SEMESTER -III

B.A (Hons) BUSINESS ECONOMICS

Category I
(B.A. Honours in Business Economics in three years)

DISCIPLINE SPECIFIC CORE COURSE – 7 (DSC-7): MICROECONOMICS-II

CREDIT DISTRIBUTION, ELIGIBILITY AND PRE-REQUISITES OF THE COURSE

Course title & Code Credits Credit distribution of the course Eligibility Pre-requisite of
Lecture Tutorial Practical/ criteria the course
Practice (if any)
Microeconomics-II (DSC 7) 4 3 1 0 Class 12 None

Learning Objectives
This course aims to provide to the student an understanding of:
the concepts of a market structure and equilibrium in perfectly and imperfectly
competitive market situations.
the possible equilibria in factor markets
equilibrium in all commodity and factor markets
the concept of economic welfare and its properties.

Learning outcomes
By studying this course, the students will be able to:

· Identify different forms of market structure, their resource allocation and

welfare implications.
· Express rational agent desires in a game theoretic framework.
· Analyse profit maximising strategies under different oligopoly models.
· Use a social welfare function to evaluate societal outcomes

SYLLABUS OF DSC-7

UNIT–I: Market Structure (18 hours)

Perfect Competition: Firm equilibrium in the short and long run. Short run supply curve
for the firm and the market, long run industry supply; constant, increasing and decreasing
cost industry; producer and consumer surplus. Monopoly: Profit Maximisation, multi-
plant firm, monopoly power and its measurement, social costs of monopoly, price
discrimination. Monopolistic Competition: product differentiation; equilibrium of the
firm in the industry-with entry of new firms and with price competition, Comparisons.
Oligopoly and Game Theory: Cournot model and reaction curves, Stackelberg‘s model,
Bertrand model, Quantity leadership, Price leadership, Non collusive stable equilibrium,
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Simultaneous quantity setting, Collusion, Cartels, Concepts of Game Theory: Dominant
strategies and Nash Equilibrium, Mixed strategies, Prisoner's Dilemma.

UNIT – II: Factor Market (10 hours)

Factor pricing in the case of single and many variable factors, demand for labor in a
product market with perfect competition and monopoly, monopsony, bilateral
monopoly and role of labour unions. Economic rent and quasi rent.

UNIT – III: General Equilibrium (9 hours)

Equilibrium and efficiency under pure exchange and production; Edgeworth box; Pareto
optimality conditions; market trade; Walras’ law; existence of equilibrium and
efficiency; Implications of the first and second welfare theorem.

UNIT – IV: Welfare (8 hours)

Social Welfare Function; welfare maximization, Fair allocation, Envy and equity, Arrow's
Impossibility Theorem

Essential/recommended readings

1. Varian, H. R. (2020). Intermediate microeconomics: A modern approach. W. W.

Norton.
2. Bernheim, B., Whinston, M. (2009). Microeconomics. Tata McGraw- Hill.
3. Snyder, C., Nicholson, W. (2010). Fundamentals of Microeconomics. Cengage
Learning
4. Pindyck, Robert S. & Rubinfeld, Daniel L. (2017). Microeconomics. Pearson

Suggestive readings

1. Dr. Robert E. Hall and Dr. Marc Lieberman. (2009).Microeconomics - Principles

and Applications. South Western Educational Publishing.
2. Bergstrom, T., Varian, H. (2014). Workouts in Intermediate Microeconomics. W. W.
Norton.
3. Joseph E. Stiglitz and Carl E. Walsh. (2006). Principles of Microeconomics. W. W.
Norton & Co.
Note: Examination scheme and mode shall be as prescribed by the Examination Branch,
University of Delhi, from time to time.

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 DISCIPLINE SPECIFIC CORE COURSE – 8 (DSC-8) MATHEMATICS FOR BUSINESS
ECONOMICS - II
CREDIT DISTRIBUTION, ELIGIBILITY AND PRE-REQUISITES OF THE COURSE

Course title & Code Credits Credit distribution of the course Eligibility Pre-requisite
Lecture Tutorial Practical/ criteria of the course
Practice (if any)
Mathematics for Business 4 3 1 0 Class 12 None
Economics –II (DSC 8)

Learning Objectives

This course aims to introduce to the student the understanding of

real multivariate functions and their properties

the optimisation conditions for real multivariate functions
differential equations and their applications
difference equations and applications

Learning outcomes

By studying this course, the students will able to:

· To be adept in the use of differential and integral calculus to examine the

properties of functions used in economics and business
· To solve numerical problems of multivariable optimization and properties of the
solutions.
· To model business and economic scenarios in mathematical terminology and to
appreciate economic models by using formal mathematical methods.

