Course Policy Course Code Course Title

Course Policy Course Code Course Title

Course Policy Course Code Course title

Nirma University

Institute of Technology

Mathematics and Humanities Department

Course Policy Template

B. Tech / Semester - IV (CE/EE/IC/IT) Academic Year: 2017-18 - Even

Course Code & Name / : / SS341 – Economics for Engineers
Credit Details / : / 2-0-0-2
Course Co-ordinator / : / Dr. Paramasivan S Vellala
Contact No. & Email / : / 9408133915 –
8469921362 -
Office / : / B-100
Course Faculty / : / Dr. Paramasivan S Vellala
Dr. Samir K Mahajan
Course Blog / : /

1.Introduction to Course

1.1 Importance of the course

This subject helps the students to understand, analyse and evaluate the economic efficiency of engineering projects. It helps the students to acquire knowledge regarding fundamental economic principles like the principle of marginal, opportunity cost, trade-off, rationality etc. which can help them to allocate the scarce resources effectively. This subject will act as catalyst agent to understand the market failure due to externalities or market power and how the nation’s progress or standard of living of the people is measured.

1.2 Objective of the Course

This subject is introduced with an objective of enabling budding engineers to resort to economic way of thinking and marginal reasoning while analyzing engineering projects. They will also learn how to achieve the economic efficiency, commercial feasibilities and the cost effectiveness of projects on hand. They will also understand the macro-economic environment under which the firm operates and how it influences the decision making process of a firm

1.3 Pre-requisite:

Since this is a fundamental course not pre-requisite is necessary.

2.Course Learning Outcomes (CLO)

CLOs are clear statements of the expectations for student achievements in the course.

After the successful completion of the course, students will be able to

  • understand the basic principles and theory of economics
  • analyse macro - economic policies
  • evaluate the economic efficiency in engineering projects

3.Syllabus

Economics for Engineers [2 - - 2]

SS341

Module: - 1 MICRO ECONOMICS

1. Basic Economic Concepts: Meaning and understanding of basic economic concepts

2. Demand and Supply: Meaning and Determinants of Demand and Supply, Law of Demand and Supply, Elasticity of Demand and Supply.

3. Production Function: Meaning, production with one variable input, the law of variable proportion, the laws of returns to scale. Economies of Scale

4. Cost Function: Different types of costs, the short run and long run cost functions.

5. Market Structure: Meaning and characteristics of different types of market –

Perfect Competition

Monopoly

Monopolistic Competition and

Oligopoly

Module-2 MACRO ECONOMICS

6. Introduction to Macro Economics: Basic Macro Economic Concepts, National Income Accounting, Concepts of National Income and Methods of National Income Computation

7. Inflation: Meaning, types, causes, effect and remedial measures.

8. Money and Banking: Meaning and Functions of money, Money Supply, Commercial Banks and Central Bank-Meaning and Functions

9. Public Finance: Government Expenditure, Receipts, Budget and Deficits.

Self -Study: The self -study contents will be declared at the commencement of semester. Around 10% of the questions will be asked from self study contents.

3.1.Self-Study – Students can further explore themselves the following concepts related to fundamental micro and macro economics

