Professional Documents
Culture Documents
h3: Land
•It refers not only to area, but also to natural resouces
•Materials and forces which nature provides
•Is scarce (has alternate uses)
h3: Labor
•Any work undertaken for monetary considerations.
•Human time consumed in doing
•physical and
•mental work
h3: Capital
•Part of wealth that can be made to produce further wealth or yeilds income
Like plant, macinery, tools, raw materials, fuel
h3: Enterprise
•It coordinates and corelates other factors of production.
•Orginization, Supervision
•Taking risks and earning profits as a result
Micro-Economics
h1: Demand and Supply
h2: Demand
•Demand is an effective desire, a desire which is backed by willingnewss
and abality to pay a commodity in order to pay for it.
•Demand means various quantities of goods that would be purchased per
time period at different prices in a given market.
h2: Supply
•It is the amount of a commodity that seller are willing to sell at a certain
price over the time.
•Stock on the other hand is something that can be sold but waiting for right
time/price.
h3 Introspection
•Behavior of a person can be taken as an inference of general public,
meaning that one person's behavior predicts similar behavior of other
people
•the marginal utilities will get lower and lower untill they get negative.
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h3: MRS
MRS of X for Y = Price(X)/Price(Y)
h3: Budget Line
•A Budget constraint represents the combinations of goods and services that
a consumer can purchase given current prices and his income.
•an income limitation on a person’s expenditure on goods and services
•It convey consumer's potential to consume, which is limited by market
price and limited income
h4: PriceEffect
•If price of a good falls and income remains same, consumer will be able to
consume more amount of aggregate goods.
•Following a price fall, there are two effects on the consumer, the
Substitution Effect and the Income effect. Together they are referred
to as the price effect
•It compromises of two parts, first called Income effect and second
Subsitute effect
•According to income effect, if price of a good lowers or income increases,
consumer will be able to consume more amount of all goods
•Subsitute effect says when
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