MAHARASHTRA NATIONAL LAW UNIVERSITY, NAGPUR

Course Outline

BBA3.4: ECONOMICS-I (PRINCIPLES OF

ECONOMICS)
B.B.A.LL.B. Five-Year Integrated Degree Course Academic
Session: 2022-2023
nd
2 YEAR, SEMESTER-III

Designed and Developed by:

Mr. Sumit Kumar Malviya
Assistant Professor of Economics

Course Instructor:
Mr. Mayur Garud
Assistant Professor of Economics

July 2022
(Strictly for Private Circulation)
 ECONOMICS-I (PRINCIPLES OF ECONOMICS)
Semester-III July-December 2022
Course Code BAL3.4
Course Credit 3
Maximum Marks 100
Teaching Hours 48
Presentation Hours 10-12
Medium of Instruction English
Course Compulsory

Introduction
The significance of a subject predominantly depends on its degree of utility for the
Humanity. Human behavior and its rationality form the very basis of Economics. Its
incisive approach, systematic exposition of concepts and effective problem-solving
methods makes it worthwhile and indeed the queen of Social Sciences. In the words of an
eminent British Economist Prof. Lionel Robbins, “Economics is a science which studies
human behaviour as a relationship between ends and scarce resources which have
alternative uses.” In general, this branch of Social Science attempts to analyze the logic and
reasoning of people’s choice and these individual choices eventually culminates in societal
choices. This science of optimization is rapidly gaining currency in the current era of
globalization. The vitality and relevance of Economics in India got a fillip after the new
economic reforms in early nineties. The rigorous economic thinking as per the new
dynamics since then has been able to answer many persistent problems of our country. The
Economic Theory stands on two main pillars
- Microeconomics and Macroeconomics. All major fundamental concepts of Economics are
covered in these two roots of the subject. Microeconomics deals with individual economic
units and their economic behavior and decisions. It is like studying the economy through a
magnifying glass. Macroeconomics, on the other side, is a study of economic aggregates,
analyzing the behavior of the economy as a whole. The thrust of this course is towards the
preparation for ‘Economic Analysis of Law’ and is this pursuit, Microeconomics provide
effective tools of reasoning, analysis and application. The role of Macroeconomics is to
build a significant awareness about the economic environment, its nature and functioning
of the economy. Apart from these two roots, Public Finance, International Economics, and
Economics of Growth and Development expands the horizon of student’s knowledge about
the Principles of Economics and enhance the applicability of the subject. Such knowledge
and awareness help a scholar of Law to understand the basis matrix and environment in
which laws are framed and exercised. The interface between Law and Economics is more
relevant today when India has ushered into an era of economic liberalization, privatization
and globalization. This disruption has triggered the creative destruction and transformation
of Indian Economy in tandem with the world economy. Indian Economy is rapidly moving
on the path of development and therefore, all wings of the macro system including the legal
domain is expected to contribute effectively towards this cause. This course is designed to
cater these essential needs and it is also a prerequisite for the Economics-II: Law and
Economics course placed in the next semester.
The course is spread over four modules, such that Module I introduce the subject
Economics and describes the principles of Microeconomics; Module II deals with the
principles of Macroeconomics; Module III is about economic growth and development as
well as regulatory economics; and Module IV attempts to explain the basics of Indian
economy along with its contemporary issues and challenges.
Course Objectives
The course is designed in such a way that no prior acquaintance with the subject is
required for a beginner. The primary goal of the course is to give the students with a clear
understanding of the basic concepts and economic tools of analysis so that a student of law
can use these for the Economic analysis of Law. The objectives of the course are to -
 inculcate an understanding of fundamental principles and essential concepts of
Economics and develop skills of economic reasoning and analysis;
 decipher the basic principles and concepts of Microeconomics;
 understand the basic principles and concepts of Macroeconomics;
 analyse the fundamental concepts of economic development and regulatory
economics; and
