economics

1. By : Dhirendra Chauhan
Economics
&
Economy

2. ECONOMICS

3. “Economics is a social science and as a social
science it studies the economic behaviour of the
people and economic phenomenon”
Economics

4. Other Definition
“Economics is the study of how society uses its
limited resources. Economics is a social
science that deals with the production,
distribution, and consumption of goods and
services.”
Economics focuses heavily on the four factors of
production, which are land, labor, capital, and
enterprise

5. Subject Matter of Economics

6. Subject matter of
economics
Economics has subject mater of its own . Economics
tells how a man utilises his limited resources for the
satisfaction of unlimited wants. Man has limited amount
of time and money. He should spend time and money in
such away that he derives maximum satisfaction. A man
wants food, clothing and shelter. To get these things he
must have money. For getting money he must make an
effort. Effort leads to satisfaction.

7. Divisions of Economics The subject matter of
economics can be explained under two
approaches viz.,
1. Traditional approach
2. Modern approach.
Divisions of Economics

8. 2. Production: It is defined as the
creation of utility. It involves the processes
and methods employed in transformation
of tangible inputs (raw materials, semi- 3
finished goods, or subassemblies) and
intangible inputs (ideas, information, know
-how) into goods or services.

9. 1. Traditional approach
Traditional Approach It considered
economics as a science of wealth and
divided it into four divisions viz.,
consumption, production, exchange and
distribution
Divisions of Economics

10. 1.Consumption: It means the use
of wealth to satisfy human wants. It also
means the destruction of utility or use of
commodities and services to satisfy human
wants.

11. 3.Exchange: It implies the transfer
of goods from one person to the other. It may
occur among individuals or countries. The
exchange of goods leads to an increase in
the welfare of the individuals through
creation of higher utilities for goods and
services.

12. 4. Distribution: Distribution refers to
sharing of wealth that is produced among the
different factors of production .It refers to
personal distribution and functional
distribution of income. Functional distribution
or factor share distribution explains the share
of total income received by each factor of
production viz., land, labour, capital and
organisation

13. Economics
Micro Economics Macro Economics

14. Micro V/S Macro economics
Importance Less important
from growth and
development
point of view
More important
from growth and
development
point of view
Alternative
name
Price theory Income –
Employment
theory

15. Micro V/S Macro economics
Unit of
study
It studies the
economic behaviour
of individual
economic unit s
It is concerned
with the behaviour
of the economy an
a whole .
Focus of
study
Price determination
and allocation of
resource
Determination of
level of national
income and
employment.

16. Micro V/S Macro economics
Instruments Demand and supply Aggregate demand
and aggregate
supply
Equilibrium it analyses how
equilibrium of
producer or a
consumer or an
industry s attained
It is concerned with
determination of
economy’s
equilibrium level of
income employment
and output

17. Economy

18. Economy
Economy is the sum total of all
economic activities.
OR
Economy refers to the whole collection of
production units in an area by which
people get their living

19. Basic Activities
Basic activities of an economy
are production, consumption,
exchange , distribution , capital
formation etc.

20. Types of Economy
On the basis of nature of
economics activities economics
are classified as
1. Market Economy
2. Planned Economy
3. Mixed Economy

21. 1.Market Economy
A market economy is an economic system
in which the decisions regarding
investment, production and distribution
are guided by the price signals created by
the forces of supply and demand.

23. 2. Planned Economy
A planned economy (Also called
a command economy) is
an economic system in which a government
or ruler makes most or all of the important
decisions about the production and distribution
of goods and services in the society.

25. 3. Mixed Economy
A mixed economic system is a system that
combines aspects of both capitalism and socialism.
A mixed economic system protects private property
and allows a level of economic freedom in the use
of capital, but also allows for governments to
interfere in economic activities in order to achieve
social aims

27. Key factor
1. A mixed economy combines market, command,
and traditional economies.
2. It has both the advantages and disadvantages of
other types of economies.
3. Most countries have a mixed economy thanks to
globalization

28. THANK
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