Words / Word Meaning / Related Chapter
Economic Efficiency / When applied to the community, it implies that an activity should undertaken if the sum of the benefits derived there from should exceed the cost of such activity and therefore no activity should be undertaken if the cost thereof exceed the benefit there from / Introduction
Macro Economics / That branch of economics which explain the aggregate economic behavior of an economy – the aggregate demand, the aggregate supply, national income, inflation, business cycle etc. / Introduction
Micro Economics / That branch of economics which explain the individual economic unit – consumer’s behavior, firm’s stud, factor pricing, pricing theory, production theory etc / Introduction
Choice / The act of selecting the best among a number of alternatives / Introduction
Allocative inefficiency / The use of uneconomical combination of resources to produce goods and services / Introduction
Utility / The want satisfying power of a product or service / Utility Chapter
;Marginal / Term used to describe the effects of a change in the current situation – mathematically it is nothing but derivative – the rate of change / Utility Chapter
Demand / The desire for a product/service supported by willingness to buy and ability to pay / Demand
Law of Demand / It establishes the inverse relationship between the price and the quantity demanded / Demand
Elasticity of Demand / It is the degree of responsiveness of quantity demanded to changes in its determinants / Demand
Supply / That part of stock which is offered in the market for sale / Supply
Law of Supply / It establishes the direct relationship between price and quantity supplied / Supply
Equilibrium / It is the point of equality between the forces of demand and supply. At this point demand is equal to supply. It is hypothetically an ideal situation. A point of no change. At this point both consumers and producers are happy. Consumers are happy because they attain maximum satisfaction and producers are happy because they attain maximum profits / Demand/Supply
Short Run / Normally used in production and cost function to indicate the insufficient length of time (say up to one year) to permit the firm to adjust changes according to the changes in market conditions like expanding the size of the plant to install additional capacity in the production. / Production /Cost Chapter
Long Run / It indicates the sufficient length of time which enables the firm to adjust its decisions to the changes in the market conditions / Production/Cost Chapter
Factors of Production / It refers to the combination of land, labor, capital and entrepreneur that are essential for production / Production
Factor Pricing / The reward to the factors of production / Production
Return to Factor / Changes in the production in the short run due to changes in one or more variable inputs, keeping some other inputs constant / Production
Returns to Scale / Economies (benefits) derived in the long run due to managerial efficiencies, R&D effect, technical efficiencies, marketing economies, transport and storage economies etc that occur due to changes in the long run. production function / Production
Break Even Point / A firm is said to be at break even when it covers all the costs it incurred but earn zero profit i.e. it is the point of no profit, no loss. / Production/Cost
Isoquent / Output curve whice shows different combinations of input which produce identical level of output / Production
Economic Region of Production / Production techniques that lies within the negatively sloping segments of iso quent curves are technically called economic region of production / Production
Ridge Lines / Ridge lines bound the economic region of production / Production
Opportunity Cost / The cost of foregone choices. It is the cost of next best alternative / Cost Chapter
Externalities / The side effects or spillover effects, of an action that influence the well being of non consenting parties – it may be negative externality or positive externality / Cost Chapter
Economies of Scale / When cost per unit falls due to use of technically efficient machines, greater degree of division of labor and specialization, etc which causes the deflated long run average cost curve of a firm / Cost Chapter
Economies of Scope / It refers to the reduction in costs that occur when the firm produces two or more products together rather than PRODUCING AT TWO DIFFERENT PLANTS. i.e. if joint production yields more benefits than if produced separately. / Cost Chapter
Shutdown / A temporary halt in the operation of a business in which the firm anticipates a return to operation in the future and therefore may not sell its assets. The firm’s variable cost may be eliminated but the fixed cost continue. / Cost Chapter
Classification of Cost / Total Fixed Cost (TFC): The Cost of Fixed Assets which does not vary with the levels of output
Total Variable Cost (TVC): The cost of variable factors like rawmaterials, power cost etc. which vary with the levels of output
Total Cost (TC) : TC = TFC + TVC
Marginal Cost: It is the derivative of the TC function.
AFC: TFC/Q AVC: TVC/Q
ATC: TC/Q or AFC + AVC / Cost Chapter
Market / The abstract concept that covers the trading arrangements of buyers and sellers that underline the market forces – the forces of demand and the forcesof supply / Market
Market Equilibrium/Profit Maximizing Output / A market ,whether it is perfect competitive, or monopoly or monopolistic competition or oligopoly is said to be at equilibrium (PROFIT MAXIMIZIANG OUTPUT) if the following two conditions are satisfied.
1. First Order Condition; (FOC) MR = MC
2. Second Order Condition(SOC): MC must cut MR from BELOW
Note: MR is the derivative of TR function and
MC is the derivative of TC function / Market
Market Failure / The failure of the market system to attain the hypothetically ideal allocative efficiency. This means that the potential gains exist that has not been captured. / Market
Game / Game is a strategy followed by a firm in a oligopoly market situation and the expected outcomes of the strategy can be shown in the pay-off matrix. / Market
Impossible Trinity / It is impossible for a nation to have (1) Free Capital Flows (2) A Fixed Exchange Rate and (3) Independent Monetary Policy together. If we put all these elements in the three sides of a triangle, a nation must choose one side of the triangle, giving up the opposite corner. / Macro Economic Models
National Income / It the branch of macro economics which explains the aggregate money value of all the final goods and services produced within the domestic territory of a nation in a financial year / National Income
Inflation / When too much of money supply chases very few goods, the situation is called inflation. It may be demand pull inflation or cost push inflation. The rising prices of essential commodities is currently the major concern of Indian Economy. / Macro Economics
Accelerator / The investment spending is proportional to the changes in output (national income) and is not affected by the cost of capital. It shows the relationship between the changes in the output and the volume of investment outlay. / Macro Economics
Multiplier / It states that in a market economy any autonomous change in real planned demand for output leads to a cumulative reaction in the equilibrium level of production, i.e. some multiple of the autonomous change It is the cornerstone of the macro economic principles that were brought in by Prof. J.M.Keynes in his income determination model to tackle the Great Depression of 1930s / Macro Economics
Budget / It shows the expected planned expenditures and the expected revenues of the government in a fiscal year. / Macro Economics
Central Bank / It controls the nation’s money supply and banking system. Every country has a central bank. Our central bank is Reserve Bank of India(RBI) / Macro Economics
Monetary Policy / The policies framed by the central bank to regulate the banking and monetary system of a country through changes in the interest rates, reserves to be maintained by the commercial banks with the central bank etc. / Macro Economics
Fiscal Policy / The policies framed by the government through the use of taxation and expenditure to regulate the aggregate level of the economic activity / Macro Economics

