Concept of demand: Before discussing the factors affecting demand, let us discuss the concept of demand.
Demand is the ability and willingness to buy a product at given price and a particular time. The word demand is different from the want and the word desire. Want means that a person has the money but he does not want to spend. Desire is just a wish; it means that a person does not have the money to buy a product.
Demand has following conditions:
1.Time 2. Price that is why Demand is the ability and willingness to buy a product at given price and a particular time. Continue reading “8 factors affecting demand”
Last time I have discussed about the concept and nature of utility. Today I will discuss about the Types OF UTILITY APPROACH.
Utility approach is basically of 2 following types: Continue reading “TYPES OF UTILITY APPROACH”
CONCEPT OF UTILITY
Dear friends let us first discuss the concept or meaning of utility.
Utility may be defined as the want satisfying power of a good. A commodity is demanded because of the want satisfying power of a commodity as long as good satisfy human want they set to possess. Continue reading “Concept and nature of utility”
Today we will discuss the concept of opportunity cost with the help of examples.
The concept of opportunity cost was developed by Austrian school of economics. Later on it was popularized by American economist Devenport. Continue reading “Concept of Opportunity cost”
Last time we have discussed the types of economics. Today we will discuss the difference between positive economics and normative economics. Let us discuss it:
It deals with the economic issues of past, present and future and tells about what was, what is, what would be. Positive economics is basically based on the facts and figures which can be verifiable.
For example India is the second largest populated country; it is a positive statement nobody can deny it as it is based on the facts and figures.
It deals with the opinions of economists related to the economic issues and tells about what ought to be. Normative economics is basically based on the opinions which can’t be verifiable. For example there should be the development industries in underdeveloped countries to make them developing countries. So this statement is just an opinion and it is just a judgment.
I hope you have understood the difference between positive economics and normative economics.
The term economics is very common and Economics can be broadly classified into two parts:
MICRO ECONOMICS: in microeconomics we study “I” which means individual. It means in micro economics we study everything from the point of view of individual. The word micro itself means small. In micro economics we study individual firm, individual producer, individual consumer etc. Continue reading “Types of Economics”
Economics is the study of human activities which they perform with their limited resources to satisfy their unlimited wants. Continue reading “Concept of Economics and Economic Problem”
Today we will discuss the law of diminishing marginal utility commonly known as law of DMU. It is known as Gossen’s first law also. It explains consumer behaviour.
According to it as we go on consuming more and more units of a commodity, the utility obtained from every additional unit goes on decreasing. Law can be explained with the help of following example: Continue reading “Law of diminishing marginal utility”
There are two methods of economics
- Deductive method
- Inductive method
Deductive method- classical economists favour this method. It is also known as hypothetical or abstract or priori or analytical method. Under this method there are following steps: Continue reading “2 Methods of economics”
Economics is considered as science of wealth as it is a study of the factors which are responsible for wealth generation. Thus in Economics we study a body of knowledge which relates to wealth. Economics as a science of wealth Economist Adam Smith, J. B. Say, John Mill, F. A. Walker and Riccardo. Adam Smith is known as a Father of Modern Economics and 1776, he has written a book called “An Enquiry into Nature and causes of wealth of Nation”. Continue reading “Features and Criticism of Economics as a Science of wealth”