan. Scctors in the Economie 3. ECONOMIC DEVELOPMENT THROUGH PLANNING : Need and Role of Development Planning. Market Imperfections and Price Dis- tortions. Short Term, Medium Term and Long Term Plans, Formulation of Objectives, Targets and Strategy in Development Planning. 4. ECONOMIC PLANNING IN PAKISTAN Planning Machinery in Pakistan, Justification of Economic Planning in Pakistan, Factors Probibitive in Effective Planning in Pakistan. Main Contours and Critical Evaluation of the Last Five Year Plan (Seventh Five Year Plan) with reference to its Strategies, Objectives, Targets and Achievements. Role of Annual Pianning in Economic Development. 5. RESOURCE MOBILIZATION FOR PLANNED ECONOMIC DEVELOPMENT IN PAKISTAN : @_ Financial Resources Domestic and Foreign Resources of Pakistan. Extent of Pakistan's Dependence on Foreign Aid and Debt Servicing Problem, Gi) Humaa Resources : Human Resource Mobil Planning. zation in Pakistan, The Need and Role of Manpower NOTE __ (@) Ia paper “A four questions will be set from Section-l and six questions f Section-it. The candidates will be required to attempt five questions ia all selecting two questions from Section-I and three question from Section-ll,&8 (#) In Paper “B” six questions will be set from Section+l ané four questions from Section-Il. The candidates will be required to aitempt five questions in alt selecting three questions ftom Section-I and two questions from Section-II. Recommended Bioks : (® Chiang, Alpha C. Fundamental Methods of Mathematical Economics’ 3rd Fdition, (ii) J. Parry Lewis “An Introduction to Mathematics, 2nd Edition. (iii) Ferguson & Gould's "Microeconomic Theory” 6th Edition, (iv) Glahe, Fred R, “Macroeconomics” 2nd Edition (®) Prof, Abdu! Ghani Chaudhary bela jay he ebb! (f) Dr. Muhammad Hussain Chaudhary Ik is hereby notified that the Syndicate at its meeting held on 3-9-1999 approved that inclusion of the following two books of Mr. Muhammad Hanif Aslam as prescribed Readings in B.A./B.Sc. Course. % osclsy (Us! Hae) olathe a2 - SeSly aed aed « (Ges ean) choles ake