Economics Adda

▶ Demand Curve slopes Downward- It indicates more is purchased in response to fall in price. (i) Law of Diminishing Marginal Utility- This law states that as consumption of a commodity increases, Marginal Utility of each unit goes on diminishing. Accordingly for every every additional unit to be purchased, the consumer is willing to pay less and less of price. (ii) Income Effect- With fall in price of a commodity, the real income of the consumer increases. Accordingly demand for the commodity expands. ( iii) Substitution Effect- When own price of Commodity (X) falls it becomes cheaper in relation to commodity (Y). It is expansion of Demand (For X) due to Substitution Effect. (iv) Size of Consumer Group- When price of a commodity falls, many more buyers can afford to buy it. Accordingly demand for the commodity expands. (v) Different Uses- A good may have different uses. Milk, for an example, is used for making curd, butter, cheese, sweets, ice-cream etc. If price of milk...

▶ Demand- Want+Purchasing Power+Willingness to purchase. ▶ Quantity Demand- It is the specific number of Commodity which a consumer is willing to purchase at a specific price rate at a point of time. ▶ Demand- It is different number of Commodity willing to be purchased by a consumer at different price rates at a point of time. ▶ Demand Schedule- It is tabular representation of Demand. ▶ Demand Curve- It is graphical representation of Demand. ▶ Individual Demand- It is total number of Commodity willing to be purchased by an individual consumer at different price rates at a point of time. ▶ Individual Demand Schedule- It is tabular representation of Individual Demand. ▶ Individual Demand Curve- It is graphical representation of Individual Demand. ▶ Market Demand- It is different number of Commodity willing to be purchased by the whole market at different price rates at a point of time. ▶ Market Demand Schedu...

▶ Ordinal Approach- According to this approach satisfaction derived from a commodity can only be compared or ranked, it cannot be measured in terms of numbers. ◆ It was given by Allen and Hicks . ◆It is Indifference Curve Analysis Based. ▶ Indifference Curve- It is a curve which shows different combination of two Commodities which when consumed gives same level of satisfaction.    Combinations.        Good X.           Good Y            A.                       100.                 10            B.                 ...

▶ Consumer Equilibrium- It is a situation where satisfaction of a consumer is at maximum point. ◆It is studied under two approach: 1. Cardinal Approach 2. Ordinal Approach In this blog we will discuss about Cardinal Approach only. 1. Cardinal Approach- According to this approach satisfaction level of a consumer can be measured in terms of number. ● It was given by Marshall. ● Based on Utility Analysis. ◆ Utility- It is want satisfying power of a commodity. ● It is measured in two concepts: (i) Total Utility (TU) - It is the sum total of satisfaction derived from consumption of total unit of commodity.                        ● TU=€MU (ii) Marginal Utility (MU)- It is additional satisfaction derived from consumption of one extra unit of a commodity.            ...

▶ Economic Problem- It is the problem of choice arising due to problem of allocation between limited resources and unlimited wants. ▶Resources are limited and have alternative uses. ▶Wants are unlimited and have repeating nature. ▶ Central Problem Of Economics- The problem related to what to produce, how to produce and for whom to produce is consider es as central problem of economics. 1. What to Produce- (i) Capital Goods                                    (ii) Consumer Goods (i) Capital Goods- Those goods which help in production of other goods. Example: Machines (ii) Consumer Goods- Those goods which are ready to be consumed by the consumer. Example: Bread. 2. How to Produce- (i) Capital Intensive              ...

                                          ▶ Father of Economics- Adam Smith ▶ Father of Political Economics- Aristotle ▶Economics is made of two Greek words 1. Oikos - means household 2. Nomos - means to manage ▶ Economics - It is the study of rational human behaviour in relation to wants and resources in such a manner that self intrest is maximum. ▶Self Intrest is of two types: 1. Individual 2. Nation ▶ Individual is of two types: 1. Consumer - Self Intrest is satisfaction 2. Producer- Self Intrest is profit ▶ Ragner Frisch was the first person to classify Economics in two parts: 1. Micro Economics 2. Macro Economics In this blog we will read about basics of Micro Economics. ▶ Micro Economics- It is the study of rati...