# Rajasthan Public Service Commission - Economics Syllabus

Updated on: Mar 19, 2013

The syllabus of Economics for Rajasthan Public Service Commission (RPSC) is given below:

Characteristics of equilibrium and disequilibrium.Cobweb model. Theories

of demand -utility, indifference curve,income and substitution effects, Slutsky theorem, ordinary and compensated demand curves, elasticity of demand.Theory of consumer behaviour under risk and uncertainty. Economics of search and information. Short run and long run production functions. Law of variable proportions.Least cost combination.Elasticity of substitution. Euler's theorem. Technical progress and production function. Cost curves. Determination of price and output under different market structures.Factor pricing under different market conditions . General equilibrium theory .Welfare economics -Pareto optimality and new welfare economics.Theory of second best. Arrow's Impossibility Theorem.

National income- concepts and measurement, social accounting,input- output accounting and green accounting .Consumption hypotheses -absolute, relative, life-cycle and permanent income hypotheses. Marginal efficiency of capital and investment.Multipliers and accelerator. Theories of demand for money - Classical, Keynesian, Friedman, Baumol and Tobin. The components of money supply. RBI approach to money supply.High powered money and money multiplier.The IS-LM model. The relative effectiveness of monetary and fiscal policies.Classical, Keynesian and Post- Keynesian theories of determination of income and output.Philips curve. Mundell- Flaming model.New classical approach to macro economics. Theories of trade cycle.

Distinction between private and public goods, merit and non-merit goods. Kinds of budget -public budgets, zero-base budgeting, gender budgeting and budget deficits.Public expenditure -Wagner's law of expenditure, Wiseman - Peacock hypothesis. The effects of public expenditure on economy. Public revenue - taxburden, incidence, impact and effects of taxation. Elasticity and buoyancy of taxes.VAT and its implication in Rajasthan.Problem of double taxation. Tax rate and Laffer curve. Public debt - sources, burden,effects and its management. Centre-State financial relations and role of Finance Commission.

Theories of international trade -comparative cost, opportunity costs and

modern theories.Heckscher - Ohlin theory, Factor Price Equalization Theorem .Rybczynski theorem .Stolper - Samuelsontheorem. Terms of trade. Effects of Tariff and Quota.Balance of payments.WTO and its implication for developed and under developed countries.

Economic developmentand growth .Measurement of development- per capita income , inequality of income, Human Development Index, PQLI and other indicators. Development and growth models- Lewis and Ranis - Fei,Harrod- Domar, Solow, Kaldor and Meade. Environment and development trade-off and concept of sustainable development. Optimum use of exhaustible and inexhaustible resources. The concept of externalities. Measures for environmental externalities - Pigovian taxes and subsidies. Bargaining solution and collective action (Coase's Theorem).

Problems of Indian economy - poverty, unemployment, regional disparities, inequalities in distribution of income and wealth.Agricultural development and policies. Industrial development and policies. Liberalization, Globalization, Privatization and new economic policy and its impact. Role of MNCs in India.

Unconstrained and constrained optimization. The concept of Linear Programming, Game Theory and Input-Output analysis.Probability - definition,theorems of addition and multiplication, conditional probability, Bay's Theorem.Binomial, Poisson and Normal distributions. Concept of sampling. Types of errors. Hypothesis testing - use ofZ, t, x2 & F tests.

UNIT - I : MicroeconomicsUNIT - I : Microeconomics

Characteristics of equilibrium and disequilibrium.Cobweb model. Theories

of demand -utility, indifference curve,income and substitution effects, Slutsky theorem, ordinary and compensated demand curves, elasticity of demand.Theory of consumer behaviour under risk and uncertainty. Economics of search and information. Short run and long run production functions. Law of variable proportions.Least cost combination.Elasticity of substitution. Euler's theorem. Technical progress and production function. Cost curves. Determination of price and output under different market structures.Factor pricing under different market conditions . General equilibrium theory .Welfare economics -Pareto optimality and new welfare economics.Theory of second best. Arrow's Impossibility Theorem.

UNIT - II : Macroeocnomics

UNIT - II : Macroeocnomics

National income- concepts and measurement, social accounting,input- output accounting and green accounting .Consumption hypotheses -absolute, relative, life-cycle and permanent income hypotheses. Marginal efficiency of capital and investment.Multipliers and accelerator. Theories of demand for money - Classical, Keynesian, Friedman, Baumol and Tobin. The components of money supply. RBI approach to money supply.High powered money and money multiplier.The IS-LM model. The relative effectiveness of monetary and fiscal policies.Classical, Keynesian and Post- Keynesian theories of determination of income and output.Philips curve. Mundell- Flaming model.New classical approach to macro economics. Theories of trade cycle.

**UNIT - III : Public Economics and International Economics**Distinction between private and public goods, merit and non-merit goods. Kinds of budget -public budgets, zero-base budgeting, gender budgeting and budget deficits.Public expenditure -Wagner's law of expenditure, Wiseman - Peacock hypothesis. The effects of public expenditure on economy. Public revenue - taxburden, incidence, impact and effects of taxation. Elasticity and buoyancy of taxes.VAT and its implication in Rajasthan.Problem of double taxation. Tax rate and Laffer curve. Public debt - sources, burden,effects and its management. Centre-State financial relations and role of Finance Commission.

Theories of international trade -comparative cost, opportunity costs and

modern theories.Heckscher - Ohlin theory, Factor Price Equalization Theorem .Rybczynski theorem .Stolper - Samuelsontheorem. Terms of trade. Effects of Tariff and Quota.Balance of payments.WTO and its implication for developed and under developed countries.

**UNIT - IV : Economic Growth and Development**Economic developmentand growth .Measurement of development- per capita income , inequality of income, Human Development Index, PQLI and other indicators. Development and growth models- Lewis and Ranis - Fei,Harrod- Domar, Solow, Kaldor and Meade. Environment and development trade-off and concept of sustainable development. Optimum use of exhaustible and inexhaustible resources. The concept of externalities. Measures for environmental externalities - Pigovian taxes and subsidies. Bargaining solution and collective action (Coase's Theorem).

**UNIT - V : Indian Economy and Quantitative Techniques**

Problems of Indian economy - poverty, unemployment, regional disparities, inequalities in distribution of income and wealth.Agricultural development and policies. Industrial development and policies. Liberalization, Globalization, Privatization and new economic policy and its impact. Role of MNCs in India.

Unconstrained and constrained optimization. The concept of Linear Programming, Game Theory and Input-Output analysis.Probability - definition,theorems of addition and multiplication, conditional probability, Bay's Theorem.Binomial, Poisson and Normal distributions. Concept of sampling. Types of errors. Hypothesis testing - use ofZ, t, x2 & F tests.