Dejiraton o fconomles

Eonoms tes come rom too Gqek wots

Oiko- norria

House Manage
How we Cen manage we oukseles in a lkest

J4. o was fiat ginen and to by Adam Smeth

l96 wealth

fotthur o1 Economcs

os known Cus the fathir a Eeonomig

Adam Snt
Sn his lanous Book"An Enqiny ito the'Natue
and ses o weatho1 Natfons Pubw's hed en
196,. Adam Sorith as put gorad is de7in
ati onn Adam sSmith
Ecornoms
Eoono m'cs so the
Accprdemg
study o wealth Econorrics
in ohch wealth con be
stvi e
nd wd wealth h Ad cun smu th's
 wiew oyers to And , builo'mg
nd the entie coleetiom ot qooos wfc
wshich
be
. He says wet is the annUu
prouce oq th and and labouY o the
Socichy

me Econorist Crritiised/Linitation i

Delj matiom
Ald Marshale 1990 wlae
1890 A]|ed Marshall pub's hed a book entite
loincples ol Economics - AcCogde'ng to hin
not economie
wth
weat, rather it is
ComceHned .itth whe q weath by m
man o
saci sBocionn ol his
wts: Aciogd'mg to Poojeosor

Bl}udMashall econones is the study man kin

Am the ordeinay i busimes o jeiJ++
that
exan'mes
Cioseuy tomneted buith the atounmee
nd he the natia teea site
Jhe economecs es Oe side is
 weolth and 6m the other and motee
faponta
mte jde a part ob the stocy man-Auordig
to A1}Hed Mahshall wealth is not at end im
itsely as was thought by elasical authors, it is
to a end- the end ol hwnan wella
Me

Goocs ae too types

Mateicl goods : isi ble, touchable 3 toasparant
Non - Materia goods. Nonvisible, non- tovchable,
non- trnspaent
able.

onel Robbi rs:

Loseaeity
y Human wants are Unlenit ed

) ResoUHces
in) 44enatte
 utity Natorad y
pleasute and uiloy 1"y
igaate) (ane, Useyunes and
satis}actionluothy) aohaty
nd ý
comrodihy satislying
the wanto
JS
Jhe
Analys -utiuty and Behanout Consumey *)
Explain. conemies: e
econores dyinitibn
oy Scateity *)
best the jS
Jime uuty:
Jore
Jime tiity inpues those ctiiay goods wtáh
ae de to changimg o) time So
Gimple anguage dillehert time's brumg djhent

dione tut As per txa mple : Duu'mg

sA0SOm tiu ty o co ld dimks, eluatic

o , ai Comditioneo,etctire emerged: L'keuse

dwtemg wnte seson there es a
(woollepL clothes, jacket heater ,ete

Poce uti'ty:
Plaee wtiuty impd es ttose util
whech ate CHeated by place because

im thib patticlar place

mentioned place uty is
thot

though the 4rnster ok o iommodey

CHeottd
me plaei to anothe A o e xarnple
a books school items, UniB) ete ao
utiuty
can be theat edby tase teing om manactu
pline oA school and
i mg. place cto he ieHest
coleqe Likeuise coal that enans umder
gheounod hane mo wity , but wter it is mene
cnd bitought DVer qCUnd t be loes wseatle. and

utility

Jhe mame jmpl'es that.natral otiley

itsey
wtiity wohects doteeue 4hhe
Gueh
elements ds
ete, ohich ae
ate matute

Serie utility;
^eoice utiity implies those tiljes oheth ate
etied doom vareov) sehu'es
actiities
Hende ted hyte achatg, doctots, engineets , etc

foan otilty:
Forer otiity implies those vtilities ohieh ae
Cheattd by transyonemg om O one fon
shape o goods to onoothet 0tur . As tot eg:

tOrem the Bunitute Likewise

ky toanstokmimg to he sweatt
Jackt etc
) Law Diminishing Maoginal uity
Jhe laws q diminshimg marginal utity , one o%
the pot art laus on eco nomies ie gerealgd
vey
LHOm the peculeEtes O% hman wart6 . OUr wct
hor c' particular cormmo díty dininishes with
inctease im itz stock Accoring to thes
0the themgs 'emiaem same the ma7ginal
uti ity de hi ed 4kom the Comsumption ol pao tilar
comnodity dinnishis moe 'ond motte unlts
COnsumld:
the sae cornnodity ate

Allred Marshal was the exponert o thís

daw . dhe addiional burits tch
his
derines Hom a qiuenn inceasd o, stoek ot
a theng iminishes with euwy ineriease tm
stock that he has ghe statenent o
A Mashal muas that s COmsmes mote

and moe .umets, Commo dety the utiuty he

dei wes om the kuccesine units wll go on
diminishing . t shoutd be moted hat it is alwys
he anangimal wtili'y that de'minis hes anol not the
Due to the jalim miginal iuty
the total utity incruses at a denersh ng ate a
and becomes maximwm at tthe point o co rsump
tion o the co mmodiy wtee ito ginal
 dhe law o dimimishim marginal wtiy
eth the help o
Ccn ke made. cle a example
Lt us suppos that man im otd t0 t i )
therst tm hot 30mmer day in bugt begig col

store Due to es thitst the.

