MICROECONOMICS
MICROECONOMICS
ECONOMICS DEFINITION
WEALTH DEFINITION
WELFARE DEFINITION:ALFRED
MARSHALL
SCARCITY DEFINITION:
LIONEL ROBBINS
GROWTH DEFINITION:
P.SAMUELSON
Central Problems Of An Economy.
FOR WHOM TO PRODUCE?
MAINLY THE THINGS ARE PRODUCED FOR THE
PERSONS HAVING THE PURCHASING POWER..
IN SOCIALIST ECONOMY IT’S EQUAL
FOR EVERY CITIZENS…
WHAT TO PRODUCE?
HOW TO PRODUCE?In two ways:-
1.Labour intensive technique
2.Capital intensive technique
Capital Intensive Technique:-
Labour Intensive Technique:-
FOUR FACTORS OF PRODUCTION:-
WHAT WAS THE EARLY NAME OF
ECONOMICS?
WONDERED ? IT’S….
PRODUCTION POSSIBILITY FRONTIER(PRODUCTION
POSSIBILITY CURVE)
WHAT IS PRODUCTION POSSIBILITY CURVE?
A PRODUCTION POSSIBILITY CURVE IS DEFINED AS THE
LOCUS OF ALL COMBINATIONS OF TWO GOODS THAT CAN BE PRODUCED WITH GIVEN
AMOUNT OF RESOURCES THAT ARE FULLY & EFFICIENTLY
UTILISED.
POSSIBILITIESBUTTER(IN
MILLLIONS OF QUINTALS)
UNITS OF GUNS(IN THOUSANDS)
A
B
C
D
E
F
0
1
2
3
4
5
15
14
12
9
5
0
0 1 2 3 4 5 60
2
4
6
8
10
12
14
16
Guns in thousands
butter in millions of quintals
SHIFT IN POSSIBILITY CURVE:-
‘GREAT DEPRESSION’
NORMATIVE ECONOMICS
POSITIVE ECONOMICS
IN POSITIVE ANALYSIS THE CONSEQUENCES
OF AN ECONOMIC POLICY OR DECISION
ARE STUDIED.
POSITIVE ECONOMICS
IT’S A STUDY OF ECONOMICS AS A
WHOLE.IT STUDIES THE ENTIRE
ECONOMY AND IT’S AGGREGATES….’
J.M KEYNES
‘FATHER OF MACROECONOMICS’
ECONOMIC CYCLE
TYPES OF BANKS….
INFLATION:-
DEFLATION:-
OPPORTUNITY COST
Opportunity that is a left once is called
opportunity cost….
Marginal Opportunity Cost:
The Rate at which one commodity is sacrificed for production of
additional unit of the other…..
1 UNIT GOOD Y = GOOD X QUATITY.
CONCLUSION
BOTH MICRO & MACRO ECONOMICS
ARE DIFFERENT THEORY
APPROACHED DIFFERENTLY…….