CBSE 12th Class Economics Syllabus

Course Structure

Parts/Units	Topics	Marks
Part A	Introductory Microeconomics	50
I	Introduction	6
II	Consumer Equilibrium and Demand	16
III	Producer Behaviour and Suplly	16
IV	Forms of Market and Price Determination	12
Part B	Introductory Macroeconomics	50
V	National Income and Related Aggregates	15
VI	Money and Banking	8
VII	Determination of Income and Employment	12
VIII	Government Budget and the Economy	8
IX	Balance of Payment	7
Total (Part A + Part B)		100

Course Syllabus

Part A: Introductory Microeconomics

Unit 1: Introduction

• 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 Equilibrium and Demand

• 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)

  • Conditions of consumer's equilibrium

• Demand −

  • Market demand

  • Determinants of demand

  • Demand schedule

  • Demand curve and its slope

  • Movement along and shifts in the demand curve

  • Price elasticity of demand - factors affecting price elasticity of demand

  • Measurement of price elasticity of demand −

    • percentage-change method

    • geometric method (linear demand curve)

  • Relationship between price elasticity of demand and total expenditure

Unit 3: Producer Behaviour and Supply

• Production function −

  • Short-Run

  • Long-Run

• Total Product −

  • Average Product

  • Marginal Product

• Returns to a Factor

• Cost and Revenue −

  • Short run costs - total cost, total fixed cost, total variable cost

  • Average cost; Average fixed cost, average variable cost and marginal cost-meaning and their relationship

• Revenue −

  • Total revenue

  • Average revenue

  • Marginal revenue - meaning and their relationship

• Producer's equilibrium −

  • Meaning and its conditions in terms of marginal revenue-marginal cost

• Supply −

  • Market supply

  • Determinants of supply

  • Supply schedule

  • Supply curve and its slope

  • Movements along and shifts in supply curve

  • Price elasticity of supply

  • Measurement of price elasticity of supply −

    • Percentage change method and

    • Geometric method

Unit 4: Forms of Market and Price Determination

• Perfect competition −
  • Features
  • Determination of market equilibrium
  • 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

• Some basic concepts −
  • Consumption goods
  • Capital goods
  • Final goods
  • Intermediate goods
  • Stocks and flows
  • Gross investment
  • 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

• Money - its meaning and functions
• Supply of money −
  • Currency held by the public
  • 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
  • Reverse Repo Rate
  • Open Market Operations
  • Margin requirement

Unit 7: Determination of Income and Employment

• 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

• Problems of excess demand and deficient demand −

  • measures to correct them - change in government spending, taxes and money supply

Unit 8: Government Budget and the Economy

• Government budget −
  • Meaning
  • Objectives
  • Components
• Classification of receipts −
  • Revenue receipts
  • Capital receipts
• Classification of expenditure −
  • Revenue expenditure
  • Capital expenditure
• Measures of government deficit −
  • Revenue deficit
  • Fiscal deficit
  • Primary deficit

Unit 9: Balance of Payments

• Balance of payments account −
  • Meaning and components
  • Balance of payments deficit-meaning
• Foreign exchange rate −
  • meaning of fixed and flexible rates
  • managed floating
• Determination of exchange rate in a free market

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