 explore the characteristics and functioning of an Indian economy and its various
economic units.
Teaching Methodology
The teaching will be focused on participatory teaching which includes classroom
lecture and also inputs from the students. There will be a thorough discussion on all topics
and concepts. In order to develop independent critical thinking, the teacher will also
discuss selected topics through relevant case studies. To enhance research aptitude,
individual project topics are allotted to students in advance. The students will prepare their
topics from the list of sources suggested to them under the supervision of the teacher-in-
charge of the subject. In the classroom every student is required to present his/her project
topic through seminar presentation and to have his/her doubt cleared through discussion.
The teacher will guide the students in their pursuit of learning the fundamentals of
Economics and clarify doubts and queries of students, if any, and put forward suggestions
for further reading. The topics will be taught through teaching aids like power point
presentation and white board. Emphasis will be on the use of graphs, diagrams and flow
charts for exposition. The faculty is expected to draw examples from the surrounding world
to clarify the concepts.
Course Evaluation Method
The course is assessed for 100 marks with a close examination system. There shall be a
Mid-Semester Examination for 20 marks of 75 minutes duration and an End Semester
Examination for 50 marks of 2 hours duration. 25 marks are assigned for the project (out of
which 20 marks for the written reports and 5 marks for the presentation) and 5 marks for
the attendance.
Course Outcome
The course is designed with propose to train law students with the fundamental
principles and concepts of Economics. Moreover, the course serves the law student with
economic reasoning and analysis essential to understand complex nature of economy and
its various segments. However, its outcomes are multidimensional. On completion of the
course, the students will be able to -
 understand and analyse the fundamental principles and concepts of Economics as
well as various aspects of Indian economy;
 understand the economic behaviour of various economic agents like consumers and
producers and the rationality behind their decisions in the market;
 build an understanding of the principles and concepts in Macroeconomics;
 analyse the basics of economic development and regulatory principles of economy;
and
  interpret the fundamental structure of Indian economy and role of its different sectors.
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COURSE CONTENTS
Module-I: Principles of Microeconomics [Teaching Hours 12]
1.1 Introduction to Economics: Definitions, Nature and Scope; Basic methods and tools;
Inter-relationship with Law.
1.2 Consumer Behaviour: Utility Analysis; Elasticity and its Application; Consumer
Equilibrium,
1.3 Production and Cost: Supply Analysis; Production Functions; Types of Cost, Cost of
production and Cost Curves.
1.4 Theory of Markets: Market Mechanism, Perfect and Imperfect Competition, Price
and Output determination of a Firm.
1.5 Theory of Distribution: Factors of Production, Theories of Wage, Rent, Interest and
Profit.
Compulsory Readings
 Anindya Sen, MICROECONOMICS: THEORY AND APPLICATIONS, Oxford
University Press, 2nd Edition, 2015, Ch.1 (Introduction) pp. 1-7. Ch.2 (Demand and
Supply) pp.9-23; Ch.3 (The Theory of Consumer Choice) pp.27-44.
 H.L. Ahuja, ADVANCED ECONOMIC THEORY, S. Chand Publications, 20th
Revised Edition 2014, Part I (The Nature and Scope of Economic Theory), pp. 3-67.
Part II (Demand Analysis and Theory of Consumer’s Choice) pp. 97-243.
 Karl E. Case, Ray C. Fair, Sharon Oster, PRINCIPLES OF ECONOMICS, Pearson
India Education Services Pvt. Ltd., 12 thEdition, 2018, Ch.1(The Scope and Method of
Economics) pp.1-23; Ch.2(The Economic Problem: Scarcity and Choice) pp.25- 44,
Ch.3(Demand, Supply and Market Equilibrium) pp.45-72; Ch.4(Elasticity) pp.73-90.
 Paul A. Samuelson and William D. Nordhaus, ECONOMICS, McGraw Hill Education
(India) Pvt. Ltd., New Delhi, India, 19th Edition 2010, Ch.1(The Central Concepts of
Economics) pp.3-29.
 Robert Pindyck and Daniel Rubinfeld, MICROECONOMICS, Pearson Publication, 8 th
Edition, 2017, Ch.1 (Preliminaries) pp.28-42, Ch.2 (The Basics of Supply and
Demand) pp.45-84. Ch.3 (Consumer Behavior) pp.91-129.
Suggested Readings
 A. Koutsoyiannis, MODERN MICROECONOMICS, Macmillan Press Ltd., London,
UK, 2nd Edition, 1979.
 Joseph Stiglitz and Carl Walsh, ECONOMICS, W.W. Norton and Company, London,
UK, 1st Edition, 2010.

