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PRODUCTION ECONOMICS

L T P C
3 - - 3
Version No.:
Course Prerequisite: Nil
Objectives: To introduce the concepts of economics related to production of the business units and its
applications
Expected Outcome: Knowledge of theories and tools of production technology and its implications in
firm and industry level decision making process
CONTENTS
Unit Description Hours
Basics of Production Economics:
Production function – returns to scale and elasticity of substitution – Cobb-Douglas
1 15
technology – Translog and CES production function – performance measures –
productivity and efficiency – allocative, technical and scale efficiency.
Productivity and performance measurement:
2 Measurement of productivity – production function application – Total factor 15
productivity approach – performance index and ratios.
Efficiency Measurement:
DEA and stochastic frontier production approaches - alternative methods of DEA –
3 Farrell’s and Charnes and non-cooper’s parametric linear programming approach – 15
Aigner and Chu’s parametric linear programming approach – Timmer’s probabilistic
approach.
Text Books :
1. Steven .T Hackman: Production Economies – integrating the microeconomic and engineering
perspectives, Springer-Verlag Berlin Heidelberg.
2. P.L Mehta: Managerial Economics:Analysis, Problems and Cases, sultan Chand & Sons
Reference Books:
1. Mihir Kumar Pal: Productivity in the Organised Manufacturing Sector in India, Concept
Publishing Company, 2002.
2. James Mitchell Henderson and Richard E. Quandt: Microeconomic Theory: A Mathematical
Approach, New York: McGraw-Hill.
3. A. Koutsoyiannis: Modern Microeconomics, Macmillan Press Ltd.
4. K.P. Kalrajan & R. Shaud: Economics of Disequilibrium: An approach from the frontier,
Macmillan Education, 2002.
5. Tim Coelli, D.S. Prasada Rao, C.J., O’Donnell: An Introduction to efficiency and Productivity
Analysis, Springer, 2005.
6. Subash C. Ray (2004): Data Envelopment Analysis: Theory and Techniques for Economics and
Operations Research, Cambridge University Press, 2004.
Mode of Evaluation: Written Examinations and any of these: Term Paper, Mini Projects, Quiz, Group
Discussion, Case Study Analysis, Seminar, Assignments etc.
Recommended by the Board of Studies on: 05-11-2009
Date of Approval by the Academic Council: