This PPT describes the introduction of microeconomics as a branch of economics. It will be really helpful for class 12 students preparing for their board exam and also for teachers to use it as a teaching aid.
The Production Possibility Curve (PPC) shows the combinations of two goods an economy can produce with its limited resources. It illustrates the core economic problem of scarcity and choice. A PPC demonstrates that an economy must choose between different goods - it can produce more of one good only by reducing production of the other as resources are reallocated between uses. The opportunity cost of choosing one combination over another is the quantity of the forgone good.
1. The document discusses market equilibrium, which occurs at the price where the quantity demanded equals the quantity supplied. Both supply and demand factors are needed to determine the equilibrium price and quantity.
2. Market equilibrium exists where willing buyers and sellers agree on a price in a free market without government controls. At equilibrium, the market clears with no surplus or shortages.
3. The equilibrium price is found where the supply and demand curves intersect. A change in demand or supply can shift the curves and change the new equilibrium price and quantity. Multiple equilibria or no equilibrium can potentially exist depending on the curve shapes.
The document discusses the theory of demand. It defines demand and quantity demanded, and explains that demand is represented by demand schedules and curves. The law of demand states that, other things remaining equal, quantity demanded varies inversely with price. A demand curve slopes downward due to the law of diminishing marginal utility and substitution and income effects. Exceptions to the law of demand include Giffen goods. Changes in demand can occur due to changes in income, prices of related goods, or tastes and preferences.
This document discusses indifference curve analysis, which is used to analyze consumer behavior. It defines indifference curves as curves that connect combinations of goods that provide equal satisfaction to the consumer. It also discusses the assumptions of indifference curve analysis, including rationality and ordinal utility. The document outlines concepts like marginal rate of substitution, budget constraints, and the conditions for consumer equilibrium where the indifference curve is tangent to the budget line. It examines how changes in income or prices can shift budget lines and impact equilibrium. Overall, the document provides an overview of key concepts in indifference curve analysis.
Theory of Consumer Behaviour Class 12 EconomicsAnjaliKaur3
This PPT explains the consumer behaviour topic of class 12 Economics. It will be helpful for commerce students and for Teachers looking for a teaching aid.
This document discusses the concepts of cost and revenue and how they relate to profit maximization for firms. It defines key cost concepts like fixed vs variable costs, historical vs replacement costs, and private vs social costs. Cost is determined by factors like plant size, output level, input prices, productivity, technology, and management efficiency. In the short run, total costs increase with output while average costs initially decrease and then increase due to limitations on varying fixed costs. Maximizing profit requires increasing revenue and decreasing costs.
The law of equi-marginal utility states that a consumer will maximize total utility when the marginal utility per unit of expenditure is equal across all goods purchased. It assumes consumers have limited incomes and try to allocate spending in a way that equalizes the marginal utility of each item. An example is provided showing that total utility is maximized when $4 is spent on apples and $2 on bananas, since the marginal utility of each good is equal at that allocation. There are several limitations and assumptions of the law, and it is important in areas like production, consumption, exchange and public finance.
This document discusses the ordinal utility approach to consumer behavior. It provides 3 key points:
1) The ordinal utility approach differs from the cardinal utility approach in that satisfaction derived from commodities cannot be objectively measured, but can only be ranked qualitatively. Utility is measured in ordinal rather than cardinal numbers.
2) Indifference curves are used to graphically represent combinations of goods that provide equal satisfaction to the consumer. The slope of the indifference curve, known as the marginal rate of substitution, captures the rate at which a consumer will substitute one good for another.
3) Consumer equilibrium is reached when the budget constraint is tangent to the highest attainable indifference curve, meaning the marginal rate of substitution equals the
The Production Possibility Curve (PPC) shows the combinations of two goods an economy can produce with its limited resources. It illustrates the core economic problem of scarcity and choice. A PPC demonstrates that an economy must choose between different goods - it can produce more of one good only by reducing production of the other as resources are reallocated between uses. The opportunity cost of choosing one combination over another is the quantity of the forgone good.
1. The document discusses market equilibrium, which occurs at the price where the quantity demanded equals the quantity supplied. Both supply and demand factors are needed to determine the equilibrium price and quantity.
2. Market equilibrium exists where willing buyers and sellers agree on a price in a free market without government controls. At equilibrium, the market clears with no surplus or shortages.
3. The equilibrium price is found where the supply and demand curves intersect. A change in demand or supply can shift the curves and change the new equilibrium price and quantity. Multiple equilibria or no equilibrium can potentially exist depending on the curve shapes.
The document discusses the theory of demand. It defines demand and quantity demanded, and explains that demand is represented by demand schedules and curves. The law of demand states that, other things remaining equal, quantity demanded varies inversely with price. A demand curve slopes downward due to the law of diminishing marginal utility and substitution and income effects. Exceptions to the law of demand include Giffen goods. Changes in demand can occur due to changes in income, prices of related goods, or tastes and preferences.
This document discusses indifference curve analysis, which is used to analyze consumer behavior. It defines indifference curves as curves that connect combinations of goods that provide equal satisfaction to the consumer. It also discusses the assumptions of indifference curve analysis, including rationality and ordinal utility. The document outlines concepts like marginal rate of substitution, budget constraints, and the conditions for consumer equilibrium where the indifference curve is tangent to the budget line. It examines how changes in income or prices can shift budget lines and impact equilibrium. Overall, the document provides an overview of key concepts in indifference curve analysis.
Theory of Consumer Behaviour Class 12 EconomicsAnjaliKaur3
This PPT explains the consumer behaviour topic of class 12 Economics. It will be helpful for commerce students and for Teachers looking for a teaching aid.
This document discusses the concepts of cost and revenue and how they relate to profit maximization for firms. It defines key cost concepts like fixed vs variable costs, historical vs replacement costs, and private vs social costs. Cost is determined by factors like plant size, output level, input prices, productivity, technology, and management efficiency. In the short run, total costs increase with output while average costs initially decrease and then increase due to limitations on varying fixed costs. Maximizing profit requires increasing revenue and decreasing costs.
The law of equi-marginal utility states that a consumer will maximize total utility when the marginal utility per unit of expenditure is equal across all goods purchased. It assumes consumers have limited incomes and try to allocate spending in a way that equalizes the marginal utility of each item. An example is provided showing that total utility is maximized when $4 is spent on apples and $2 on bananas, since the marginal utility of each good is equal at that allocation. There are several limitations and assumptions of the law, and it is important in areas like production, consumption, exchange and public finance.
This document discusses the ordinal utility approach to consumer behavior. It provides 3 key points:
1) The ordinal utility approach differs from the cardinal utility approach in that satisfaction derived from commodities cannot be objectively measured, but can only be ranked qualitatively. Utility is measured in ordinal rather than cardinal numbers.
2) Indifference curves are used to graphically represent combinations of goods that provide equal satisfaction to the consumer. The slope of the indifference curve, known as the marginal rate of substitution, captures the rate at which a consumer will substitute one good for another.
3) Consumer equilibrium is reached when the budget constraint is tangent to the highest attainable indifference curve, meaning the marginal rate of substitution equals the
This document provides an introduction to microeconomics. It defines key economic concepts like production, consumption, investment, exchange and scarcity. It explains that economics studies how societies manage scarce resources to meet unlimited wants. The document also distinguishes between microeconomics, which focuses on individual economic decisions, and macroeconomics, which looks at aggregate outcomes for an entire economy. It introduces production possibility curves and opportunity cost as important microeconomic tools.
This document covers key concepts in microeconomics. It discusses how economics studies scarcity and the choices that must be made about allocating limited resources. It defines opportunity cost and marginal opportunity cost, explaining that increasing production of one good requires giving up production of another. It also introduces the production possibilities curve (PPC) as a way to visualize scarcity and tradeoffs, showing the maximum combinations of goods an economy can produce with its resources. The PPC slopes downward and is concave in shape.
Scarcity, choice, and opportunity costRajni Mittal
Human wants are unlimited but resources are limited, creating scarcity. This scarcity means resources have alternative uses and choices must be made. To understand an economic system, three basic questions must be answered: what gets produced, how it is produced, and who gets what is produced. What gets produced deals with deciding which consumer and capital goods to make. How it is produced concerns efficiently using resources through techniques like labor-intensive or capital-intensive methods. Who gets what is produced involves distributing income through personal distribution between individuals and functional distribution between workers, landlords, and entrepreneurs.
This document provides an introduction to economics. It defines key economic concepts like scarcity, resources, production, consumption, and capital formation. It explains that economics studies how societies allocate their limited resources. Microeconomics focuses on individual units while macroeconomics looks at the overall economy. The central problems that economies face are what and how to produce goods and services, and how to distribute them. Production possibility frontiers are used to show production tradeoffs and opportunity costs between two goods with limited resources. Marginal rates of transformation represent the tradeoff between goods on the production possibilities curve.
The document discusses demand functions and different types of demand. It defines individual and market demand functions. Individual demand function shows how demand for a commodity relates to its price, income of the consumer, tastes and other factors. Market demand function adds population size and income distribution as additional factors. The document also outlines seven types of demand: direct vs derived, domestic vs industrial, autonomous vs induced, perishable vs durable goods, new vs replacement, final vs intermediate, and individual vs market demands.
I apologize, upon reviewing the document I do not see any questions included. The document appears to provide an overview of consumer theory, indifference curves, and the analysis of demand. Please provide the specific questions you would like me to answer.
1) The document discusses the economic theory of demand, including what determines demand, the relationship between price and quantity demanded, and the factors that influence demand.
2) Key factors that determine demand include price, income, tastes and preferences, and prices of related goods. The quantity demanded at each price level is shown in a demand schedule and as a downward sloping demand curve.
3) According to the law of demand, quantity demanded increases when price decreases and decreases when price increases, assuming all other factors remain constant. Demand can shift due to changes in these other factors.
Difference between macro and micro economicsMaddali Swetha
Microeconomics studies individual economic decision-making units like consumers, firms, and industries, while macroeconomics analyzes the economy as a whole in terms of aggregate supply and demand. The key difference is that microeconomics focuses on micro-level variables and macroeconomics focuses on macro-level or economy-wide variables. Microeconomics tools include supply and demand analysis and factor pricing, while macroeconomics tools include analyzing GDP, inflation, unemployment, and other indicators of overall economic performance. Both are important areas of economics that provide insights, though each operates at different levels of analysis.
Introduction To Statistics - Class 11 - CommerceAnjaliKaur3
This PPT explains the chapter 1 of statistics for class 11. It will be helpful for students preparing for exams and for the teachers to use it as a teaching aid.
Laws are rules that are recognized as binding by the governing authority in a society or state. They aim to guide behavior, and if broken, can result in punishment being enforced through the court system or other government agencies. The development of laws plays an important role in regulating human interactions and maintaining order, safety, and justice within a community.
J.S. Mill developed Ricardo's theory of comparative costs by introducing the concept of reciprocal demand. Reciprocal demand refers to the intensity of demand one country has for another country's exports. Mill argued that terms of trade are determined by the relative strength and elasticity of reciprocal demand between countries, as represented by their offer curves. While pioneering, Mill's theory makes unrealistic assumptions and neglects supply-side factors, leading some economists to criticize it as an imperfect framework for analyzing international trade.
The document provides an overview of the Indian economy between 1950-1990. It discusses the adoption of a mixed economy model with a focus on economic planning and development in the areas of agriculture, industry, and trade. For agriculture, it describes the land reforms and Green Revolution that increased food production. Industrialization was driven by public sector expansion and import substitution policies. Five-Year Plans aimed to accelerate growth, reduce inequality, and achieve self-reliance through state-led development.
In a competitive market, supply and demand forces interact to determine an equilibrium price and quantity. At the equilibrium point:
- The quantity demanded is equal to the quantity supplied.
- There is no excess supply or demand, clearing the market.
- This equilibrium price is stable and will rule in the market, with buyers and sellers accepting this price.
This document discusses equilibrium in consumption and production using an Edgeworth box model. It explains that equilibrium occurs where the indifference curves of two consumers are tangent, known as the contract curve. General equilibrium is achieved when the contract curve touches the production possibility frontier in the Edgeworth box, establishing equilibrium in both markets simultaneously. However, general equilibrium is not unique and depends on given prices; the model assumes perfect competition and does not explain price determination.
This document discusses the concept of utility in economics. It defines utility as the satisfaction derived from consuming a good or service. Utility is subjective and varies between individuals. The document outlines two approaches to utility - the cardinal approach which views utility as measurable, and the ordinal approach which sees utility as only able to be compared. It also discusses total utility, marginal utility, diminishing marginal utility, and indifference curves in analyzing utility.
Macroeconomics deals with the aggregate or total level of key economic variables for an entire economy, such as output, consumption, investment, employment, and prices. It examines unemployment, inflation, and output growth. The document provides definitions and explanations of these macroeconomic concepts as well as the scope and importance of macroeconomics in understanding national economies and formulating policy.
Macroeconomics deals with the economy as a whole, examining aggregates like total income, output, employment and prices. It emerged as a separate field of study due to Keynes' analysis of the Great Depression when existing theories failed to explain high unemployment. The circular flow model illustrates how income and spending circulate between producers and consumers in an economy.
This document provides an overview of economics, including microeconomics and macroeconomics. It defines economics as the study of how individuals, markets, and countries seek to maximize satisfaction and profits with limited resources. Microeconomics examines decisions of individuals and businesses regarding prices and resource allocation, while macroeconomics studies whole economies and how government policies affect aggregates like output and inflation. The document also outlines different economic systems, terms, the scope and methodologies of economics, and some basic economic problems around production.
Consumer Equilibrium by Indifference Curve AnalysisMohammed Jasir PV
This document provides an overview of consumer equilibrium through indifference curve analysis. It defines key concepts such as indifference curves, which represent combinations of goods that provide equal satisfaction to a consumer; indifference maps, which depict a consumer's complete preferences through a set of indifference curves; and budget lines, which show the combinations of two goods that can be purchased with a fixed income and prices. It explains that consumer equilibrium is reached at the point where the budget line is tangent to the highest attainable indifference curve, maximizing satisfaction within a limited budget.
This document discusses the importance and uses of microeconomics. It explains that microeconomics helps understand how economies operate by examining resource allocation, production and consumption efficiency, and economic welfare. It also discusses how microeconomics provides tools for business and economic decision making, such as determining optimal production levels, prices, and government policies. Finally, the document notes that microeconomics is useful for efficiently managing resources, making trade and exchange rate decisions, and predicting economic trends.
The document provides an overview of key economic concepts from an introductory economics textbook. It defines economics as the study of choice under scarcity and discusses the three economic questions of what, how, and for whom to produce. It also outlines the key principles of economics, including opportunity cost, marginal analysis, voluntary exchange, diminishing returns, and the difference between real and nominal values. The document uses examples and diagrams to illustrate these fundamental economic concepts.
This document provides an overview of introductory economics concepts. It begins by defining key terms like economics, microeconomics, macroeconomics, and scarcity. It then discusses the basic concepts of supply and demand, explaining the supply-demand curve and factors that can cause shifts in supply and demand. The document also covers price stability, full employment, economic growth, and other basic objectives of economics. It provides examples of inflation and its causes. Overall, the document presents foundational microeconomics concepts.
This document provides an introduction to microeconomics. It defines key economic concepts like production, consumption, investment, exchange and scarcity. It explains that economics studies how societies manage scarce resources to meet unlimited wants. The document also distinguishes between microeconomics, which focuses on individual economic decisions, and macroeconomics, which looks at aggregate outcomes for an entire economy. It introduces production possibility curves and opportunity cost as important microeconomic tools.
This document covers key concepts in microeconomics. It discusses how economics studies scarcity and the choices that must be made about allocating limited resources. It defines opportunity cost and marginal opportunity cost, explaining that increasing production of one good requires giving up production of another. It also introduces the production possibilities curve (PPC) as a way to visualize scarcity and tradeoffs, showing the maximum combinations of goods an economy can produce with its resources. The PPC slopes downward and is concave in shape.
Scarcity, choice, and opportunity costRajni Mittal
Human wants are unlimited but resources are limited, creating scarcity. This scarcity means resources have alternative uses and choices must be made. To understand an economic system, three basic questions must be answered: what gets produced, how it is produced, and who gets what is produced. What gets produced deals with deciding which consumer and capital goods to make. How it is produced concerns efficiently using resources through techniques like labor-intensive or capital-intensive methods. Who gets what is produced involves distributing income through personal distribution between individuals and functional distribution between workers, landlords, and entrepreneurs.
This document provides an introduction to economics. It defines key economic concepts like scarcity, resources, production, consumption, and capital formation. It explains that economics studies how societies allocate their limited resources. Microeconomics focuses on individual units while macroeconomics looks at the overall economy. The central problems that economies face are what and how to produce goods and services, and how to distribute them. Production possibility frontiers are used to show production tradeoffs and opportunity costs between two goods with limited resources. Marginal rates of transformation represent the tradeoff between goods on the production possibilities curve.
The document discusses demand functions and different types of demand. It defines individual and market demand functions. Individual demand function shows how demand for a commodity relates to its price, income of the consumer, tastes and other factors. Market demand function adds population size and income distribution as additional factors. The document also outlines seven types of demand: direct vs derived, domestic vs industrial, autonomous vs induced, perishable vs durable goods, new vs replacement, final vs intermediate, and individual vs market demands.
I apologize, upon reviewing the document I do not see any questions included. The document appears to provide an overview of consumer theory, indifference curves, and the analysis of demand. Please provide the specific questions you would like me to answer.
1) The document discusses the economic theory of demand, including what determines demand, the relationship between price and quantity demanded, and the factors that influence demand.
2) Key factors that determine demand include price, income, tastes and preferences, and prices of related goods. The quantity demanded at each price level is shown in a demand schedule and as a downward sloping demand curve.
3) According to the law of demand, quantity demanded increases when price decreases and decreases when price increases, assuming all other factors remain constant. Demand can shift due to changes in these other factors.
Difference between macro and micro economicsMaddali Swetha
Microeconomics studies individual economic decision-making units like consumers, firms, and industries, while macroeconomics analyzes the economy as a whole in terms of aggregate supply and demand. The key difference is that microeconomics focuses on micro-level variables and macroeconomics focuses on macro-level or economy-wide variables. Microeconomics tools include supply and demand analysis and factor pricing, while macroeconomics tools include analyzing GDP, inflation, unemployment, and other indicators of overall economic performance. Both are important areas of economics that provide insights, though each operates at different levels of analysis.
Introduction To Statistics - Class 11 - CommerceAnjaliKaur3
This PPT explains the chapter 1 of statistics for class 11. It will be helpful for students preparing for exams and for the teachers to use it as a teaching aid.
Laws are rules that are recognized as binding by the governing authority in a society or state. They aim to guide behavior, and if broken, can result in punishment being enforced through the court system or other government agencies. The development of laws plays an important role in regulating human interactions and maintaining order, safety, and justice within a community.
J.S. Mill developed Ricardo's theory of comparative costs by introducing the concept of reciprocal demand. Reciprocal demand refers to the intensity of demand one country has for another country's exports. Mill argued that terms of trade are determined by the relative strength and elasticity of reciprocal demand between countries, as represented by their offer curves. While pioneering, Mill's theory makes unrealistic assumptions and neglects supply-side factors, leading some economists to criticize it as an imperfect framework for analyzing international trade.
The document provides an overview of the Indian economy between 1950-1990. It discusses the adoption of a mixed economy model with a focus on economic planning and development in the areas of agriculture, industry, and trade. For agriculture, it describes the land reforms and Green Revolution that increased food production. Industrialization was driven by public sector expansion and import substitution policies. Five-Year Plans aimed to accelerate growth, reduce inequality, and achieve self-reliance through state-led development.
In a competitive market, supply and demand forces interact to determine an equilibrium price and quantity. At the equilibrium point:
- The quantity demanded is equal to the quantity supplied.
- There is no excess supply or demand, clearing the market.
- This equilibrium price is stable and will rule in the market, with buyers and sellers accepting this price.
This document discusses equilibrium in consumption and production using an Edgeworth box model. It explains that equilibrium occurs where the indifference curves of two consumers are tangent, known as the contract curve. General equilibrium is achieved when the contract curve touches the production possibility frontier in the Edgeworth box, establishing equilibrium in both markets simultaneously. However, general equilibrium is not unique and depends on given prices; the model assumes perfect competition and does not explain price determination.
This document discusses the concept of utility in economics. It defines utility as the satisfaction derived from consuming a good or service. Utility is subjective and varies between individuals. The document outlines two approaches to utility - the cardinal approach which views utility as measurable, and the ordinal approach which sees utility as only able to be compared. It also discusses total utility, marginal utility, diminishing marginal utility, and indifference curves in analyzing utility.
Macroeconomics deals with the aggregate or total level of key economic variables for an entire economy, such as output, consumption, investment, employment, and prices. It examines unemployment, inflation, and output growth. The document provides definitions and explanations of these macroeconomic concepts as well as the scope and importance of macroeconomics in understanding national economies and formulating policy.
Macroeconomics deals with the economy as a whole, examining aggregates like total income, output, employment and prices. It emerged as a separate field of study due to Keynes' analysis of the Great Depression when existing theories failed to explain high unemployment. The circular flow model illustrates how income and spending circulate between producers and consumers in an economy.
This document provides an overview of economics, including microeconomics and macroeconomics. It defines economics as the study of how individuals, markets, and countries seek to maximize satisfaction and profits with limited resources. Microeconomics examines decisions of individuals and businesses regarding prices and resource allocation, while macroeconomics studies whole economies and how government policies affect aggregates like output and inflation. The document also outlines different economic systems, terms, the scope and methodologies of economics, and some basic economic problems around production.
Consumer Equilibrium by Indifference Curve AnalysisMohammed Jasir PV
This document provides an overview of consumer equilibrium through indifference curve analysis. It defines key concepts such as indifference curves, which represent combinations of goods that provide equal satisfaction to a consumer; indifference maps, which depict a consumer's complete preferences through a set of indifference curves; and budget lines, which show the combinations of two goods that can be purchased with a fixed income and prices. It explains that consumer equilibrium is reached at the point where the budget line is tangent to the highest attainable indifference curve, maximizing satisfaction within a limited budget.
This document discusses the importance and uses of microeconomics. It explains that microeconomics helps understand how economies operate by examining resource allocation, production and consumption efficiency, and economic welfare. It also discusses how microeconomics provides tools for business and economic decision making, such as determining optimal production levels, prices, and government policies. Finally, the document notes that microeconomics is useful for efficiently managing resources, making trade and exchange rate decisions, and predicting economic trends.
The document provides an overview of key economic concepts from an introductory economics textbook. It defines economics as the study of choice under scarcity and discusses the three economic questions of what, how, and for whom to produce. It also outlines the key principles of economics, including opportunity cost, marginal analysis, voluntary exchange, diminishing returns, and the difference between real and nominal values. The document uses examples and diagrams to illustrate these fundamental economic concepts.
This document provides an overview of introductory economics concepts. It begins by defining key terms like economics, microeconomics, macroeconomics, and scarcity. It then discusses the basic concepts of supply and demand, explaining the supply-demand curve and factors that can cause shifts in supply and demand. The document also covers price stability, full employment, economic growth, and other basic objectives of economics. It provides examples of inflation and its causes. Overall, the document presents foundational microeconomics concepts.
𐫱 This file is especially for engineering students.
This is 'economics for engineers'.
I hope it will help you in your studies as well as university exams.😃
UNIT -1 Introductory concepts micro eco.pdfProvashBiswas6
This document provides an introduction to microeconomics concepts including the meaning of economics, the two branches of economics (microeconomics and macroeconomics), positive and normative economics, the concept of an economy, the three types of economies (market, centrally planned, and mixed), the central problems of an economy and how they are managed, production possibility curves, and the concept of opportunity cost. Key terms are defined and differences between microeconomics and macroeconomics and between positive and normative economics are outlined.
