Economics

CONCEPT OF UTILITY Meaning : The term utility refers to the quality of a commodity by virtue of which it can satisfies our wants. In other words utility can be called as a want satisfying power of a commodity. Utility is an economic concept that differs from pleasure and usefulness of a commodity .It is further assumed that utility can be measured cardinally i.e it is possible to know exactly the number of units of utility that a commodity contains for the consumer . The unit of measurement of utility may be called as utils. Types   a) Total utility : It is the sum total of the utility derived from the consumption of all the units of a commodity.  For instance , if 2 units of a commodoty are consumed and ist unit yields satisfaction of 10 utils ,while the 2nd unit yields satisfaction of 9 utils ,then the total utility TU is 10+9 utils i.e 19 utils . b) Marginal utility . It refers to additional utility on the account of consumption of an additional unit of a commodity . For ...

BASIC CONCEPTS a) Goods : In economics, anything that is capable of satisfying human want is called as Goods. Things like food, clothing, cars, house etc are desirable goods.  The classification of goods are as under 1) Material and non-material goods :  Material goods are those goods which can be transferred from one person to another. These are tangible in nature . Examples - scooter, car, air conditioner Non -material goods are those goods which are services in general . Examples -The job which is done by teachers,doctors,soldiers are services. 2) Economic goods and free goods : Economic goods are those goods which are produced by men and have specific price in the market. These are scarce goods. Examples -food items,footwear,entertainment Free goods are those goods which are gifts of nature and are unlimited . Examples -air,sunlight,water falls. 3) Public and private goods : Public goods are those goods which are owned and maintained by government bodies. These goods c...

COMPARATIVE LOOK OF MARSHALL'S AND ROBBINS' DEFINITION Similarities between Marshall's and Robbins' definition a) Wealth and scarce means : Marshall used the word "wealth" in his material welfare definition of economics. Lord Robbins has used the word " scarce resources" instead of wealth.The meaning of two is same because in economics wealth is only that good which is scarce. b) Primary place to man : Both Marshall and Robbins gave primary place to man . Marshall studied wealth for human welfare. Robbins also studied human behaviour as relationship between scarce means and ends that have alternative uses. c) Rational man : Marshall as well as Robbins assumed that only rational man forms the subject of study of economics . Marshall assumed that man aims at maximizing his welfare whereas Robbins believed that rational man tries to maximise his satisfaction. Differences between Marshall's and Robbins' definition a) Economic and Non-economic ac...

ROBBINS DEFINITION OF SCARCITY OF RESOURCES Introduction Lord Robbins gave his scarcity of resources definition in his book " An Essay on the Nature and Significance of Economic Science " published in 1932. According to him, "economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses". Central idea of the definition Lord Robbins' definition is based on a number of facts of life : a) wants are limited. b) means to satisfy human wants are limited. c)means can be put to different uses. d)the problem of choice of using limited means to satisfy unlimited wants. Much of man's economic activity is moving around the problem of scarcity of choice .This is the Central idea of the Robbins definition. Features of the definition a) Unlimited wants : Robbins calls wants as the ends which can be either economic or non economic type . Economic ends are unlimited . It is impossible to satisfy all of man...

MATERIAL WELFARE DEFINITION OF MARSHALL   Introduction   MARSHALL gave a new definition in the 19th century where he gave more emphasis to human welfare than to wealth.He thus gave primary importance to man and secondary to wealth. Statement This definition was given by MARSHALL in his book " Principles Of Economics " .According to him,"Economics is a study of mankind in the ordinary buisness of life. It examines that part of individual and social action which is most closely connected with the attainment and with the use of material requisites of well being". Characteristics of definition a) Study of mankind : Economics is the study of economic activities which are concerned with the material welfare of man. b) Study of individual and social action :Economics studies the personal and social activities of the man which are concerned with the material welfare. It is a study of individual on the one hand and social organisations on the second hand  c)  Study of materi...

INTRODUCTION The set of definitions given by various economists fall into 3 categories  1) as a science of wealth by ADAM SMITH 2) as a science concerning material welfare of man by MARSHALL 3) as a science dealing with the problem of allocation of scarce resources among competing ends by ROBIN ADAM SMITH'S Definition Of Economics as a SCIENCE OF WEALTH. Introduction   The first view is associated with the name of Adam Smith and his disciples . They regarded Economics as a science which studied the process of production and consumption of wealth. The emphasis on wealth is contained in Adam Smith's book "An enquiry into the nature and causes of the wealth of nations". The main points of definition are: a) Economics is the study of wealth only. It deals with the consumption , production , distribution and exchange . b) Only materials that constitute wealth are scarce and useful.Non -material goods like services , air and water (free goods )are not wealth. c) Economics ...

COMPONENTS OF ECONOMICS a) Consumption : The study of consumption and consumer behaviour relates to the study of consumer where he has to allocate his means (income) on the purchase of goods and services so that his satisfaction can be maximised. b) Production : The study of production or producer behaviour relates to the study of producer where he has to choose such combinations of diferent inputs within given price which are least expensive so that he is able to maximise his cost of production . Also , how he choose to produce those goods and services within given prices ,the production of which offers him maximum revenue, so that his profit can be maximised c) Distribution :The study of distribution relates to study of how income is distributed among those who are the agents of production. Here, the agents of production refers to the owners of factors of production. There are 4 factors of production : 1) Land   - The income is distributed to the owners of land(used in product...

ECONOMY Economy refers to a system of a particular area that shows how people of the concerned area earn money. It shows the nature of all the economic activities in that area.  ECONOMICS Economics has been derived from Greek words i.e "Oekos" and "nomos" .The former means a house and the latter means to manage . By combining the both it means managing a houshold. It refers to the study of how society choose to enjoy scarce resources that have alternatives uses. In other words, it is a social science that focuses on management of scarce resources in such a manner that both individual and society can attain maximum benefit. ECONOMIC PROBLEM It is the problem of choice or problem of allocation of scarce resources to their best alternative uses.  It mainly arises out of the given two facts: a) Resources are scarce . b)Resources are unlimited and have alternative uses.  ECONOMIC ACTIVITIES These are those activities which are related to how one can make use of scarce re...