Module-II: Principles of Macroeconomics [Teaching Hours 12]

2.1 National Income: Circular flow of Income, Variants of National Income, Methods of
measuring national Income.
2.2 Keynesian Theory of Income and Employment: Keynesian Equilibrium,
Consumption and Investment Function; Multiplier Effect.
2.3 Monetary Economics: Kinds of Money, Money Demand, Money Supply; Inflation;
Monetary Policy.
2.4 Public Finance: Public Expenditure, Revenue and Debt, Public Budget, Deficit
Financing, Fiscal Policy.
2.5 International Economics: Theories of International Trade; Balance of Payments,
Exchange Rates; Dumping, Protectionism.
Compulsory Readings
 Soumyen Sikder, PRINCIPLES OF MACROECONOMICS, Oxford University
Press, 2nd Edition, 2011, Ch.2-9, pp.18-162.
 Suraj B. Gupta, MONETARY ECONOMICS: INSTITUTIONS, THEORY AND
POLICY, S. Chand Publications 4th Edition, 2006, Part I (Institutions) pp.3-18, 37-
81, 82-112, Part II (Theory), pp.179-315, Part III (Policy) pp.337-378.
 Dominick Salvatore, INTERNATIONAL ECONOMICS, Wiley India Pvt. Ltd. New
Delhi, India, International Student Version, 10th Edition 2014, Ch.2 (The Law of
Comparative Advantage) pp.31-51; Part II (International Trade Policy) pp.239-320;
Part III (The Balance of Payments, Foreign Exchange Markets and Exchange Rates)
pp.433-483,505-520.
 H.G. Mannur, INTERNATIONAL ECONOMICS, Vikas Publication House Pvt.
Ltd. Noida, 2nd Edition, 2013, Part II (Balance of Payments and Foreign Exchange
Rate) pp.227-453.
 Edward Shapiro, MACROECONOMIC ANALYSIS, Galgotia Publications, New
Delhi, 5th Edition, 2011, Part I (Introduction: Measurement and Concepts) pp.1-60,
Part II (The Simple Keynesian Model of Income Determination) pp.65-124; Ch.11
(The Supply of and Demand for Money and the Rate of Interest) pp.204-233; Ch.20-
23, pp.425-543; Ch.26 (Monetary Policy) pp.588-615.
Suggested Readings
 Paul A. Samuelson and William D. Nordhaus, ECONOMICS, McGraw Hill
Education (India) Pvt. Ltd., New Delhi, 19th Edition 2010.
 Joseph Stiglitz and Carl Walsh, ECONOMICS, W.W. Norton and Company,
London, UK, 1st Edition, 2010.
 Karl E. Case, Ray C Fair, Sharon C Oster, PRINCIPLES OF ECONOMICS, Pearson
India Education Services Pvt. Ltd., 12th Edition, 2018.