Introduction of Microeconomics (2).pptx0129OsmanGoni
Economics is the study of how limited resources are used to satisfy unlimited human wants. It examines scarcity and the choices that must be made as a result. There are four main productive resources - land, labor, capital, and entrepreneurship. Macroeconomics looks at aggregate economic measures like growth and inflation, while microeconomics analyzes individual markets and decision making. Positive economics makes factual statements that can be tested, while normative economics involves value judgments about how the economy should work. The three basic economic questions are what to produce, how to produce it, and who receives what is produced.
- Microeconomics is the study of individual units in an economy such as consumers and producers. It examines how scarce resources are allocated among competing ends.
- An economy is a system by which people obtain their living. There are three main types of economies: capitalist/market economies where production is privately owned, socialist/planned economies where production is centrally planned by the government, and mixed economies that have aspects of both.
- In a market economy, private individuals own resources and means of production, while in a planned economy the government owns and controls production. The key economic problem arises from scarcity of resources relative to unlimited wants, forcing choices between alternative uses of limited resources.
The document discusses the key concepts of economics. It examines how economics analyzes how institutions and technology affect prices and resource allocation, explores financial markets, examines income distribution and policy solutions to help the poor, studies the business cycle and monetary policy, analyzes international trade patterns, looks at development in poor countries, and considers how government policy pursues goals like growth and fairness.
This document provides an overview of the subject Managerial Economics. It discusses key topics that will be covered, including basics of managerial economics, demand theory, cost of production, production theory, and market analysis. The syllabus outlines suggested readings and the nature and scope of economic analysis. It defines economics and discusses concepts like scarcity, efficiency, microeconomics, macroeconomics, and the meaning and role of managerial economics. It also covers decision making, factors that affect decision making like certainty, risk and uncertainty, and the steps involved in managerial decision making.
The document provides an overview of the objectives, content, and key concepts of managerial economics. It discusses how managerial economics applies economic analysis to business problems and decisions. Some of the main topics covered include demand and supply analysis, production costs, market structures, pricing practices, and opportunity costs. Scarcity, production possibility frontiers, and the role of markets and governments in allocating resources are also summarized.
Managerial Economics
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Subject: MANAGERIAL ECONOMICS Credits: 4
SYLLABUS
Basics of Managerial Economics
Introduction to Economics, Basics of Managerial Economics, Introduction to Economics, Nature and Scope of
Managerial Economics, Managerial Economics & Economics Related Disciplines Interrelationship with Other
Subjects, Economics Tools
Demand Theory
Demand Analysis, Elasticity Concepts, Demand Forecasting, and Importance of Demand forecasting
Cost of Production:
Cost Analysis, Economic of Scale, Cost Reduction and Cost control, Capital Budgeting
Production Theory
Introduction to Production Concept, Production Analysis, Stage of Production, Return to Scale, Supply
Analysis
Market Analysis
Introduction to market Structure, Perfect Competition, Monopoly, Oligopoly and Pricing
Suggested Readings:
1. Managerial Economics – Analysis, Problems and Cases, P.L. Mehta, Sultan Chand Sons, New Delhi
2. Managerial Economics – Varshney and Maheshwari, Sultan Chand and Sons, New Delhi
3. Managerial Economics – D. Salvatore, McGraw Hill, New Delhi
4. Managerial Economics – Pearson and Lewis, Prentice Hall, New Delhi
5. Managerial Economics – G.S. Gupta, T M H, New Delhi
5
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NATURE AND SCOPE OF ECONOMIC ANALYSIS
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Structure
1.1 Introduction to Economics
1.2 Concept of Economics in Decision Making
1.3 Scope of Managerial Economics
1.4 Relationship between Managerial Economics and Other Subjects
1.5Tools and Techniques of Decision Making
1.6 Review Questions
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1.1 INTRODUCTION TO ECONOMICS
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This unit introduces you to the basic concepts of Economics. After going through this
unit you will come to know how Economics is helpful for Managers in their Decision
making process.
Objectives: • To analyze the concept of economics- scarcity and efficiency • Micro Economics and macro economics • Concept of managerial economics • How managerial economics differ from economics and its relationship with
management
Good morning students, the basic purpose of our studying of economics are the efficient
utilization of scarce resources. We always have to make choices amongst various
alternatives available for efficient utilization of our scarce resources. The twin theme of
economics is scarcity and efficiency. We will discuss this twin theme in detail before
coming to managerial economics.
Scarcity and Efficiency: The first question which comes here is what is Economics?
Economics is the study of how society choo.
This document outlines the syllabus for a 4-credit Managerial Economics course. It covers topics such as demand theory, cost of production, production theory, and market analysis. The course introduces economic concepts useful for managerial decision making, including price and income elasticity of demand, cost and output relationships, and different market structures. It also discusses the role of economics in addressing the three fundamental problems of any economy: what to produce, how to produce, and for whom to produce. Managerial decision making involves identifying problems, generating alternatives, selecting a solution, and implementing and evaluating it.
