Classification of Elasticity The Elasticity of Demand could be of 3 types based on the factor which affects the change in the demand for a commodity. Price Elasticity of Demand Income Elasticity of Demand Cross Elasticity of Demand Measurement of the Elasticity Total Outlay Method Proportionate or Percentage Method Point Method or Geometrical Method
Economics is the study of how people make choices under conditions of scarcity. Scarcity means that there are not enough resources to meet all our wants and needs. Economics helps us to understand how people decide how to use their limited resources to get the things they want and need.
Economics is the study of how people make choices under conditions of scarcity.
This means that there are not enough resources to produce everything that people want, so people have to make decisions about how to use their limited resources.
Economics is a social science.
This means that it is a study of human behavior, and it uses methods from other social sciences, such as sociology, psychology, and political science.
Economics is a quantitative science.
This means that it uses mathematical models and statistical analysis to study economic phenomena.
Various Aspects of Economics
is the study of individual decision-making and how these decisions interact to form markets and economies.
is the study of the economy as a whole, including topics such as inflation, unemployment, and economic growth.
is the study of trade, finance, and investment between countries.
is the study of economic growth and development in low-income countries.
is the study of the government’s role in the economy, including topics such as taxation, government spending, and regulation.
Key Concepts in Economics
Supply and demand
Supply is the amount of a good or service that producers are willing to sell at a given price. Demand is the amount of a good or service that consumers are willing to buy at a given price. The price of a good or service is determined by the intersection of supply and demand.
Market equilibrium is the point at which supply and demand are equal. At market equilibrium, the price of a good or service is neither too high nor too low.
The invisible hand is a metaphor for the way that the market economy works. It is the idea that individuals acting in their own self-interest can lead to the best outcome for society.
Marginal benefit is the additional benefit that we receive from consuming one more unit of a good or service.
Marginal cost is the additional cost that we incur from producing one more unit of a good or service.
Efficiency is the situation in which we are getting the most out of our resources.
Inefficiency is the situation in which we are not getting the most out of our resources.
Economics is a complex subject, but it is also an extremely rewarding one. By understanding economics, we can better understand the world around us and make better decisions about our lives.
Meaning of the Elasticity of Demand The Elasticity of Demand is related to the Law of Demand, it is the measure of the change in the demand of a commodity with respect to the change in the price of the commodity. In simple words, elasticity of demand refers to an increase or decrease in demand,
Exceptions to The Law of Demand From the analysis of The Law of Demand, it is clear that in ordinary conditions, demand increases on decrease in price of a commodity and the demand curve falls downwards from left to right. But there are some exceptions to the law of demand and sometimes, even on decrease
Definition of The Law of Demand The law of demand states that other things remain the same, a decrease in prices causes an increase in demand and an increase in prices causes a decrease in demand. This law is based on The Law of Diminishing Utility which states that as we keep purchasing a commodity its
Definition of Total Utility At a given time the overall utility derived from the consumption of all units of a commodity is called Total Utility.
Definition of Marginal Utility Marginal Utility is the utility which is derived from the consumption of an additional unit of a commodity. In other words, it is the addition to total utility, resulting from adding one unit to the consumption of a commodity. Example : Ram consumes 6 ice creams at a time. In this case,
Difference Between Micro and Macro Economics Micro and Macro economics, both are absolutely vital and a person is only half educated it he understand the one, while being ignorant of the other.
Meaning of Macro Economics The word macro means big. Thus, in Macro Economics, either the whole economy is studied or those big units which are related to the economy as a whole. Definition In the words of Prof. Boulding Macro Economics deals not with individual quantities as such but aggregates of these quantities, not with individual
Introduction to Micro Economics In the present times, the study of economics is done from two viewpoints namely Micro and Macro. From the first viewpoint, the economic problems of various units, like – individuals, families, firms etc. are studied individually, whereas; from the second viewpoint, the same units of persons, families, firms etc., are studied in
Similarities Between The Definition Of Marshall And Robbins The following similarities are found in the definitions Of Prof Marshall and Prof Robbins