SYLLABUS OF DSC-8

UNIT – I:Multivariable Functions (12 hours)

Geometric representations: graphs and level curves; differentiability: characterisations,
properties with respect to various operations and applications; higher order derivatives:
properties and applications; the implicit function theorem and application to
comparative statics problems; homogeneous and homothetic functions:
characterisations and applications

UNIT – II: Multivariable Optimization (15 hours)

Multivariate optimisation: Convex sets; geometric properties of functions: convex
functions, their characterisations, properties and applications; further geometric
properties of functions: quasiconvex functions, their characterisations, properties and
applications; unconstrained optimisation: geometric characterisations, characterisations

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using calculus and applications. Multivariate Optimization with constraints: Constrained
optimisation with equality constraints: geometric characterisations, Lagrange
characterisation using calculus and applications; properties of value function: envelope
theorem and applications.

UNIT – III: Economic Dynamics -1 (9 hours)

First order differential equations, phase diagrams and stability.

UNIT – IV: Economic Dynamics -2 (9 hours)

First order difference equations, equilibrium and stability

Essential/recommended readings
1. Sydsaeter, K., Hammond, P. (2002). Mathematics for economic analysis. Pearson
Educational.

Suggestive readings
1. Chiang, Alpha C., and Wainwright Kevin. Fundamental Methods of Mathematical
Economics. Boston, Mass: McGraw-Hill/Irwin, 2005
2. Hoy, Michael, Livernois, John, McKenna, Chris, Rees, Ray and StengosThanasis
(2011) Mathematics for Economics. Cambridge, Mass. : MIT Press
Note: Examination scheme and mode shall be as prescribed by the Examination Branch,
University of Delhi, from time to time.

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 DISCIPLINE SPECIFIC CORE COURSE – 9 (DSC-9): CORPORATE FINANCE

CREDIT DISTRIBUTION, ELIGIBILITY AND PRE-REQUISITES OF THE COURSE

Course title & Code Credits Credit distribution of the course Eligibility Pre-requisite of
Lecture Tutorial Practical/ criteria the course
Practice (if any)
Corporate Finance (DSC 9) 4 3 1 0 Class 12 None

Learning Objectives

This course aims to

introduce the basic concepts of financial management and its objectives.
provide an understanding of investment decisions and of working capital.
introduce and discuss the issues in the cost of capital.
examine the theories and analysis involved in financing decisions and dividend
distribution.

Learning outcomes

By studying this course, students will be able to:

To learn the role and objectives of financial management in business corporations.

To acquire skills to analyse corporate behaviour during procurement and
development of resources.
To understand capital structure and discuss the factors that financial managers
consider while determining a company’s financing strategy
To critically discuss the theories relating to dividends policies and cost of capital

SYLLABUS OF DSC-9

UNIT – I: Introduction (6 hours)

Nature and Scope of Financial Management. Traditional and Modern Approach to the
concept of financial management. Functions of finance – Finance Decision, Investment
Decision, Dividend Decision. Objectives of Financial Management - Profit Maximisation
and Wealth Maximisation. Concept of Time Value of Money.

UNIT – II: Investment Decision (15 hours)

Capital Budgeting - Nature and meaning of capital budgeting; Types of decisions: - Accept-
Reject, Replacement, Mutually Exclusive. Estimation of Relevant cash flows. Evaluation
techniques - Accounting Rate of Return, Pay Back, Net Present Value, Internal Rate of
Return, Profitability Index Method.

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Concepts and Definition of working capital. Determining Financing Mix; Permanent and
temporary working capital; Determinants of working capital; Computation of Working
Capital.

UNIT – III: Cost of Capital (9 hours)

Concept and Measurement of Cost of Capital: Measurement of specific costs - Cost of
debt:- perpetual debt and Redeemable debt; Cost of Preference Share; Cost of Equity
Capital – Dividend valuation model and CAPM; Cost of Retained Earnings. Computation
of Overall Cost of Capital based on book value weights and market value weights.

UNIT – IV: Financing Decision (15 hours)

Leverage Analysis - Operating, Financial, and Combined Leverage, Earning Before
Interest and Tax (EBIT) – Earning Per Share (EPS) analysis, Indifference point. Capital
structures theories - Net income approach; Net operating income approach; Modigliani-
Miller (MM) approach. Factors affecting capital Structure.
Dividend Decision: Relevance and irrelevance of dividends. Residual theory of dividends;
Modigliani and Miller hypothesis; Walter's model; Gordon's model. Factors affecting
Dividend Policy.

