SYLLABUS CLASS XII ECONOMICS - 2014-15

Part A                                            PERIODS            MARKS.

1 Introduction                                          11                      6

2 Consumer's Equilibrium and Demand      34                    16

3 Producer Behaviour and Supply              34                   16

4 Forms of Market and Price Determination 

under perfectcompetition with simple 

applications                                                 31                12                  

                                                      

                                                                110                      50

Part B Introductory Macroeconomics

5 National Income and Related Aggregates       32                    15

6 Money and Banking 18 8

7 Determination of Income and Employment      27                 12

8 Government Budget and the Economy 1          7                    8

9 Balance of Payments                                     16                   7

                                                                     110                  50

Part A: Introductory Microeconomics

Unit 1: Introduction                                   11 Periods

Meaning of microeconomics and macroeconomics

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 34 Periods

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, movement along and

shifts in the demand curve; price elasticity of demand - factors affecting price elasticity of demand;

measurement of price elasticity of demand - (a) percentage-change method and (b) geometric method (linear

demand curve); relationship between price elasticity of demand and total expenditure.

Unit 3: Producer Behaviour and Supply            34 Periods

Production function: Total Product, Average Product and Marginal Product.

Returns to a Factor.

238

Cost and Revenue: Short run costs - total cost, total fixed cost, total variable cost; Average fixed cost, average

variable cost and marginal cost-meaning and their relationship.

Revenue - total, average and marginal revenue.

Producer's equilibrium-meaning and its conditions in terms of marginal revenue-marginal cost.

Supply, market supply, determinants of supply, supply schedule, supply curve, movements along and shifts in

supply curve, price elasticity of supply; measurement of price elasticity of supply - (a) percentage-change

method and (b) geometric method.

Unit 4: Forms of Market and Price Determination under Perfect Competition with simple applications.     31 Periods

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     32 Periods

Some basic concepts: consumption goods, capital goods, final goods, intermediate goods; stocks and flows;

gross investment and depreciation.

Circular flow of income; 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; National Disposable Income (gross and net), Private Income, Personal

Income and Personal Disposable Income; Real and Nominal GDP.

GDP and Welfare

Unit 6: Money and Banking                            18 Periods

Money - its meaning and functions.

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, Controller 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  27 Periods

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.

239

Problems of excess demand and deficient demand; measures to correct them - change in government

spending, availability of credit.

Unit 8: Government Budget and the Economy           17 Periods                                                    

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                                16 Periods

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.

Prescribed Books:

1. Statistics for Economics, Class XI, NCERT

2. Indian Economic Development, Class XI, NCERT

3. Introductory Micro Economics, Class XII, NCERT

4. Macro Economics, Class XII, NCERT

5. Supplementary Reading Material in Economics, Class XII, CBSE