Module-III: Economics of Growth, Development and Regulation [Teaching Hours 12]

3.1 Economic Growth and Development: Concepts of Economic Growth and
Development, Measures and Determinants of Economic Growth and Development;
Sustainable Development.
3.2 Theories of Economic Growth and Development: Neoclassical and Modern
Theories of Economic Growth and Development.
3.3 Business Cycle: Phases of Business Cycle, Theories of Business Cycles; Economic
Stabilization.
3.4 Market Failure: Externalities, Public Good, Tragedy of Commons, Lemons Market,
Adverse Selection, Asymmetric Information, Moral Hazard.
3.5 Regulation of Markets: Regulation of Cartel and Monopoly; Regulation and Market
Efficiency. Equity-Efficiency Tradeoff; Arrow’s Impossibility Theorem.
Compulsory Readings
 A.P. Thirlwall, GROWTH AND DEVELOPMENT WITH SPECIAL REFERENCE
TO DEVELOPING ECONOMIES, Macmillan Press Ltd., London, UK, 6 th Edition,
1999, Part I (Development and Underdevelopment) pp.3-123; Part II (Factors in the
Development Process) pp.124-172; Part III (Obstacles to Development) pp.173-215;
Part IV (The Role of the State, The Allocation of Resources, Sustainable
Development and The Choice of Technique) pp.216-324.
 Debraj Ray, DEVELOPMENT ECONOMICS, Princeton University Press, New
Jersey, USA, 1st Edition, 1998, Ch.2 (Economic Development) pp.21-53; Ch.3
(Economic Growth) pp.54-94; Ch.6 Economic Inequality) pp.148-170; Ch.7
(Inequality and Development: Interconnections) pp.171-210.
 Karl E. Case, Ray C. Fair, Sharon C. Oster, PRINCIPLES OF ECONOMICS,
Pearson India Education Services Pvt. Ltd., 12th Edition, 2018, Ch.16 (Externalities,
Public Goods and Common Resources) pp.360-382; Ch.17(Uncertainty and
Asymmetric Information) pp.382-397.
 Anindya Sen, MICROECONOMICS: THEORY AND APPLICATIONS, Oxford
University Press, New Delhi, India, 2nd Edition, 2007, Ch.14 (Externalities and
Public Goods) pp.221-234; Ch.15 (Uncertainty and Information) pp.234-255.
Suggested Readings
 Joseph Stiglitz and Carl Walsh, ECONOMICS, W.W. Norton and Company,
London, UK, 1st Edition, 2010
 Todaro and Smith, ECONOMIC DEVELOPMENT, Pearson Education, Boston,
USA, 11th Edition 2012.

Module-IV: Fundamentals of Indian Economy [Teaching Hours 12]

4.1 Structure of Indian Economy: Nature and Characteristics of Indian Economy;
Demography, Underdevelopment and Poverty.
4.2 Agricultural Sector: Nature and Role, Agricultural productivity and Output, Food
Security, Agricultural Pricing and Finance, Land reforms.
4.3 Industrial and Services Sector: Industrial Pattern, Large Industries and Micro, Small
and Medium Enterprises, Growth Contribution of Services sector, Industrial Policy.
4.4 Economic Planning: Rationale, Objectives and Features, Strategies of Indians
Development Plans, Regional Imbalances.
4.5 Economic Reforms: Generations of Economic Reforms, Liberalization, Privatization
and Globalization of Indian Economy, Economic Reforms and Social Justice.
Compulsory Readings
 Puri and Misra, INDIAN ECONOMY, Himalaya Publishing House, Mumbai, 35th
Edition, 2017.
 Uma Kapila, INDIAN ECONOMY: PERFORMANCES AND POLICIES,
Academic Foundation, 19th Revised Edition, 2018.
 Dutt and Sundaram, INDIAN ECONOMY, S. Chand Publication, New Delhi, 2017.
Suggested Readings
 Montex Singh Ahluwalia, BACKSTAGE - THE STORY BEHIND INDIA’S HIGH
GROWTH YEARS, Rupa Publications, New Delhi, 2020.
 Jean Drèze and Amartya Sen, AN UNCERTAIN GLORY: INDIA AND ITS
CONTRADICTIONS, Princeton University Press, New Jersey, 2013.
 Raghav Bahl, SUPER CENTURY - WHAT INDIA MUST DO TO RISE BY 2050,
Penguin Random House India, 2019.

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