Skip to main content

Land utilisation

  LAND UTILIZATION  Land is a scarce resource, whose supply is fixed for all practical purposes. At the same time, the demand for land for various competing purposes is continuously increasing with the increase in human population and economic growth.Land use pattern at any given time is determined by several factors including size of human and livestock population, the demand pattern, the technology in use, the cultural traditions, the location and capability of land, institutional factors like ownership pattern and rights scale regulation. Major Types of Land Utilization in India : As in all other countries, land in India is put to various uses. The utilization of land depends upon physical factors like topography, soil and climate as well as upon human factors such as the density of population, duration of occupation of the area,land tenure and technical levels of the people.There are spatial and temporal difference in land utilization due to the continued interplay of phys...
Post a Comment

Law of equimarginal utility

Law of equimarginal utility

Introduction : In cardinal utility analysis, consumer's equilibrium is given by law of equimarginal utility.It was given by H.H Hossen ,an Austrian economist .It came to be known as Gossen's second law. It was great law of substitution also .                                                         

Statement : This principle states that to get maximum utility from expenditure of limited income ,the consumer purchases such amount of each commodity that last unit of money spent on each of them affords him the same level of satisfaction or same marginal utility. 

Meaning : The consumer is faced with a choice among different commodities out of his limited income where he would get maximum satisfaction only if he allocates his income on purchase of combinations of such commodities which will give him equal level of satisfaction.  

Assumptions :

a) The marginal utility of Different  commodities are independent of each other and diminish with more and more purchases.                                                                

b) The consumer has limited amount to spend.  

c)The utility is cardinally measurable .       

d)The MU of money remains constant.       

e)The utility of different goods are independent i.e neither complementary nor substitute of each other.                     

Explanation with the help of table.                     

Units of money       MU (apples)    MU(oranges)             

1.                             20.                    16.                         

2.                             18.                    14.                         

3.                             16.                    12.                         

4.                             14.                    10.                         

5.                             12.                      8.                         

6.                             10.                      6.                         

7.                               8.                      4.                         

8.                               6.                      2.                                                                                                    

Here, suppose consumer has 8 rupees which he wants to spend on apples and oranges so that he obtains maximum utility.He starts consuming rupees 1 on apples because it gives him 20 units of satisfaction which is highest compared to oranges.The 2nd ripped is also spend on apples as next highest satisfaction is given by apples i.e 18.The 3rd ruppe is spent on  Banana like wise 4th on apples again (3rd unit of rupees is spent on Banana because 12 is set as constant marginal utility of money) .The consumer will goes on spending rupee by rupee till he spends his 8 units of rupees with him.                                                                      With the income of eight rupees and given prices of apples and bananas, the consumer is in equilibrium by purchasing combination of 3 bananas and 5 apples ,because he is obtaining total utility thereby.  





























































Comments

Post a Comment

Popular posts from this blog

BASICS OF MACROECONOMICS

Basics of Macroeconomics   a) Capital goods : Capital goods are described as fixed assets of producers which are used in the process of production for several years. Plant, heavy equipment, machinery are examples. b) Investment : Investment is a process of capital formulation also known as the process of increase in stock of capital .             I =∆k Where I is investment and ∆k refere to the change in capital stock during the year. There are two types of investment  Fixed investment refers to increase in stock of fixed assets of producers during the period of an accounting year .Plant ,machinery are some of its examples.It is also called as fixed capital formation. Inventory investment are those stock which keeps varying . At a point of time,producers have stock of finished goods ,semi finished goods or raw material . These are called as inventory investment. Change in the stock of these are called as inventory investment of producers. c) D...
Post a Comment
Read more

Insolvency and bankruptcy code

  Insolvency and bankruptcy code (IBC) 2016 IBC 2016 is a code which is not applicable to financial institutions like banks, pension funds, mutual funds. This means if company has taken loan from a bank and is not making repayment of its debt, bank can then move to National company law tribunal under IBC 2016 to declare the company bankrupt. To deal with the bankruptcy of financial institutions, Government is planning to bring " Financial Resolution and Deposit Insurance " (FRDI) bill. It is a system to deal with financial firms insolvency while at same time providing highest level of safety to the depositors .  This law is in dicussion since last 4 to 5 years, but still not passed by the parliament due to "Bail - in "clause. It states that in case there is bankruptcy or insolvency in bank, then depositors will have to give up some parts of their deposit to protect the bank. There is disagreement on this clause.  To conclude, The FRDI bill, 2017 was mea...
Post a Comment
Read more

SAARC

SOUTH ASIAN ASSOCIATION FOR REGIONAL COOPERATION (SAARC) Introduction    The South Asian association for regional cooperation comprises of Afghanistan, Bangladesh, Bhutan, Indian, Maldives, Nepal, Pakistan and Sri Lanka. The foreign ministers of these countries, at their first meeting in New Delhi in August 1983,adopted the declaration on SAARC and formally launched its Integrated Programme of Action IPA. SAARC has also nine observers - Australia, China, EU , Iran, Japan, Republic of Korea, Mauritius, Myanmar and USA. Meaning  The aim of the organisation is to accelerate the process of economic and social development in Member states joint action in agreed areas of cooperation. Observers are not allowed to be part of deliberations and their participation is limited to the inangural and closing sessions of the summit. Objectives   a)To promote the welfare of the people of South Asia and to improve their quality of life. b)To accelerate economic growth, social progess ...
Post a Comment
Read more