Economic Problem, Basic Economic Problems of Economy, Solution to economic problem, Basic Postulates in Economics

1. Dr. B. H. DAMJI
Associate Professor & Head,
Department of Economics,
D.B.F. Dayanand College
of Arts & Science,
Solapur

2. ECONOMIC PROBLEM

3. •What is Economic Problem?
• How to satisfy infinite wants with the help of
scarce resources which are of alternative uses.
• Characteristics of Economic
Problem
• 1. Unlimited wants
• 2 Scarce means
• 3 Alternative uses of means
• 4 Selection of competitive wants

4. Solution to Economic Problems
• (A) Solution to personal economic problems.
• 1. Selection of needs
• 2. Increasing income
• (B) Solution to economic problems of society.
• 1. Optimum utilization of resources
• 2. Ordering of wants
• 3. Selection of appropriate technique of
production

5. Basic Problems of an Economy
1. Are all resources in the economy being
utlized fully ?
2. What to produce and in what quantity ?
3. How to produce ?
4. For whom to produce ?
5. How efficiently the resources are being
utilized ?
6. Is the economy growing or stagnant ?

6. Basic Postulates of Economics
• 1. Principle of Maximization
• 2. Rational behaviour
• 3. Full knowledge of market
• 4. Study of common man
• 5. Other things being equal

7. Contd.
• 6. Psychological condition
• 7. Assumption of Equilibrium
• 8. Institutional assumption
• 9. Scarcity
• 10. Sovereign consumers

8. Thank You