MICROECONOMICS ASSIGNMENT

1) OPPORTUNITY COST

Opportunity Cost of a commodity is the benefit, profit, or
value of some other commodity that must be given up to
acquire that particular commodity.
The concept of opportunity cost arises because every
resource can be put to alternative uses.
These cost are not recorded in the books of accounts but are
used by managers in computing cost benefit analysis of a
project


2) Potential Demand

The word potential means capable of being or becoming but
not in existence yet.
Thus, Potential Demand means desire or preference which a
consumer is unable to satisfy at current point of time due to
lack of information about products availability or lack of
money or likewise.


3) POSITVE STATEMENTS

Positive Statements means those statements that are objective
and fact based. Positive statements in economics deals with
the things as they are. They are descriptive statements.
Positive statements do not have to be correct or desired, but
they must be able to be tested and approved or disproved.





4) NORMATIVE STATEMENTS

Normative Statements in economics means study of
economics that attempts to determine desirability or
undesirability of different economic conditions, programs or
situations by focusing on WHAT SHOLUD OR OUGHT
TO BE.
So, it deals with things as they should be and not as they
actually are.
They are also called prescriptive statements.


5) MIXED ECONOMY


Mixed Economy is an economic system in which both the
private enterprise and a degree of state monopoly (usually in
public services, defense, infrastructure and basic industries)
coexist.
The means of production are shared between public and
private sectors.
They are also known as Dual Economies.
India is one of the most prominent example of mixed
economy.

6) FREE ECONOMY

Free Economy also known as Market Economy is an
economic system in which decision regarding resource
allocation, production, and consumption, and price levels and
competition, are made by the collective actions of individuals
or organizations seeking their own advantage.
However, governments may intervene occasionally to
encourage or dampen demand or to promote competition to
keep a check on monopolies. Example of free economy is
United States.


7) Micro Economics

Micro economics is that branch of economics which deals
with the study of individual units of an economy such as a
person, household, firm, or industry and not of the whole
economy.
It deals with factors affecting individual economic choices,
the effect of change in these factors on individual decision
makers, how there choices are coordinated by markets, and
how prices and demand are determined in individual markets.


8) MACRO ECONOMICS


Macro economics is that branch of economics which deals
with the study of the whole economy or economic system
instead of behavior of individuals, or individual firms.
It majorly deals with estimation of NATIONAL INCOME
considering factors such as employment/unemployment,
Gross national product, balance of payments, and
prices(inflation or deflation).
It also deals with fiscal and monetary policies, economic
growth and determination of consumption and investment
levels.

9) INVISIBLE HANDS

The theory of Invisible Hands was propounded by Scottish
economist Adam Smith.
The theory explains that an individual(household, firm etc.)
though very small part of the economy has an impact on the
whole economy. If anyone in the society seeks economic self
interest than, he or she will also be serving the larger interest
of the economy as a whole. Thus, actions of an individual
acts as in invisible hand for the whole economy.