6inst umits o cold d rimka would daginitely gi

hem, highek leuel, o sis}actior - But the seoond
onits 1 cold d u'nk ill g'ue him dess sathi's7adia
oti ) Umetl he
Umitil he woub
Hhe t i d k less nd 80 om
Heach a stage wthen dunking ome myHe b0tle
coiddtu'nks mo lomgtt qiues him ary
he woD la eue

the poimtg o saticty " ghus we nd that a

Cosmes rote ena mote Unts

the same commodety hes oHlity ktn 1ts adti

PoAsesion
uithh the
Consnt
uimg tatble
 Uhts To+ l
Matginal
colddrks
wtiy
lo uns

24

5 2, 30

30

d e cbo ve table jmdcates that

motte Cnd mote Umits cold du'nks.
dhnks

Makgiml tiuty , it to him halls when eR he

Comses he 6 mits the mar ginal tiuty beco
mes 44 jmdiCates his point ß atiety and
as ational Cosume t e w0ld deide not

CGnsume anad detiona b0t0s co

becausehe table 1mdecades tht i he Conbmes

the y Unet , tha he wold be

2 Umets
 Jhe auw can also be explumed wwth the
hap kotlowi ng d'agromi M

A
Marqinal

M Mz M, My M

ig: Marginal utiity coke!

Snhe deagram ox aes Hepresents the quatiy
of the tommodhy comsued, cny Y- an's tepet
the cotOs prnding mahgimal iiy
js the margimal uiuy cutne cuith slope?s

downwad oom deyt to ight whe we Conse

oM, bnits the margiml otityis AM, and when

matyinal
tti lity decteasls to BM, . dhis the marelnal
wti'ies derded }orm duceesje
sueeesje units
units consnp
gronduay deeneases to cMa , D and Ps
decreases to
Bt hen sume o M, vmits magiral util'ty
lonsunme

beo mmes as the marjma tity cutve touches

the ais at this pof t A}te that ib w
.

(8msume om, umts then marglno utity win beerre

at thes Poînt consumer w°l

syjet pau n Jhs the marqina tity tute

Comey btlow the 0x -acis 6hoing hegatiue utiy.
de'mineshe'ng arginal
-9he's ís the law s

Comsone os' Surplus;

Monginal tily| Total uti lty Cosunmes

cold dinks (in upees) Cin upes) SUpl

0
1 100

0 50

56 20 30
3

35 15

25

Total ity: 300 To+o

Pice
 Consumea?s
suoplus

Prce

umits o comodaty

0 BA -0BP

PBA

DEM AND
Law o Dermad
ti/ Types q Denand
ny Gxceptin to the law
Dercnd Des:

cornmodity
iy capaeity to pey or it
t

Law OB
Demndi Jhe law o) demnd totes that
othet
Hhimgs bei'ng acoited as he pru'e q the
(ommodity tises the demend ovet the Cornmoaty
nd the pHu e ol the Cormmoity Jels
the dernnd oH the
oM thu commo dity is eses
dety tis J he demand
con modty and
Hulated Sm this teg ards
its pe ce ate
inwrsely
4 is to be
mentional
that Umdet dow deand tee is
ocal Hulaiomship betwee pti e and demand
But io this case
ptice always mubt be indepen -
e r t vaviabje nd . denand mudt be dpendant
Vau oble On the othe hcund othet than law
o denand deman is indepndert ivarioble and
pru ce is' dependent ya abl e gthen both phca.
Cnd demand wll hang e diection
 Jhe law ol dencn d btates thot ghek priu
eads to a Jouer awanty deman
dean ded
ded and ha

dhs He denund yumction s

D- (Pa ,?y,Y, T)
uhee

Dy Demand yo Comodity
=Piee

Iy= Price oy commodty

Y= Jncoe o he indiidal
T= dhe test, and phyerenees q the indiidual
ot howsehol.

