This document discusses key concepts in microeconomics and macroeconomics. It defines microeconomics as the study of individual components, and macroeconomics as the study of aggregate components. It also defines important economic terms like independent and dependent variables, total utility, marginal utility, demand curves, and supply curves. Demand curves show the relationship between price and quantity demanded by consumers, while supply curves show the relationship between price and quantity supplied by producers.

2. A study of human behavior in ordinary
business of life
Economics is a study of social sciences that
concerned with the production, distribution,
and consumption of goods and services

3.  Micro Economics
In economics the study of individual
components is termed as micro economics.
 Macro Economics
In economics the study of aggregate
components is termed as macro-economics.
Macro means “Large, Aggregate”

5.  Independent variable:
A variable whose values
do not depend on the
values of same other
 Dependent variable:
A variable whose values do
depend on the value of
some other variable
 Slope of Gradient: m
Direct Relationship
Indirect Relationship/Inverse

6. Is the ability or power of a commodity which fulfill
human needs or desire
 Total Utility:
Overall utility received from the consumption of a
commodity
 Marginal Utility: (Additional/Extra)
Utility received from the
consumption of an additional unit.

7. Quantity
(Q)
Total Utility
(TU)
Marginal Utility
(MU)
0 - -
1 10 utils 10
2 18 utils 8
3 24 utils 6
4 28 utils 4
5 30 utils 2
6 30 utils 0
7 28 utils -2
MU = ∆TU/ ∆Q
=TU-TU/ Q – Q
=18-10/ 2-1
MU = 8 Utils

8.  Substitute Goods
 Two or more goods fulfills the same need
Complementary goods
 Jointly Consumed Goods or Utility received from
join consumption
 Like: Car= Petrol, Pen=Ink

10. Exist when consumer has:
 Ability to purchase
 Willingness to Purchase
Demand curve:
 Shows buying plan of a consumer
 Shows outside relationship between price and quantity
demanded

11.  Supply exists when from:
 Has resource and technology to
produce it
 Can profit by producing it
 Has definite plan to sell it
Supply curve
 Shows selling plan of a producer
 Show entire relationship between price and quantity
supplied