Introduction To Micro Economics

                                         
▶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 rational human behaviour in relation to wants and resources in such a manner that self intrest of individual is maximum, i.e. satisfaction for consumer and profit for producer.

▶Concept of Scarcity
When Demand is more than supply at Price zero, it is said to be Scarcity.
         ● P= 0, D > S       where, P= Price
                                               D= Demand and,
                                               S= Supply

▶On the basis of Facts and advices, Economics is classified in two parts:
1. Positive Economics
2. Normative Economics

▶Positive Economics- It is based on facts and figures, basically on truth.

▶Normative Economics- It is based on 'what ought be' or advices. It can be a matter of debate aa there is no proof of it.

▶Economy- It is a system by which people of an area earn their living.

▶Economy is of three types:
1. Capitalist Economy or Capitalism
2. Socialist Economy or Socialism
3. Mixed Economy

1. Capitalist Economy- It is the type of economy in which what to produce, how to produce and for whom to produce are left on market forces of Demand and Supply.
▶ It is profit intensive.
▶ Example:- U.S.A.

2. Socialist Economy- It is the type of economy in which what to produce, how to produce and for whom to produce are decided bt central authorities of Government.
▶ It is for social welfare.
▶ Example:- China.

3. Mixed Economy- It is the type of economy in which what to produce, how to produce and for whom to produce are decided by market forces of Demand and Supply but are influenced and regulated by central authorities of Government.
▶ It is growth oriented.
▶ Example:- India.