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Published byMorris Cunningham Modified over 9 years ago
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Introduction to Economics Ms. Mangal Gogte
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Basic Concepts Scarcity: People do not have as much of everything as they want Choice: Wants unlimited, means limited and have alternative uses Value: in-use & in-exchange Opportunity cost, Real cost & Money cost Positive ( What is: descriptive) Normative Economics ( What ought to be: value judgement )
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Consumer & Producer (goods or services) Consumer’s Surplus & producers Surplus Circular flow of National Income Objectives: Utility (satisfaction level) & Profit Demand: inversly related to Price Q = f (P, Y, F, T, future trends….) Supply: directly related to Price Elasticity of Demand
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Market - Price determination Factor and product market Economic Systems Perfect & Imperfect Market (Monopoly, duopoly, monopolistic competition…..)
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Resources Efficiency Production Possibility Distribution – Rent, wages, interest & Profit Ricardo’s Rent theory – Marginal Land Marginal Productivity & wages Production Function: Q = f (a, b, c,………n, ¯ ) Long-run & Short-run T
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Law of non-proportional output ( Law of variable proportions) - Increasing returns - Diminishing returns - Negative returns Laws of Reruns to scale- - Increasing returns - Constant returns - Diminishing returns Optimum firm and Equilibrium firm Objectives of the firm
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