Essential/recommended readings

1. Khan, M.Y., & Jain, P.K. Basic Financial Management. Tata McGraw Hill Education
Private Limited.
2. Pandey,I.M. Financial Management. Vikas Publishing House Pvt. Ltd. New Delhi
3. Rustagi, R. P. Fundamentals of Financial Management, Taxmann publication(Pvt)
Ltd,New Delhi.

Suggestive readings
1. Van Horne, J.C. Financial Management and Policy. Prentice Hall of India.
2. Levy, H. and Sarnat, M. Principles of Financial Management. Prentice Hall.
3. Brealey, Richard, A., & Myers, Stewart, C. Principles of Corporate Finance. Tata
McGraw Hill Publishing Company Limited.
4. Chandra, Prasanna. Financial Management-Theory and Practice. Tata McGrawHill.

Note: Examination scheme and mode shall be as prescribed by the Examination Branch,
University of Delhi, from time to time.

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DISCIPLINE SPECIFIC ELECTIVE COURSE 1 (DSE-1): INCOME TAX LAW AND PRACTICE

CREDIT DISTRIBUTION, ELIGIBILITY AND PRE-REQUISITES OF THE COURSE

Course title & Code Credits Credit distribution of the course Eligibility Pre-requisite of the
Lecture Tutorial Practical/ criteria course
Practice (if any)
Income Tax Law and 4 3 1 0 Class 12 None
Practice (DSE 1)

Learning Objectives

The course aims at

Introducing basic definitions in Income Tax Act
Computing taxable income under the heads Salaries and House Property
Calculate Profits and Gains of Business or Profession, Capital Gains and Income from
other sources
Understand deductions from gross taxable income and filling of returns.

Learning outcomes

By studying this course, the students will be able to:

· To Understand the Process of determination of taxable income

· To apply the deductions to taxable income as per the latest provisions of Income-
tax Act, 1961
· To Acquire the skill of Filling Basic Returns of Income Tax

SYLLABUS OF DSE-1

Unit 1: Introductory Concepts (3 hours)

Permanent Account Number (PAN), Assessment Year, Previous Year, Person, Assessee,
Gross Total Income, Total income and its computation, Tax Rates, Residential status;
Relationship between Residential Status and Incidence of Tax. Incomes Exempted under
section 10.

Unit 2: Computation for “Salaries” and “Income from House Property” (15 hours)
Income under the head “Salaries”: Meaning of Salary, basis of charge, Allowances,
Perquisites, permissible deductions from salary income, Deduction under Section 80 C.
Income under the head “Income from House Property”: Basis of charge, income from let
out house property, income from self-occupied property.

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Unit 3: Computation for ‘Profits and Gains of Business or Profession’, ‘Capital
Gains’ and ‘Income from other sources’ (15 hours)
Profits and gains of business or profession: Basis of charge, important rules regarding
assessment of PGBP, computation of Profits from Business or Profession, deductions
expressly allowed, expenses expressly disallowed.
Capital gains: basis of charge, meaning of capital asset, cost of acquisition, improvement
and indexation, exemptions for capital gains arising from transfer of Capital Assets,
calculation of tax on short-term and long-term capital gains.
Income from other sources: basis of charge, dividend, winnings from lotteries,
crossword puzzles, etc., interest on securities, advance money received for transfer of a
capital asset, permissible deductions.

Unit 4: Computation of Total Income and Tax Liability (12 hours)

Computation of total income; Deductions from gross total income under section 80 C to
80 U; Rebates and reliefs; Set-off and carry forward of losses (Concept only), Concept of
advance payment of Tax and Deduction of Tax at Source. Computation of Taxable
Income and liability of Tax. e-Filing of Returns: ITR-1 (SAHAJ) and ITR-2

Essential/recommended readings

1. Ahuja, G. and Gupta, R. Simplified Approach to Income Tax. Flair Publications (P)
Ltd.
2. Singhania, V.K. and Singhania, M. Students Guide to Income Tax. Taxmann
Publications (P) Ltd.
Software to be used for teaching are:
1. ‘Excel Utility’ available at incometaxindiaefiling.gov.in
2. Vinod Kumar Singhania, e-filing of Income Tax Returns and Computation of Tax
Taxmann Publication (P) Ltd, New Delhi. (Latest version)

Note: Examination scheme and mode shall be as prescribed by the Examination Branch,
University of Delhi, from time to time.

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