Economics is the study of how people allocate scarce resources for production, distribution, and consumption, both individually and collectively. The two branches of economics are microeconomics and macroeconomics. Economics focuses on efficiency in production and exchange. Demand and supply is one of the most integral aspects of economics. The theory defines the relationship between the price of the commodity and the willingness of the buyers to either buy or sell that commodity. The theory of demand and supply is based on the law of demand and the law of supply. The two laws come together to determine the actual market price and the volume of commodities in a market. The law of supply and demand combines two fundamental economic principles describing how changes in the price of a resource, commodity, or product affect its supply and demand.

1. Economics
Theory of Demand & Supply,
Micro & Macro Economy,
Economy of Scale,
Urban & Rural Economy
Humanities And
Built Environment
MAP 114
Submitted to
Ar. Rajni Taneja
Submitted by
Samiya Tazeen
M.Arch (Pedagogy)
1st semester

2. Economics is the study of how people allocate scarce
resources for production, distribution, and consumption, both
individually and collectively. The two branches of economics
are microeconomics and macroeconomics. Economics focuses
on efficiency in production and exchange.

4. Demand and supply is one of the most integral aspects of economics.
● The theory defines the relationship between the price of the
commodity and the willingness of the buyers to either buy or sell that
commodity.
● The theory of demand and supply is based on the law of demand and
the law of supply. The two laws come together to determine the
actual market price and the volume of commodities in a market.
● The law of supply and demand combines two fundamental economic
principles describing how changes in the price of a resource,
commodity, or product affect its supply and demand.

5. Demand is when a customer desires for a particular commodity at
the given price in which they are ready to buy in one market at
different prices during a certain period of time. Hence, there can
be two aspects of demand:
 WILLINGNESS TO BUY: Customer’s desire for the product
 ABILITY TO PAY: Customer’s purchasing power to pay the price
for the desired commodity.
The demand of the customers depends upon their needs and
preferences. Hence, to create demand in the market, the following
are essential:
 Desire for the commodity.
 Means to purchase the commodity.
 Willingness to use those means for purchasing the commodity.
THEORY
OF
DEMAND
AND
SUPPLY
An economic law stating that as the price of a good or service
increases, the quantity demanded decreases, and vice versa

6. Supply refers to the quantity of a commodity or service that is
offered by the manufacturer at various prices to the customers
during a given point of time. Hence, the determinants of supply
are:
 WILLINGNESS: The quantity of the commodity that the
producers are willing to sell at various prices
 ABILITY TO SUPPLY: The quantity of the commodity available
with the producers to sell at a point of time.
The supply can be of any commodity that a particular firm has
offered to sell in the market.
THEORY
OF
DEMAND
AND
SUPPLY
An economic law stating that as the price of a good or service
increases, the quantity supplied increases, and vice versa

7. The study of economics is broadly divided into
two categories:
● Micro Economics
● Macro Economics.

8. MICRO
&
MACRO
ECONOMICS
It is a small part of whole economics which deals with individuals,
their needs, their behaviour, individual firms and its activities.
This deals with studies like:
● Incomes,
● Capital Spending On Building,
● Individuals Who Are Engaged In Various Products For Building
Construction.
It cannot give an idea of the function of the economy as a whole.
It assumes full employment which is a rare phenomenon in developing
countries or even developed countries which is quite unrealistic.
Micro-Economics is also called PRICE THEORY

9. ● It analyses how millions of consumers and producers in an
economy take decisions about products and services offered.
● It also deals with how buildings and services are distributed
belonging to different economic status.
● Price Determination.
● Demand and supply: Of goods, services, and resources
● Resource allocation: How resources are allocated to produce goods
● Economic welfare: What to produce, how much, when, for whom,
and by what technique
● It cannot give an idea of the function of the economy as a whole.
● It assumes full employment which is a rare phenomenon in
developing countries or even developed countries which is quite
unrealistic.
● Ignorance of Macro Economy.
MICRO
&
MACRO
ECONOMICS

10. It deals with aggregates and averages of entire economics like:
● National Income,
● Aggregate Products,
● Aggregate Outputs,
● Total Employment,
● Total Consumption,
● Savings And Investments,
● Aggregate Demand,
● Aggregate Supply,
● General Level Of Prices.
Here it also studies how these aggregates are fluctuating
and affecting the economic growth of the country.
Micro-Economics is also called INCOME THEORY
MICRO
&
MACRO
ECONOMICS

11. ● Macroeconomics studies about the functioning of the economy as a whole
● It examines the economy through wide-lens.
● Macroeconomics studies about the total output of a nation
● The way the nation allocates its limited resources of land, labour and capital
● The ways to maximize production levels
● The techniques to promote trade
● It helps economists in finding solutions to economic problems by providing various economic theories.
● It helps in bringing stability in prices by supporting detailed analysis of fluctuations in business activities.
● It helps in identifying the causes of the shortage in the balance of payment and determining remedial
measures.
● Individual is altogether ignored.
● It overlooks individual differences, the general level of prices may be assumed
stable, but the food grains and building materials and consumer goods may
go up very high which may cause havoc for the poor and middle class.
MICRO
&
MACRO
ECONOMICS

12. ● Economy of scale is the idea that getting bigger is cheaper. It
occurs when an organization is structured in such a way that
as production volumes rise, per unit costs fall. This is based
on the idea that a product has two basic components to its
cost, fixed and variable.
● In building economics, economy of scale is a mix of labour
and fixed costs that can result in building owners going
bigger at a discount.

13. ● It reduces the per-unit fixed cost. As a result of increased
production, the fixed cost gets spread over more output than
before.
● It reduces per-unit variable costs. This occurs as the expanded
scale of production increases the efficiency of the production
process.

15. Rural economy and urban economy refer to the economic activities and systems that exist in rural and urban areas,
respectively. While both economies are interdependent and contribute to the overall economic growth of a country, they
differ in various aspects.
The rural economy is primarily based on agriculture and natural resource extraction, while the urban economy is more diverse
and includes a wide range of economic activities. Additionally, the urban economy has better infrastructure and offers more
diverse job opportunities, resulting in higher income levels and a higher quality of life.
The difference between the rural economy and urban economy:
 Size And Density Of Population: Urban areas have a higher population density compared to rural areas, which means that
more economic activities are concentrated in a smaller geographical area.
 Nature Of Economic Activities: The rural economy is primarily based on agriculture, forestry, and fishing, while the urban
economy is more diverse and includes manufacturing, trade, finance, and services.
 Infrastructure: Urban areas have better infrastructure in terms of transportation, communication, and utilities, which
facilitates the movement of goods, services, and people.
 Employment Opportunities: Urban areas offer more diverse employment opportunities compared to rural areas, which rely
heavily on agriculture.
 Income Levels: Income levels are generally higher in urban areas due to the availability of more lucrative job opportunities.
 Quality Of Life: Urban areas offer better access to education, healthcare, and entertainment compared to rural areas.

17. Thank you