introductory micro economics

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micro economics plus two topics

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introductory micro economics

  1. 1. WELCOME<br />
  2. 2. Part 1<br />Micro economics<br />
  3. 3. DEFINITION OF ECONOMICS<br />WEALTH DEFINITION<br />By Adam smith<br />Defined economics as a science of wealth<br />His book An enquiry in to the nature and causes of the<br /> wealth of nations. Published in1776<br />Considers material wealth only<br />Economics studies wealth getting and spending activities<br />
  4. 4. Welfare definition<br />by<br />Alfred Marshall<br />1.Economics is the science<br /> of human welfare<br /> 2. Study of mankind in the <br />ordinary business of life<br />3. Economics is a social science<br />4. Study only economic activity<br />
  5. 5. Scarcity definition<br />SCRCITY DEFINITION<br />By Lionel Robbins<br />The important features are<br />1.Economics is a positive science<br />2. It is the study of human behavior<br />3.Our wants are unlimited<br />4.Resources are limited<br />Resources can be put in to alternative uses<br />
  6. 6. Development concept<br />BY PAUL A SAMUELSON<br /> Economic problem arises<br /> because of unlimited wants and<br /> scarce means<br /> Wants have the tendency to<br /> increase in the modern <br />dynamic economic system<br />Economics suggest means <br />to the problem of<br /> unemployment<br />production , inflation<br />It explains how the resources are distributed <br />
  7. 7.
  8. 8. WHY DO ECONOMIC PROBLEM ARISE?<br />Why do <br />Economic<br />Problem<br />arise<br />{<br />{{{<br />UNLIMITED WANTS<br />DIFFERENT PRIORITIES<br />LIMIOTED MEANS<br />MEANS HAVING <br />ALTERNATIVE USES<br />
  9. 9. CENTRAL PROBLEMS OF AN ECONOMY<br />Whom to<br />produce<br />Problem<br />Of Efficiency<br />HOW TO<br />PRODUCE<br />WHAT TO <br />PRODUCE<br />Better utilization of resources<br />Problem of choice<br />Capital intensive or labour intensive<br />Problem of distribution<br />
  10. 10. PRODUCTION POSSIBILITY FRONTIER<br />It is a curve which shows the various combination of two goods that can be produced with given technology<br />It is downward sloping because more production of one good is associated with less of the other<br />GOOD B<br />0 good A<br />
  11. 11. Production possibility curve<br />
  12. 12.
  13. 13. OPPURTUNITY COST<br /> MEANS WHAT ONE GET <br /> FROM THE NEXT BEST USE<br /> If a manager get RS 5000 as salary from firm A<br /> He will select another occupation only if he<br /> get the same or higher salary <br /> Then the opportunity cost is RS 5000<br /> It is also called transfer earning<br />
  14. 14. Marginal Opportunity Cost<br />The rate at which one<br /> commodity is sacrificed <br />for production of <br />additional unit of the other<br />
  15. 15. NORMATIVE ECONOMIC ANALYSIS<br /> It is a matter of opinion<br /> It is the desirability of<br /> economic mechanism <br /> Value judgment<br /> It considers what is desirable<br /> and what is not desirable<br />

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