3.2.References

Suggested Books:

(1) Micro Economics Robert S Pindyck, Daniel L Rubinfeld, Prem L Mehta - Pearson

(2) Principles of Economics N.Gregory Mankiw, Thomson South Western , Pearson

(3) Modern Economics – H.L.Ahuja – S.Chand & Company

(4) Macro Economics – Rudiger Dornbush, Stanley Fisher, Richard Startz – Tata Mc-Graw-Hill

(5)Principles of Macro Economics, C.Rangarajan and B.H.Dholakia, The McGraw Hill

(6) Economics , Samuelson and Nordhaus, Tata McGraw Hill

(7) Managerial Economics: Principles and Worldwide Applications, Dominick Salvatore, Adapted by Ravikesh Srivastava, Oxford University Press

List of Journals/Periodicals/Magazines/Newpapers: Economist, Indian Economic Review, Asian Economic Review, American Economic Review, Economic and Political Weekly (EPW), Economic Times, Business Standard etc.

Websites Recommended: etc.

4.Assessment Policy

4.1Component wise Continuous Evaluation (CE), Laboratory and Project Work (LPW) & Semester End Examination (SEE) weightage

Assessment scheme / CE / SEE
Component weightage / 0.6 / 0.4
Class Test
30% / Sessional Exam
40% / Term Paper/Innovative Assignment
30%

4.2Assessment Policy for Continuous Evaluation (CE)

Assessment of Continuous Evaluation comprises of three components.

  1. Class Test will be conducted as per academic calendar. It will be conducted online/ offline for the duration of 1 hour and will be of 30 marks.
  2. Sessional Exam will be conducted as per academic calendar. It will be conducted offline for the duration of 1 hour and 15 minutes and will be of 40 marks.

4.3Assessment Policy for Semester End Examination (SEE)

A written examination of 3 hour duration will be conducted for the course as per academic calendar. It will carry 100 marks and marks obtained out of 100 will be converted as per weightage assigned.