This document outlines the key topics and concepts covered in Chapter 1 of the textbook "Introduction to Economics and the Economy" by McConnell and Brue. It begins by defining economics and the economic perspective, including the concepts of scarcity, choice, opportunity cost, and marginal analysis. It then distinguishes between microeconomics and macroeconomics, and positive and normative economics. Other major sections cover the individual's and society's economizing problems, the production possibilities model and frontier, economic growth, unemployment, and pitfalls to sound economic reasoning. Key graphs illustrated include budget lines, production possibility curves, and shifts representing economic growth.
This document outlines the key topics and concepts covered in Chapter 1 of the textbook "Introduction to Economics and the Economy" by McConnell and Brue. It discusses the economic perspective including scarcity, choice, opportunity cost and marginal analysis. It distinguishes between microeconomics and macroeconomics, and positive and normative economics. It explains the individual's and society's economizing problems and how production possibility frontiers can illustrate increasing opportunity costs and economic growth. It also covers unemployment, economic growth, and potential pitfalls in economic reasoning.
Introduction to Managerial Economics, What is Business Economics, Definition,SCOPE OF ECONOMICS, Scope of BE in Managerial Decision Making, Role of business economics,Comparing Business Economics And Economics, Relevance of Business Economics, Factors of Production, CENTRAL PROBLEMS OF AN ECONOMY OR BASIC ECONOMIC PROBLEMS
This document provides an overview of engineering economics and key economic concepts. It discusses:
1. The unit introduces engineering economics and covers topics like demand analysis, elasticity, and forecasting techniques.
2. It defines economics and explains that economics studies how individuals and nations earn and spend money.
3. The key steps in engineering economic studies are outlined as the creative, definition, conversion, and decision steps.
This document provides an overview of engineering economics and managerial economics. It defines economics as the study of human activity and wealth at both the individual and national levels. It then discusses key concepts in engineering economics like the four steps of planning an economic study. Microeconomics is defined as the study of individual consumers and firms, while macroeconomics is the study of aggregate economic activity at the national level. Finally, it outlines the scope of managerial economics, including demand analysis, pricing strategies, production and cost analysis, and resource allocation.
The document discusses key economic concepts related to scarcity, production, and systems. It addresses that human wants are unlimited but resources are scarce, so economies must answer basic questions about what, how, and for whom to produce. Production requires inputs of land, labor, and capital to transform into goods and services. The production possibility frontier model illustrates the tradeoffs between different goods that can be produced based on available resources. Economic systems differ in how they coordinate production and allocation of goods through mechanisms like markets, prices, and central planning.
Economics, Theory of Demand & Supply, Micro & Macro Economy, Economy of Scale...samiyatazeen2
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.
Scarcity is a fundamental economic concept that refers to limited resources being insufficient to fulfill all human wants. The four main types of resources are land, labor, capital, and entrepreneurship. Economics is the study of how individuals and societies deal with scarcity by making choices about what to produce, how to produce it, who receives what is produced, and how resources are allocated. Microeconomics analyzes individual units like households and firms, while macroeconomics analyzes aggregates for the overall economy. Key economic assumptions include rational choice by consumers and profit-maximizing firms, and the concept of equilibrium where benefits and costs are balanced.
Rearranged by Warawut Ruankham
Economics Major, School of Management, MFU
This handbook is suitable for beginners who willing to study economics. The purpose is for self-study only, not for reference.
Reference:
วันรักษ์ มิ่งมณีนาคิน. (2552). หลักเศรษฐศาสตร์จุลภาค. พิมพ์ครั้งที่ 19. กรุงเทพฯ:สำนักพิมพ์มหาวิทยาลัยธรรมศาสตร์.
ศุภชัย ศรีสุชาติ (2546). แนวบรรยายวิชาเศรษฐศาสตร์เบื้องต้น ( ศ.210 ). มหาวิทยาลัยธรรมศาสตร์. กรุงเทพฯ.
คิม ไชยแสนสุข และ สุกัญญา ตันธนวัฒน์ (2556). หลักเศรษฐศาสตร์ธุรกิจ. สืบค้นจากhttp://mba.sorrawut.com/wiki
Bade, R., and Parkin, M. (BP): Foundations of Microeconomics, 4rd edition. Pearson Addison Wesley.
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2. Synopsis
• Meaning of Goods, Services, Individual, Resource.
• Meaning of Economics
• Economy
• Types of Economy/ Organisation of Economic Activities
• Economic problem
• Why an economic problem arise
• Central problem of economy
• Production Possibility Frontier
• Positive and Normative Economics
• Microeconomics and Macroeconomcs
3. Key Terms
• Goods: It means physical, tangible objects used to
satisfy people’s wants and needs.
• Services: It means the intangible satisfaction of
wants and needs.
4. Key Terms
• Individual: It means an individual decision making
unit, it can be a person or a group like a household, a
firm etc.
