2. Introduction to Economics Micro and Macro Economics Concept of Plant, Firm And Industry Positive and Normative Economics Introduction To Managerial Economics
3. Economics is the study of men as they live, behave, move and think in the ordinary business of life. Economics is the essence pertains to an understanding of life’s preoccupation. Economics, as a social science studies the human behaviour as a relationship between numerous wants and scarce means having alternative use. It teaches the art of rational decision making, in economising behaviour to deal with the problem of scarcity.
4. The branch of economics which is concerned with the analysis of the behaviour of the individual economic unit or variable. It is the study of particular firm, particular household, individual price, wages, income, individual industries, particular commodities. It deals with individual decision making and problem of resource allocation. It examines how individual consumer and producer behaves. Often called as price theory.
5. It serve as a basis of allocation. It serve as a basis of prediction It serve as a guide for business/production planning It teaches the art of economising It explains the price determination It has a direct relevance in business decision making. It is useful in determination of economic policies It serve as a basis of welfare economics.
6. Theories are static It studies only parts and not the whole economy. it has an unrealistic assumption of full employment. It misleads when one tries to generalise from the individual behaviour By assuming independence of want and production in the system it failed to consider their dependence effect.
7. Branch of economics which deals with the aggregate behaviour of the economy as a whole. It looks at the total size, shape and functioning of the whole economy. It is a study of very large, economy-wide aggregate variable like national income, total saving, total consumption money supply, price level unemployment etc.
8. Explains the working of the economic system as a whole It is useful to the planner for preparing economic plans for the country’s development Its knowledge is indispensable for the policy makers for formulating the macroeconomic policies. It is helpful in international comparison. It explains economic dynamism and intricate relationship among macroeconomic variable,
9. It ignores individual behaviour It has a tendency of excessive generalisation It is not easy to get correct and complete data Macroeconomic prediction are not fully reliable.
10. IndustryFirm Plant
11. Itis a technical unit With technical sphere, a plant enjoys considerable autonomy A plant is controlled by a single firm Technically similarity in the production process of goods manufactured within a plant
12. A firm may own one or more than one plant Firm exercises a unified control over its plant Organises resources and plan their uses It is a separate legal entity A firm, in economic theory, undertakes production to maximise profits.
13. AnIndustry is a group of firms but not easy to decide what types of firm should be grouped together to make a particular industry
14. Positive economics refers to an analysis of fact. In positive economics our goal is to describe, as accurately as possible. When economist describe the economy, make prediction about how the economy will change, or explains the effect of different alternative , they are involved in positive economics. Most positive statements are testable It deals with cause effect relationship. Considered as descriptive analysis.
15. Analysis based on value judgment is considered as normative economics. It is focused on what we believe should be or ought to be. In this we make value judgment and state our opinion rather than confining ourselves to a description of facts Normative economics are not testable. Considered as prescriptive analysis.
16. It is an evolutionary science , it is a journey with continuing, understanding and application of economic knowledge- theories, models, concept and categories them in dealing with the emerging business. It is essentially an applied economics in the field of business management. It pertains to all economic aspects of managerial decision making