The document discusses several key concepts in economics including production, consumption, distribution, exchange, and microeconomics vs. macroeconomics. It defines production as the process of converting raw materials into useful goods and defines producers as individuals who produce goods and services. Consumption is defined as the use of goods and services to satisfy wants. Distribution is the determination of prices for factors of production. Exchange involves the buying and selling of commodities. Microeconomics examines individual entities like households and firms while macroeconomics examines overall economic performance and structure at a national level.

2. ECONOMIC
ACTEIVITY
PRODUCTION
CONSUMPTION
DISTRIBUTION
INVESTMENT
EXCHANGE

3. BUT IN MODERN DAYS THREE OUT OF
FIVE CONSIDERED AS ECONOMIC
ACTIVITY.

4. PRODUCTION IS THE PROCESS OF
CONVERTING RAW MATERIALS INTO
USEFUL THINGS. THINGS BECOME
USEFUL AS THEY ACQUIRE UTILITY
VALUE IN THE PROCESS OF
PRODUCTION.
PRODUCTION

5. PRODUCER IS ONE WHO PRODUCE
AND/OR SELL GOODS AND SERVICE
FOR THE GENERATION OF INCOME
PRODUCER

6. PRODUCERS HAVE LIMITED CAPITAL WHILE
THEY HAVE A WIDE RANGE OF GOODS
AND SERVICES TO CHOOSE FROM FOR
THEIR FIRMS AND FACTORIES . GIVEN
PRICES OF DIFFERENT INPUTS, HOW DO
THEY CHOOSE SUCH COMBINATIONS
WHICH MINIMISE COST OF PRODUCTION
AND THEY EARN MAXIMUM PROFIT. THIS
IS THE STUDY OF PRODUCTION OR THE
STUDY OF PRODUCERS BEHAVIOUR.

7. WHEN WE FORMULATE A SET OF
STANDARD RELATIONSHIP WHICH
EXPLAINING THE BEHAVIOUR OF
PRODUCERS OR THEIR PRODUCTION
DECISIONS,WE CALL IT PRODUCTION
THEORY.

8. CONSUMPTION IS THAT ECONOMIC
ACTIVITY WHICH IS CONCERNCED
WITH THE USE OF GOODS AND
SERVICE FOR THE DIRECT
SATISFACTION OF INDIVIDUALS AND
COLLECTIVE WANTS.

9. A CONSUMER IS A PERSON WHO
CONSUME GOODS AND SERVICES FOR
THE SATISFACTION OF HIS/HER
WANTS.

10. CONSUMPTION ACTIVITY IS THE BASE
OF ALL PRODUCTION IF THERE WOULD
HAVE BEEN NO PRODUCTION IF THERE
WOULD HAVE BEEN NO
CONSUMPTION .

11. AS A CONSUMER PEOPLE HAVE
LIMITED MEANS (INCOME ) WHILE
THEIR WANTS ARE UNLIMITED . HOW
THEY ARE USED THEIR GIVEN /LIMITED
MEANS ON THE PURCHASE OF
DIFFERENT GOODS AND SERVICES, SO
THAT THEIR SATISFACTION IS
MAXIMISED.THIS IS THE STUDY OF
CONSUMPTION

12. WHEN WE FORMULATE A SET OF
STANDARD RELATIONSHIPS
EXPLAINING HOW CONUMER TEND TO
BEHAVE,WE CALL IT CONSUMPTION
THEORY

13. DISTRIBUTION IS THAT ECONOMIC
ACTIVITY WHICH DEAL WITH THE
DETERMINATION OF PRICE OF FACTOR
OF PRODUCTION
(LAND,LABOUR,CAPITAL,AND
ENTERPRISES).THIS IS KNOWN AS
‘FACTOR PRICING’
DISTRIBUTION

14. WHAT ARE THE ECONOMIC PRINCIPLES
ON THE BASIS OF WHICH INCOME IS
DISTRIBUTION AMONG OWNERS OF
THE FACTOROF PRODUCTION?SUCH A
STUDY IS CALLED DISTRIBUTION
THEORY IN ECONOMICS

15. A PART OF INCOME GENRATED GO TO
THE OWNERS OF LAND(USED IN
PRODUCTION)IN THE FORM OF RENT.
A PART OF GENRATED INCOME WILL
GO TO THE LABOUERS(FOR
RENDERING THEIR SERVICES) IN THE
FORM OF SALARY AND WAGES.

