Micro Economics Affairs

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MICRO ECONOMICS
ASSIGNMENT

PRESENTED TO:SIR AFTAB AHMED

PREPARED BY:SYED MUDASSIR HUSSAIN
MBA (E), DADABHOY INSTITUTE OF HIGHER EDUCATION

TABLE OF CONTENTS

Page #
1) Definition, Scope & Importance of Micro & Macro Economics……………….…. 3-4 2) Human Want, Need, Utility. Characteristics of Utility, Definition, Explanation, Classification, Kinds of Utility……….………………..…………………….. 5-7 3) Over view of Demand & Supply ………..………………………………………………………7 4) Law of Demand and Law of Supply its conditions……………………………………….8-9 5) Equilibrium of demand and supply and price determination………………………9 6)Effects of changes in demand and supply ……………………………………………….. 10-11 7)Firm’s product, cost and revenue …………………………………………………………….11-16 8)Assignment …………………………………………………………………………………………….. 17

DEFENITION OF ECONOMICS
Economic deals with economic life of human beings.
* In individual or group
* In a country or economy
* In the world
SO
* Study and analysis of the situation is Science
* Application of economics in life or in society is Art
MICRO & MACRO ECONOMICS
Subject matter of economics has been divided into two parts: 1. Micro: Greek work MICROS means small, it is study of small units i.e. (a particular, individual, firm, house hold etc). 2. Macro: Greek work MAKAROS means large. It is study of Economics. As a whole.

DEFINITION
Micro Economics (also called as Price Theory):
It deals with the economic actions and behavior of individual units and small groups.

SCOPE
1. Price theory (micro economics) is based on laws and concepts of demand & supply. 2. How consumer can get maximum satisfaction from limited spending. 3. How various types of firm under different conditions maintain equilibrium of output & price. 4. Theory of production & laws of return.

IMPORTANCE
1. Helps to understand the working of free market (Basic economic problems). 2. Efficient employment of resources.
3. Helps to formulate taxation rules etc.
DEFINITION
Macro Economics (also called as Income Theory):
It deals with the whole system not the individual of small groups. SCOPE
1. National Income
2. Money
3. International Trade
4. Public Finance
IMPORTANCE
1. Helps to understand the international market trend.
2. Policies of the country.
3. Political science, international relations etc.

3 SCHOOLS OF THOUGTH
1. CLASSICAL Study of wealth Adim Smith (1723-1790) In 1776, an enquiry into the nature and causes of the wealth of Nation done which results that Economics is the study of wealth. 2. NEO- CLASSICAL Economic Welfare Alfred Marshal (1842-1924) In 1890, an enquiry into Principles of economics was done which reveals that Economics is the study of man’s action in the ordinary business of life. It enquires how does he get his income and how does he use it. This is on one side, the part of wealth but on the more important side it is the study of man. 3. MODERNWants & Means Lionnel Robbins (1898-1984) In 1932, as essay on the nature of significance of economic science was introduced which defines that economics is the study of human behavior as a relationship between ends and scarce means which have alternate uses.

BASIC TERMINOLOGIES
A word which conveys specific meaning in relation to a body of knowledge or subject is called basic terminologies.

1. HUMAN WANTS & NEEDS
Means ENDS which human beings pursue for their satisfaction. Human wants keep on rising with the passage of time. Classification of wants & needs include:- a. Non-Economic:Money / income is not required to satisfy. E.g. weather, atmosphere etc. b. Economic: Can be satisfied only by use of money.

-- 3 KINDS OF WANTS
1.Necessities (Needs):wants of everyone i.e. food, cloth, shelter. 2.Comforts:Better food, better cloth, better...
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