5. Lesson Planning

Sessions / Topics / CLO Mapping
MODULE – 1 - Micro Economics
01-03 / Meaning and Basic Concepts of Economics –
Resource – Means of Production(Human/Natural/Manufacturing)
Meaning and Definition of Economics (Robbins)
Central Problems of Economics – What to produce, How to produce, Whom to produce
Needs – Wants - Utility
Choice/Trade Off/Opportunity Cost
Rationality/Economic Efficiency – Marginal
Subject matter of economics – Micro vs. Macro / CLO-1/3
;04-05 / Demand Analysis and Supply
Meaning of Demand
Demand Determinants and Demand Function
Law of Demand and exceptions
Elasticity of Demand and Measurement Price/Income/Cross/Advertisement
Supply and Determinants – Law of Supply
Equilibrium Price / CLO-1
06-08 / Theory of Production
- Factors of Production/Resource
- Elements of Time
- Production Function
Short Run – Law of Variable Proportion
Long Run – Law of Returns to Scale
Cobb-Douglas Product Function / CLO-1/3
09-12 / Cost, Revenue and Profit
Short Run Cost output Relationship
TFC/TVC/TC/MC/AVC/AFC and AC(ATC)
Cost Curves
Long Run Cost output Relationship – LAC
Revenue – Total Revenue, Average Revenue
And Marginal Revenue
Break Even and Profit / CLO-1/3
13-15 / Market Structure –
Characteristics of Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly and respective demand curves / CLO-1
MODULE – 2 – Macro Economics
16 / Macro -Economic Variables and Indicators / CLO-1
17-22 / National Income Accounting -
Concepts (GDP/BDP/GNP/NNP mp vs, fc)
Methods of Computation of National Income
(Value Added/Income/Expenditure) / CLO-2
23-24 / Inflation: Meaning and Effect – Measures to check inflation – Monetary/Fiscal and Administrative / CLO-2
25-27 / Money and Banking ;
– Meaning and Function of Money
-Forms of Money in modern time
(Currency and Bank Money)
Meaning and Functions of Commercial Banks – Credit Creation
Meaning and Functions of Central Bank/RBI Credit Control Measures - Monetary Policies / CLO-2/3
28-30 / Public Finance
Meaning of Public Finance
Government Budgets – Revenue Budget and Capital Budgets
Government Receipts – Revenue and Capital
Government Expenditure – Revenue – Capital
Types of Budget – Surplus/Deficit and Balanced
Types of Deficit Budgets – Revenue/Fiscal/Primary / CLO-2/3
30 / Total Number of Lectures

6.Mapping of Session Learning Outcomes (SLO) with Course Learning Outcomes (CLO)

Session No / Session Learning Outcome – (SLO) / CLO
01-03 / Students will start the economic way of thinking after studying the fundamental economic principles / CLO-1/3
04-05 / Students will be able to understand the demand and supply concepts and the need of elasticity of demand / CLO-1
06-08 / Students will be able to understand the basic concepts of production – Economics of Scale and Scope / CLO-1/3
09-12 / Students will be able to understand the cost function / CLO-1/3
13-15 / Students will be able to understand the market structure
Macro Economics
16 / Students will be able to understand the macro economic variables which influence the decisions / CLO-1
17-22 / Students will be able to understand the basic concepts used in the National Income Accounting – GDP – NDP – GNP and NNP / CLO-2
23-24 / Students can understand the concept of inflation – its causes and effect / CLO-2
25-27 / Students can understand the different measures of money supply and the basic functions of commercial banks and central bank (RBI) / CLO-2/3
28-30 / Students will be able to understand the need of public finance and its different components / CLO-2/3

7.Teaching-learning methodology

  1. Lectures: Primarily Chalk and Black board will be used to conduct the course. However, where required, Power Point Presentations (PPTs), Video Lectures, Simulations / Animations etc. will be used to enhance the teaching-learning process.
  2. Case study approach will be followed.

8.Active learning techniques

Active learning is a method of learning in which students are actively or experientially involved in the learning process. Following active learning techniques will be adopted for the course.

  • Activity – 1 Intensive discussion on current macro- economic profile of India, latest data related to GDP, employment, inflation and recent policy intervention and tax reforms like Demonetization, GST and their impact on the Indian economy will be discussed
  • Activity – II Innovative assignment will be given like how to measure the financial performance measure using modern tools like EVA – Economic Value Added.

9.Course Material

Following course material is uploaded on the course website:

  • Course Policy
  • Lecture Notes
  • Books / Reference Books
  • Innovative Assignments
  • Web-links, Blogs, Video Lectures,
  • Advanced topics

10.Course Learning Outcome Attainment

Following means will be used to assess attainment of course learning outcomes.

  • Use of formal evaluation components of continuous evaluation, semester end examination
  • Informal feedback during course conduction

11. Academic Integrity Statement

Students are expected to carry out assigned work under Continuous Evaluation (CE) component independently. Copying in any form is not acceptable and will invite strict disciplinary action. Evaluation of corresponding component will be affected proportionately in such cases. Turnitin software will be used to check plagiarism wherever applicable. Academic integrity is expected from students in all components of course assessment.

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