• Resource: It means those goods and services which
are used to produce other goods and services. For
instance, land, labour, tools and machinery. Etc.
5. Meaning of Economics
• Economics is concerned with the study
of economic problems that arise
because human wants are unlimited
and resources to satisfy those wants
and limited or scarce and these scarce
resources have alternative uses.
• Economics focuses on the rational
management of scarce resources in
order to maximize economic welfare.
Hence, economics is about making
choices in the backdrop of scarcity.
6. Economy
A system in which people get a living to satisfy their wants
through the processes of Production, Consumption, Investment
and Exchange. It has four components:
1. Production: It is defined as ‘creation of utility’. It is process in
which inputs are transformed to goods or services.
2. Consumption: It is a process by which a good or a service is
completely used up.
7. Economy
3. Investment: Part of production which is committed
for earning future income.
4. Exchange: It means the process by which ownership
is transferred from seller to buyer for a
consideration.
8. Types or Organisation of Economy
1) Market Economy/ Capitalist/ Free Economy: All
important decisions regarding production,
consumption and exchange of G&S are made
through market i.e., forces of demand supply
intersect and decides the price and quantity
2) Centrally Planned Economy / Socialist /
Controlled Economy: All important decisions
regarding production, exchange and
consumption of G&S are made by government
3) Mixed Economy: An economy in which some
important decisions are taken by government
and the economic activities are conducted
through the market.
9. Economic Problems & its emergence
Economic problem means problem of choice arising out
due to limited resources having alternative uses. Main
causes of economic problems:
1. Human wants are unlimited
2. Resources are limited
3. Resources have alternative uses
10. Central Problems of the Economy
Any economy faces below mentioned problems:
1. What to produce and in what quantity?
Luxury goods, inferior goods, capital goods or consumer goods
2. How are these goods produced?
Problem of choice of technique.
3. For whom to produce?
Distribution of income among all factors of production
4. Growth of Resources & Sustainable Development
Economic development that meets the needs of the present without
compromising the ability of future generation to meet their own needs.
11. Production Possibility Curve
Production Possibility Curve is a curve, which
shows the various alternative production possibilities of
two goods that can be produced with given resources
and techniques of production.
It is also known as transformation curve or production
possibility frontier. It is an important tool to solve the
central economic problems.
13. Assumptions of PPC
1) The resources available are fixed.
2) The technology remains unchanged.
3) The resources are fully employed.
4) The resources are not equally efficient in production
of all the goods. So, if resources are transferred from
the production of one good to another, the Marginal
Opportunity Cost increases.
15. Properties Of PPC
It is a downward sloping curve from left to right. It is so
because to increase the production of one good, we
have to decrease the production of the other. Because
of this inverse relation, PPC is negatively sloped.
The shape of the Production Possibility Curve is
concave to the origin. It is so because the Marginal
Opportunity Cost tends to rise.
16. Marginal Opportunity Cost
The Marginal Opportunity Cost is the rate at which the
quantity of output of one commodity is sacrificed to
produce one more unit of the other commodity.
17. Shape Of PPC
The shape of PPC depends on Marginal Rate of
Transformation, as stated below:
1)If MRT is rising, then PPC will be concave to the origin which is
always the case.
1)If MRT is constant, then PPC will be a straight line.
3) If MRT is falling, then PPC will be convex to the origin which is
the best shape.
18. Shift of PPC
The Production Possibility Curve will shift under
the following two conditions:
Change in resources.
Change in technology of production for both the
goods.
19. Rotation Of PPC
The Production Possibility Curve will rotate outward
under the following two conditions:
Improvement in technology in favour of one
commodity.
Growth of resources for the production of one
commodity.
20. Opportunity Cost
Opportunity cost for a commodity
is the amount of other commodity
that has been foregone in order to
produce the first, as production of
all the goods cannot be increased
simultaneously.
Because of its importance in
economics, sometimes
opportunity cost is also called the
economic cost.
21. Positive and Normative Economics
Positive economics is objective and fact based, while normative
economics is subjective and value based.
Positive economic statements do not have to be correct, but
they must be able to be tested and proved or
disproved. Normative economic statements are opinion based,
so they cannot be proved or disproved.
In positive economics analysis we study how the different
mechanisms function and in Normative economics we try to
understand whether these mechanisms are desirable or not.
23. Microeconomics & Macroeconomics
The difference between micro and macro economics is
simple. Microeconomics is the study of economics at an
individual, group or company level. Macroeconomics,
on the other hand, is the study of a national economy
as a whole.
Microeconomics focuses on issues that affect
individuals and companies. Macroeconomics focuses
on issues that affect the economy as a whole.
24. Thank You!
Lesson by:
Anjali Kaur Suri
TGT Maths, PGT Economics
M.A. (Economics), M.Com (Finance), PGD Banking & Finance, B.A. Hons (Economics), B.Ed (Maths
& SST), NISM, NSDL and IELTS certified.
For enquiries, email contact@geniusedu.co.in