Ncert class 12 Economics chapter -1

1. INTRODUCTION
• Think of any society. People in the society
need many goods and services in their
everyday life including
• food,
• clothing,
• shelter,
• transport facilities like roads and railways,
postal services and various other services like
that of teachers and doctors.

2. • In fact, the list of goods and services that any
individual needs is so large that
• No individual in society, to begin with, has all
the things he/she needs.

3. • Every individual has some amount of only a
few of the goods and services that she would
like to use.
• A family farm may own a plot of land,
Some grains,
Farming implements,
Maybe a pair of bullocks and also the labour
services of the family members.

4. • Some others in society may not have any
resource excepting their own labour services.
• In general, every individual in society is
engaged in the production of some goods or
services but not all of which are produced by
her.

12. Difference between Centrally
Planned Economy and Market
EconomyPlanned Economy Market Economy
owned controlled and operated by
the government
owned controlled and operated by
the private sector.
All the means of production are
owned by the government
All resources of production (land,
labour , capital and enterprise) are
private property .
Government plays the complete role. Government does not play any role.
Planning authority decides what, how
and for whom to produce.
The decision of what , how and for
whom to produce through price
mechanism.

20. MICROECONOMICS ANDMACROECONOMICS
• The subject matter of economics has been
studied under two broad branches:
Microeconomics and Macroeconomics.
• In microeconomics, we study the behaviour of
individual economic agents in the markets for
different goods and services.

23. • In macroeconomics, on the other hand,
• we try to get an understanding of the
economy as a whole by focusing our attention
on aggregate measures such as total output,
employment and aggregate price level.

24. Difference between Microeconomicsand
Macroeconomics
Factors Microeconomics Macroeconomics
Study Individual study of
economy
Aggregates and Averages
Theory Pricetheory Incometheory
Scope Narrow scope Wider scope
Method Traditional method Modern method
Equilibrium Partial General