 Alfred Marshal described economics as the “study of material welfare”

 Production plant, financial resources, market situation are responsible for scale of production
 During the inflation the value of money diminishes.
 Money acts as a medium of exchange
 All free gifts of nature are called land
 Adam’s Economics is a study of Wealth
 Adam Smith wrote his book in 1776 Wealth of Nation
 According of Alfred Marshal Economics is science of Material Welfare
 Alfred Marshal belongs to Neo Classical school of thought
 Factor of Production are Land Labour, Capital and organization
 Normative Economics involves Problem and solution
 Scarcity definition of economics is presented by Robbins
 Willingness, ability and price are Condition of Demand
 Price decreased demand increases is called law of demand.
 Price decrease supply decreases is called law of supply
 Demand Equation is equal to Qd = a – bp
 Human wants and scarcity of means are the main causes of economics problems
 The first book on economics was written by Adam Smith
 According to Adam Smith Economics consists of production, consumptions, exchange
distribution of wealth
 The ability of a good to satisfy wants is called utility.
 During inflation the value of money decreases.
 The law of increasing return is also called law of decreasing cost.
 Human wants are unlimited
 The goods which are used for the direct satisfaction of wants are called commodities (consu
goods).
 The law of Consumer Satisfaction is also called Law of equi-marginal utility.
 Value of money decreases during inflation.
 GNP includes Domestic Products and Foreign Remittance
 Balance of Payment includes Visible & Invisible Goods
 In inflation means rise in Price
 Supply is a part of stock
 Demand curve has Negative Slope
 At equilibrium demand is equal to supply
 When at same price demand or supply increases and decreases is called change in demand
 A proportional change in demand due to price is called Elasticity of Demand
 The study of human behaviour as a relationship between ends and scare means which h
alternative uses is called economics.
 If the changes in demand and price are in same ratio, the elasticity of demand will be equal to
 When marginal utility of commodity becomes 0 the total utility will be maximum. .
 Macro economics is also called theory of income and employment.
 The fluctuations in economy are caused due to scarcity.
 Macro economics is also known as theory of employment and income.
 Land, labour, capital and organization are the factors of production.
 The marginal cost curve always intersects average cost curve at its minimum points.
 The elasticity of demand for luxuries is less then unity.
 A firm is in equilibrium when Both MC = MR and MC cuts MR from below