Economics is a vast subject in itself. Assignment Achievers are here providing you with a brief of Fundamentals of Economics.

1. Fundamentals
of Economic
Concept

2. Contents:
D EF IN IT IO N O F EC O N O M IC S
B A S IC EC O N O M IC C O N C EP T S
C O M P O N EN T S O F EC O N O M IC S
B A S IC EC O N O M IC P R O B L EM S
B R A N C H ES O F EC O N O M IC S

3. Definition of Economics:
A L F R ED M A R S H A L L
''Economics is the study of mankind in the ordinary business
of life".
L IO N EL R O B B IN S
''Economics is the science which studies human
behaviour as a relationship between ends and
scarce means which have alternative uses".

4. F R IT Z M A C H L U P
''Economics come in whenever more of one thing means less of
another".
R IC H A R D L IP S EY
''Economics is the study of the use of scarce resources to satisfy
unlimited human wants ".
JO H N M A Y N A R D K EY N ES
''The theory of economics is a method rather than a
doctrine, an apparatus of mind, a technique of
thinking, which helps its possessor to draw correct
conclusions ".

5. Basic Economic
Concept
S u p p l y a n d D e m a n d
S c a r c i t y
O p p o r t u n i t y C o s t
T i m e V a l u e o f M o n e y
S u p p l y a n d D e m a n d

6. Supply and Demand
Supply and Demands affects every aspect of day to day
lives. The fundamental concept behind supply and
demand states that producer and consumer always meet
at one point.
Scarcity
Scarcity arrives when the needs of human is
more as compared to the resources to fulfil
them. The needs are unlimited but the resources
are limited and hence scarcity arises.

7. Opportunity Cost
Opportunity Cost can simply be defined as the benefit
that could have acquired from the option that has been
missed or not chosen.
Time Value of Money
The concept of Time Value of Money is that the
money today will be worth the money
tomorrow. That means, future money is equal to
the present money and time.

8. Purchasing Power
As the name suggests, Purchasing Power is
the quantity of services of goods that can be
purchased with the particular unit of
currency.

9. Components of Economics
Consumption: when good are used to satisfy human
needs, it is called consumption.
Production: When we add or increase the
effectiveness of a commodity, it is called Production.
Distribution: Distribution is defined as distributing
the income that has been received from the
production.

10. Basic Economic
Problems
W h a t t o P r o d u c e ?
H o w t o P r o d u c e ?
F o r W h o m t o P r o d u c e ?
W h a t P r o v i s i o n s h o u l d
b e m a d e f o r e c o n o m i c
g r o w t h ?

11. W H A T T O P R O D U CE?
When the resources are limited, society needs
to decide what goods or services needs to be
produced and at what quantity.
H O W T O P R O D U CE?
Once it is decided what needs to be produced,
the next issue is how it can be produces, what
techniques can be used so less time and money
is consumed.

12. FO R W H O M T O P R O D U CE?
The society cannot fulfil the needs of every
individual so it needs to be decided for whom
the goods or services will be produced.
W H A T P R O V IS IO N S H O U L D B E M A D E
FOR ECONOMI C G R O W T H ?
Whatever decision is taken by the society, one
thing that is important is economic growth. A
part of resources should be kept for future as
we cannot use all the resources to fufil present
needs.

13. Branches
o
f
Economics
M ICR O ECO N O M ICS
The branch of economics that
focus on the decisions individual
firms and consumers. It analyses
the decisions, techniques of
individual for the production.
M ICR O ECO N O M ICS
This branch of economics focus on
overall economy on both national
and international level using
economic data.

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