16. THE OWNER OF FACTOR OF
PRODUCTION VIZ.
LAND,LABOUR,CAPITAL AND
ENTERPRENEURSHIP ARE THE AGENTS
OF PRODUCTION

17. EXCHANGE IS THAT ECONOMIC ACTIVITY
WHICH IS CONCERNED WITH SALE AND
PURCHASE OF COMMODITIES,THIS BUYING
AND SELLING IS ALSO CALLED ‘PRODUCT
PRICING’ WHICH RELATES TO
DETERMINATION OF THE PRICE OF THE
PRODUCT UNDER DIFFERENT CONDITIONS
OF THE MARKET,VIZ.PERFECT
COMPETION,MONOPOLY ETC.
EXCHANGE

18. ANY THING IN THE UNIVERSE BUT
HAVE MONETARY VALUE ARE
COMMENCED IN THE BUSINESS WITH
THE PURPOSE TO INCREASE PROFIT OR
GENRATE MORE INCOME
INVESTMENTS

19. TYPES OF ECONOMICS
ECONIMICS
MICROECONOMICS MACROECONOMICS

20. MICROECONOMICS
IT IS THE BRANCH OF ECONOMICS
WHICH IS CONCERNED WITH THE
BEHAVIOUR OF INDIVIDUAL ENTITIES
SUCH AS MARKET FIRMS AND
HOUSEHOLDS

21. IT IS THE BRANCH OF ECONOMICS
DEALING WITH THE
PERFORMANCE,STRUCTURE
BEHAVIOUR AND DECISION MAKING
OF A SOCIETY.
MACROECONOMICS

22. ON THE
BASIS
ON THE
BASIS
MICROECONOMICS MACROECONOMICS
DEINITION IT IS THE BRANCH OF ECONOMICS
WHICH IS CONCERNED WITH THE
BEHAVIOUR OF INDIVIDUAL
ENTITIES SUCH AS MARKET FIRMS
AND HOUSEHOLDS.
IT IS THE BRANCH OF ECONOMICS
DEALING WITH THE PERFORMANCE
,STRUCTURE BEHAVIOUR AND
DECISION MAKING OF AN NATION
WHOLE ECONMY.
FOUNDATION THE FOUNDATION OF
MICROECONOMICS CONSITS OF
INDIVIDUAL ENTITIES
THE FOUNDATION OF
MACROECONOMICS ARE GROUP OF
ENTITIES
BASIC CONCEPT PREFERENCE RELATION,SUPPLY AND
DEMAND , OPPORTUNITY COST
OUTPUT AND INCOME UNEMPLOYMENT,
INFLATION AND DEFLATION .
APPLICATION USE TO DETERMINE METHOD OF
IMPROVEMENT FOR INDIVIDUAL
BUSINESS ENTITIES
USE TO DETERMINE AN NATION
ECONOMY OVERALL HEALTH AND
STANDARD OF LIVING BEING AND NEED
FOR IMPROVEMENT
CARRERS ECONOMIST (GENERAL) ECONOMIST(GENRAL ), PROFESSOR
RESEARCHER, FINANCIAL ADVISOR

23. SAVING IS A PART OF INCOME WHICH
IS NOT CONSUMED. IT IS ABSTINENCE
FROM CONSUMER

24. A PERSON WHO IS WORKING FOR
ANOTHER PERSON AND GETTING PAID
FOR RENDERING HIS HER SERVICES IS
CALLED A SERVICE HOLDER.
FOR e.g. –A WORKER IS BEING PAID IN
RETURN FOR THE RENDERING HIS/HER
LABOUR SERVICES TO THE PRODUCER

25. A PERSON WHO PROVIDES SERVICES
TO OTHER FOR PAYMENT IN RETURN IS
CALLED A SERVICE PROVIDER.
FOR e.g. A DOCTOR RENDER HIS/HER
MEDICAL SERVICES IN EXCHANGE OF
THE FEES PAID TO HIM/HER

26. ECONOMIC PROBLEM REFER TO THE
PROBLEM OF CHOICE THAT ARISE
FROM THE ALLOCATION OF SCARCE
RESOURCES TO VARIOUS ALTERNATIVE
USES.

27. For e.g. 1 – Rs. 10,000 can either be
used for purchase of a mobile phone or
to purchase a pair of branded shoes
due to limited availability of money
and alternate use of money(for
purchase of shoes or mobile phones)

28. OPPORTUNITY COST REFER TO THE COST
INCURRED BY MAKING A CHOICE. IN THE
ABOVE PROBLEM,IF THE CONSUMER IS
PURCHASING A PAIR OF SHOES ,THEN
HE/SHE NEED TO SACRIFICE THE BENFITS
OF A MOBILE PHONE AND VICE VERSA..
THE OPPORTUNITY COST OF PURCHASING
SHOES IS EXPRESSED IN TERMS OF
SACRIFICING THE BENEFITS OF MOBILE
PHONES