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…….