micro economics plus two topics

1. WELCOME

2. Part 1 Micro economics

3. DEFINITION OF ECONOMICS WEALTH DEFINITION By Adam smith Defined economics as a science of wealth His book An enquiry in to the nature and causes of the wealth of nations. Published in1776 Considers material wealth only Economics studies wealth getting and spending activities

4. Welfare definition by Alfred Marshall 1.Economics is the science of human welfare 2. Study of mankind in the ordinary business of life 3. Economics is a social science 4. Study only economic activity

5. Scarcity definition SCRCITY DEFINITION By Lionel Robbins The important features are 1.Economics is a positive science 2. It is the study of human behavior 3.Our wants are unlimited 4.Resources are limited Resources can be put in to alternative uses

6. Development concept BY PAUL A SAMUELSON Economic problem arises because of unlimited wants and scarce means Wants have the tendency to increase in the modern dynamic economic system Economics suggest means to the problem of unemployment production , inflation It explains how the resources are distributed

8. WHY DO ECONOMIC PROBLEM ARISE? Why do Economic Problem arise { {{{ UNLIMITED WANTS DIFFERENT PRIORITIES LIMIOTED MEANS MEANS HAVING ALTERNATIVE USES

9. CENTRAL PROBLEMS OF AN ECONOMY Whom to produce Problem Of Efficiency HOW TO PRODUCE WHAT TO PRODUCE Better utilization of resources Problem of choice Capital intensive or labour intensive Problem of distribution

10. PRODUCTION POSSIBILITY FRONTIER It is a curve which shows the various combination of two goods that can be produced with given technology It is downward sloping because more production of one good is associated with less of the other GOOD B 0 good A

11. Production possibility curve

13. OPPURTUNITY COST MEANS WHAT ONE GET FROM THE NEXT BEST USE If a manager get RS 5000 as salary from firm A He will select another occupation only if he get the same or higher salary Then the opportunity cost is RS 5000 It is also called transfer earning

14. Marginal Opportunity Cost The rate at which one commodity is sacrificed for production of additional unit of the other

15. NORMATIVE ECONOMIC ANALYSIS It is a matter of opinion It is the desirability of economic mechanism Value judgment It considers what is desirable and what is not desirable