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Economics is a vast subject in itself. Assignment Achievers are here providing you with a brief of Fundamentals of Economics.
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Contents: DEFINITIONOFECONOMICS BASICECONOMICCONCEPTS COMPONENTSOFECONOMICS BASICECONOMICPROBLEMS BRANCHESOFECONOMICS
DefinitionofEconomics: ALFREDMARSHALL ''Economicsisthestudyofmankindintheordinarybusiness of life". LIONELROBBINS ''Economicsisthesciencewhichstudieshuman behaviour as a relationship between ends and scarcemeanswhichhavealternative uses".
FRITZMACHLUP ''Economicscomeinwhenevermoreofonethingmeanslessof another". RICHARDLIPSEY ''Economicsisthestudyoftheuseofscarceresourcestosatisfy unlimitedhumanwants". JOHNMAYNARDKEYNES ''Thetheoryofeconomicsisamethodratherthana doctrine, an apparatus of mind, a technique of thinking, which helps its possessor to draw correct conclusions".
BasicEconomic Concept SupplyandDemand Scarcity OpportunityCost TimeValueofMoney SupplyandDemand
SupplyandDemand Supply and Demands affects every aspect of day to day lives. The fundamental concept behind supply and demandstatesthatproducerandconsumeralwaysmeet atonepoint. Scarcity Scarcity arrives when the needs of human is more as compared to the resources to fulfil them.Theneedsareunlimitedbuttheresources arelimitedandhencescarcity arises.
OpportunityCost Opportunity Cost can simply be defined as the benefit thatcouldhaveacquiredfromtheoptionthathasbeen missedornotchosen. TimeValueofMoney The concept of Time Value of Money is that the money today will be worth the money tomorrow.Thatmeans,futuremoneyisequalto thepresentmoneyandtime.
PurchasingPower As the name suggests, Purchasing Power is thequantityofservicesofgoodsthatcanbe purchased with the particular unit of currency.
ComponentsofEconomics Consumption:whengoodareusedtosatisfyhuman needs,itiscalledconsumption. Production: When we add or increase the effectivenessofacommodity,itiscalledProduction. Distribution:Distributionisdefinedasdistributing the income that has been received from the production.
BasicEconomic Problems WhattoProduce? HowtoProduce? ForWhomtoProduce? WhatProvisionshould bemadeforeconomic growth?
WHATTOPRODUCE? Whentheresourcesarelimited, societyneeds to decide what goods or services needs to be producedandatwhatquantity. HOWTOPRODUCE? Once it is decided what needs to be produced, the next issue is how it can be produces, what techniquescanbeusedso lesstimeandmoney isconsumed.
FORWHOMTOPRODUCE? The society cannot fulfil the needs of every individualsoitneedstobedecidedforwhom thegoodsorserviceswillbeproduced. WHATPROVISIONSHOULDBEMADE FOR ECONOMIC GROWTH? Whateverdecisionistakenbythesociety,one thing that is important is economic growth. A part of resources should be kept for future as wecannotusealltheresourcestofufilpresent needs.
MICROECONOMICS The branch of economics that focus on the decisions individual firmsandconsumers.Itanalyses the decisions, techniques of individualfortheproduction. MICROECONOMICS This branchofeconomicsfocuson overall economy on both national and international level using economicdata. BranchesofEconomics
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