Now, ec0rding to the daw o demnd dhe denund

Jo commodity x wii| Hse when its plce
hals and ts demnd wl o when the priL
ises PHO eded othe things ema'n qoul o
donot ehange: d-e
comstat
 Jhe daw o) demnd cunbe pxpland wth the
ollowwng tble and whuch is adso calssl
help o
demcd scheule

Prie Qutity
demendkd
40 unts

4 )

Jhe abowe tble shows that enara

(orm modity jals when ito prua nisus
iss Jhe denand
Dm he
basis thhe boe
+able

4
3n the dagrm dX anis shous the qentity
denund and oy nis shous the ptuL ot
the commoi ty. At the poimt By phu'te o Ra in
pet Umt nd to+al unit dend us 2 4 +
poimt B, pHie 's Rs 8 bee ymit and tota
vit deand es 4 and boit Cc ond So on
9| we joim althese poi nt, je ABLD andE
then we cOH Ve DD' and these CuHves
calld derand Cut e the derand cuHe slopes

dowrwand m det to eight ghe's cute

tuy leet the w o demand

Exceptior to the daw o demand

OR

when low o demand s not appleable

y Emengeney situetiom .
R Depess io
Trade cyele
SBoom

Rucession

Deprosion

/ Giuhim Poede ( rie 'ioneases ademant Henein

costant)
 KSB between TP nd MP
Wnte a Helationshlp

i'st agu'sh Low , vamable po PUMm:'

) and
Wnte te dil kernee bewe
Hetun

nd

Cost Jumctiom

whne,

6 Jumcienal Rlationship
utput

Kinds o cost

Y Mory cost
/ Snpicit and cpi'it cost
3/ RLa cost

4/ptivate ana Sodal cobt s

/ oppoeturity coat
 hup
) Cost umton eyets to the lumctimal tlatins
(0st antt outp ut ohen 0utput jncheaes then
outpu deereses then cust
deceases

T-> Ttel ined cost

50kq s Rs 2000
Total cost Aerage = R000
50

= Rs 4o7.

TC= 50t 150

 Aysignmant :
Explain the Vaos desinatton o econom's
sthih deintt om
anhy
2/ stte and expleir the concept % Consumh
what
" Discs the sgneae 4
(onumt surplw bemy as engineke
3/ what is demand . when demand cutve slope

POaiHely Eplain.

Exblcun the co eept o E-omLhee. Point

out the ehanges £-cornme tee i'n the contet
 Jypes o Demand
Jojmt demand

2/21 deeued demand

b/ Composite demand

Suprly Part o< tte toted produetin

Lau qsupp the muket

he laww supply States tht sther

things bing eowad as the prie o
the commo dltydses te sUpply 80- uppy
the Commo do ty tises and lo -Stock

the sup ply o the commd ty baws

Dh a supy stotes that the bupply oa cammd

dy and its fe ae midirectimal dhe la
sppy states that a ughert phe leas to
higleh ayantity supPly and' a doer priu Jead to
 Jhe o o} bupply cen be expl aned ih dhe haip
o the supply shedue an d the sUppy ut
Jhe supply 8chedle shous the disetent qantitu
Commo ty su pplè ed at vQtúous pru'es the
kolloeing table ind'cctes that 0ttey dhirgs bein
eowal óupplg ol the commo dity Nises as ts
PHCe sses

Pn'ee
Quantiy
Soppied.
lo o ynets

200 Uts

30
300.uits

400 units
500.uits

Om the basis o the supply she dule w car d

the fot ouing diagzam

 Price
20

200 300 400

S00 X

Ayantiy
3n the abone déagoan avantiy svpPy ís measUHed
log the OX aisanis an
and the
the pe ol
im the oy aass Jnm commodity is
the dloqgern Joo yuts
O co mmodity are
suppleed at Rs 10 R23 ný4 . As the
pse HiSUs to Rs 20 po urút
the quaty suppl
}ncHLass to e200 ymits ) as the pica ises
do As 30 P ont , He au feothe
360 units:
antity spply incteasss
Fnally when
Ut the to tal Bupplu inceases to 500
urits
Jhe

Hi6B ing because ibath the poe, and peice a

 He commodity

E-commetee
Appicatlen ol ingotunaton ih
in technoloqy is ecom mehu
) Applicable aea o! E-ornmerce in Jndiat
Online DHder
phocwsing
DSectore

v) financial' senices
y Éntrtainment
v) Customen elationshep management system

NÝ Jele cornmunicatiom system

Advantayes o, e-(omnehe 4

y Loue co&t

liiy Remaon Ope al the tf me

No geogaphical limitatiom:
 chaleng es oh e tommehce

blems

iy Digtad fuiteacy
and securty Corceth

ly Absenc a proper cybett de ws

Engish specife
i / i s Problen

A what is Demandl
An Demand eylets to the auari ty a good thet
(onsumUs ae uillimey andan atble to Rutehase
at variows
vaçws prius dwneng a aiwn tt me
Jllwe Se neral actoty

1/ Cost q otue (ormunodrti es

in(7 (onsuret income
Jheir tste and
prekerenees