Class 12 Economics Old Course

Part A: Microeconomics

Unit 1: Elasticity and its Measurement- 10 teaching hours

Review of Demand and Supply
---Law of Demand
---Law of supply
ELASTICITY
Elasticity of Demand
Price elasticity of demand
Income elasticity of demand
Cross elasticity of demand
Determinants or factors affecting the elasticity of demand
Measurement of elasticity of demand
---Total outlay method
---Point method of measuring the elasticity of Demand
Elasticity of supply

Unit 2: Theory of Consumer Behavior- 13 teaching hours

Concept and approach of utility
Cardinal utility
Concept of total utility
Concept of Average Utility
Concept of marginal utility
Relationship Between Total Utility and Marginal Utility
Law of diminishing marginal utility
Law of substitution
Consumer’s surplus

Unit 3: Theory of Production- 10 teaching hours

Production Function
Types of the production function
Concept of total product (TP) Average product (AP) and Marginal Product (MP)
Relationship between AP and MP
Law of variable proportion
Law of returns to scale (Using traditional Method)
Isoquant
Isoquant map
Law of returns to scale using isoquant

Unit 4: Market, Revenue and Cost curves- 15 teaching hours

Concept of Market
Classification of market
---- Perfect competition
---- Monopoly
---- Imperfect competition

Revenue and Revenue Curves
Derivation of TR, AR, and MR under perfect competition
Derivation of TR, AR, and MR under Monopoly or Imperfect Competition
Cost and Cost curves
Difference between fixed cost and variable cost
Derivation of short-run cost curves
Derivation of short-run average cost curves
Why is the short-run average cost curve (SAC) ‘U’ shaped?
Relationship between ATC and AVC
Marginal cost (MC)
Relationship between AC and MC
Derivation of long-run cost curves
Relationship between LAC and LMC

Unit 5: Theory of Price and Output Determination- 12 teaching hours

Concept of firm and industry

Equilibrium of firm

---- Total revenue and Total cost approach (TR-TC Approach)
---- Marginal Revenue and Marginal Cost approach (MR-MC approach)

Perfect competition
Price and output determination under perfect competition
Price and output determination under perfect competition in the Short run/ Equilibrium of firm and industry under perfect competition in the Short run
Price and output determination under perfect competition in the long run/ Equilibrium of firm and industry under perfect competition in the long run

Monopoly
Types of Monopoly
Price and output determination under monopoly in short run/ Short-run equilibrium under monopoly
Price and output determination under monopoly in the long run/ Long run equilibrium under monopoly

Similarities between perfect competition and monopoly
Differences between perfect competition and monopoly

Unit 6: Factor Pricing- 15 teaching hours

Factor Pricing
Rent and its types
Difference between the contract rent and economic rent
Ricardian theory of rent / Classical theory of rent

Wage and its types
Differences between money wage and real wage
Subsistence theory of wages
Wage fund theory of wages

Interest and its types
Difference between gross interest and net interest
The classical theory of interest or real theory of interest

Profit and its types
Difference between Gross Profit and Net Profit
Risk theory of Profit
Uncertainty Bearing Theory of Profit

Part B: Macroeconomics

Unit 7: Basic Concepts of Macroeconomics - 6 teaching hours

Basic concepts of Macroeconomics
Scope of macroeconomics
Closed and Open Economy
Differences between open and closed economy
Macroeconomic variables

Unit 8: National Income Accounting - 10 teaching hours

National income accounting
Various Concepts of National Income
Nominal GDP and Real GDP
Circular flow of Income
MEASUREMENT OF NATIONAL INCOME
DIFFICULTIES IN MEASUREMENT OF NATIONAL INCOME
DIFFICULTIES IN MEASUREMENT OF NATIONAL INCOME IN DEVELOPING COUNTRIES

Unit 9: Money - 10 teaching hours

Barter system
Origin of Money
Importance of Money
Functions of Money
Kinds of Money
Qualities/ Characteristics/ Features of good money
Value of Money
The quantity theory of money (Fisher’s equation of money)
Inflation (Detail)
Deflation (Detail)

Unit 10: Money - 11 teaching hours

Banking (Meaning and Roles)

Classification of banks 

The central bank and its Functions

Commercial bank and its Functions

Financial market - Money Market and Capital Market

Difference between Money Market and Capital Market

Unit 11: Government Finance - 20 teaching hours

Concept and Importance of Government Finance
Government Expenditure: Importance and Classification ( With Reference to Nepal)
Government Revenue: Tax and Non-Tax Sources; Direct and Indirect tax; Concept of Progressive, Proportional and Regressive and Digressive Tax
Characteristics of Good Tax System and sources of Taxes in Nepal
Government Borrowing
Government Budget
Budget Formulation Process

Unit 12: International Trade - 18 teaching hours

Concept and Importance of International Trade
Balance of trade; Surplus, deficit, and balance
Concept and Importance of Balance of Payment
Difference between Balance of trade and Balance of payment
Free Trade and Protectionism
Nepalese foreign trade/ Foreign trade of Nepal
Ricardian Comparative cost theory of International Trade
General Introduction to WTO and SAFTA