Economics Notes B-Com
INDEX
Chapter No. NAMES Page No.
Microeconomics 1 2 3 4 Basic concepts Demand and supply Consumer’s Behaviour Analysis Perfect and Imperfect Competition Macroeconomics 5 6 7 8 National income analysis Consumption, Saving and Investment Determination of National Income Monetary and Fiscal Policies Economic Systems 9 10 Capitalism, Socialism and Mixed Economic System Islamic Economic System
74 81 33 39 62 69 2 7 15 21
1
ECONOMICS: It is a social science (social science is a science, which studies any aspect of human life) which studies as to how the scarce resources, which have alternative uses should be allocated/utilized so that maximum goods are produced i.e., maximum wants are satisfied. Basic concept Goods/resources: Anything that provides satisfaction or utility is called goods/resources. Characteristics of resources: • They are scarce • They have alternative uses. Scarcity of resources When demand for a resource exceeds its existing supply that resource is said to be scarce. Note: scarcity and shortage are the two different things. Shortage is a temporary phenomenon i.e., when supply falls short of the demand temporarily. The problem of scarcity leads to 3 issues (I) What (II) How (III) for whom to produce. Alternative uses When a man can satisfy more that one want with the same resource or can produce more than one product from one resource then the resource is said to have alternative uses. Equilibrium: It is a state when the economy is making full use of resources or when maximum goods are produced. Opportunity cost: The cost of an item measured in term of the alternative forgone is called its opportunity cost. For instance, if government decides to produce more hospitals and fewer schools, the increase in the number of hospitals has an opportunity cost in terms of the number of school forgone. BRANCHES OF ECONOMICS: MICROECONOMICS AND MACROECONOMICS Micro and Macro are the two major subdivisions in the field of economics. Micro examines the economy in
Chapter No. NAMES Page No.
Microeconomics 1 2 3 4 Basic concepts Demand and supply Consumer’s Behaviour Analysis Perfect and Imperfect Competition Macroeconomics 5 6 7 8 National income analysis Consumption, Saving and Investment Determination of National Income Monetary and Fiscal Policies Economic Systems 9 10 Capitalism, Socialism and Mixed Economic System Islamic Economic System
74 81 33 39 62 69 2 7 15 21
1
ECONOMICS: It is a social science (social science is a science, which studies any aspect of human life) which studies as to how the scarce resources, which have alternative uses should be allocated/utilized so that maximum goods are produced i.e., maximum wants are satisfied. Basic concept Goods/resources: Anything that provides satisfaction or utility is called goods/resources. Characteristics of resources: • They are scarce • They have alternative uses. Scarcity of resources When demand for a resource exceeds its existing supply that resource is said to be scarce. Note: scarcity and shortage are the two different things. Shortage is a temporary phenomenon i.e., when supply falls short of the demand temporarily. The problem of scarcity leads to 3 issues (I) What (II) How (III) for whom to produce. Alternative uses When a man can satisfy more that one want with the same resource or can produce more than one product from one resource then the resource is said to have alternative uses. Equilibrium: It is a state when the economy is making full use of resources or when maximum goods are produced. Opportunity cost: The cost of an item measured in term of the alternative forgone is called its opportunity cost. For instance, if government decides to produce more hospitals and fewer schools, the increase in the number of hospitals has an opportunity cost in terms of the number of school forgone. BRANCHES OF ECONOMICS: MICROECONOMICS AND MACROECONOMICS Micro and Macro are the two major subdivisions in the field of economics. Micro examines the economy in