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ECONOMICS is a social science which deals with human wants and their satisfaction.

It is mainly concerned with the way


in which a society chooses to employ its scarce resources which have alternative uses, for the production of goods for
present and future consumption.
Economics is the study of how economic agents or societies choose to use scarce productive resources that have
alternative uses to satisfy wants which are unlimited and of varying degrees of importance.
THEMES OF ECONOMICS
Concepts & Economics Systems
Scarcity and Choices,& Decision Making
Work, Earnings, and Finance Management
Business and Entrepreneurship
Economic Interdependence
Market and the Functions of Governments
THREE FUNDAMENTAL ECONOMIC QUESTIONS:
1. What To Produce?
capital goods
consumer goods
The choice of product based on scarcity.
2. How to produce?
Decision to how to mix technology and scare resources and production.
Partially by man power and machine or fully automated.
3. For whom to produce?
The person who actually receives.
Who gets maximum satisfaction
Who is having the buying power.
Efficiency in general describes the extent to which time or effort is well used for the intended task or purpose. It is often
used with the specific purpose of relaying the capability of a specific application of effort to produce a specific outcome
effectively with a minimum amount or quantity of waste, expense, or unnecessary effort. "Efficiency" has widely varying
meanings in different disciplines
ECONOMIC EFFICIENCY refers to the use of resources so as to maximize the production of goods and services
PRODUCTIVE EFFICIENCY (also known as technical efficiency) occurs when the economy is utilizing all of its resources
efficiently, producing most output from least input
ALLOCATIVE EFFICIENCY is a theoretical measure of the benefit or utility derived from a proposed or actual selection in
the allocation or allotment of resources.


PRODUCTION POSSIBILITY FRONTIER (PPF) is a graph that shows all of the combinations of goods and services that can
be produced if all of societys resources are used efficiently.

MICRO ECONOMICS :
Meaning :
Micro has been derived from GREEK word MIKROSwhich mean small.
It is a study of the individual units of economic system.
In other words a small part of economy & not the whole economy.
DEFINITION:
Prof. Mac cannel, micro economics is a study of the specific economic units and a detailed consideration of the
behavior of these individual units.
Prof.Boulding, micro economics seeks to explain the working of individuals, firms, households, individual prices, wages,
particular industries.

MACRO ECONOMICS :
MEANING :
Macro is been derived from the Greek word MAKROSwhich means LARGE.
Macroeconomic is the study of large part of the economy i.E.,The whole economy.
The study of economic behaviour of the economy as a whole & not the individual economic units of the economy.
DEFINITION :
Prof. Boulding, Marco economics deals not only with individual quantities but with the aggregates of these quantities ,
not with the individual incomes , but with national income , not with individual prices , but with prices level , not with
individual outputs but with the national output .

Economic growth is an increase in the total output of the economy. It occurs when a society acquires new resources, or
when it learns to produce more using existing resources
Stability A condition in which national output is growing steadily with low inflation and full employment of resources.
Scarcity: The shortage that exists when less of something is available than is wanted at a zero price
Economic good:
Any item that is scarce
Free good:
A good for which there is no scarcity
Economic bad:
Any item for which we would pay to have less Resources, factors of production, or inputs:Goods used to
produce other goods, i.e. land ,labor and capital