Solutions To Basic Economic Problems

Scenario
Jake used his creativity to make different kinds of cards. He made very little money out of his little business. His friend suggested that he buy an Apple laptop and with its 4/15/12 features create Click to edit Master subtitle style many
Profit and Loss

Sum I - Handmade cards.
Sum II Mac book
Raw material and labor: 5 Selling price/card: 10
Raw material, technology and labour: 7 Selling price/card: 10
Cards made per Cards made per day: 1000 day: 4/15/12 50 Click to edit Master subtitle style
Solutions to Basic Economic Problems
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Definition
Capitalism is an economic system in which the means of production are privately owned and operated for profit, usually in competitive markets. Example: U.S.
4/15/12 Click Is it true today? to edit Master subtitle style
History
First introduced in the mid-19th century by Karl Marx Pure capitalism has long since disappeared, as governments in the United States and many other countries have intervened in their economies to limit concentrations of power and address many of the social problems associated with unchecked private commercial interests U.S. economy is a mixed economy and not capitalist
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Today
Theindividualwhoco mes closest to being the originator of contemporary capitalism is the Scottish philosopher Adam Smith, who sought to show how it was possible to pursue private gain in ways that would further not 4/15/12 Click to edit just the interests of the Master subtitle style

Capitalis m
Consumers freedom of choice
Consumer decides the quantity to be produced
Basic aim is profit maximization Better technology Low cost of production
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Consumers Freedom of Choice

A business man wanted to start a new business in Mumbai, but he doesnt know what it should be.
Can you help him decide? If he is to start a book business, will he only produce one size of books? Why? Suppose you were to go to a shop, will you get to choose the size of books that you require? Whose choice decided the size of books in the first 4/15/12place? Click to edit Master subtitle style In a capitalist economy the consumers decide what

Capitalis m
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Edward has a business of making ceiling fans. He realizes there are more and more consumers asking for A/Cs.
The economically backward people are at a loss in this type of an economy.

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Capitalis m
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Profit Maximisation
What are the things that you might want from your AC? What will Edward do to provide all these demands? What will happen to the cost of production? Better technology How is that covered? + Following Give some other examples parameters set by where the use of technology the consumer = helps? Click to edit Master subtitle style
Profit Maximization
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Capitalis m
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S C R T
Across 1. An economy guided by consumers demand 2. There is an interrelation between the two:____________________ 3. The producer aims at_____________ ______ Down 4. Capitalist says, My aim is to ________ _________ 5. Whose needs give the parameters of production ?
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C A P I T A L I S M A X C I O M N U S M D E M A N D S U P P L Y M R M I N I M I Z E C O S T R F I 4/15/12 T Click to edit Master subtitle style
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www.pptpalooza.net/PPTs/GlobalStudies/IndiaSinceIndepen
Jawarlal Nehru

Ally of Gandhi. 1st Prime Minister of India, 1947-1964. Advocated Industrialization. Promoted Green Revolution. Mixed Economy. Nonaligned Movement.
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Nonaligned Movement.
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Indias mixed economy The mix refers to private and

public ownership. Foreign aid and foreign investment are crucial. Urban areas have high-tech companies. Three quarters of the population are farmers living in small villages.
India's "Green Revolution" allowed 4/15/12 farmers Click to their crop by using Read more: to triple edit Master subtitle style
Importance to public sector post independence To establish socialistic pattern of society

To lay importance on heavy and basic industries like iron and steel To get rid of monopolies and restrictive trade practices
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industrial policy resolution 1948

State Monopoly Mixed Sector Government controlled Private Sector
Arms and Coal ammunition Atomic Energy Iron and Steel
Automobiles Heavy Machinery Heavy Chemicals Fertilizers
All others
Rail Transport
Aircraft Manufacturing Ship Building
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Telephone, Sugar Click to edit Master subtitle style telegraph and
Industrial Policy Focus Resolution 1948 Increase Industrialization 1956 State given direct responsibility as capital was less and entrepreneurship was not strong enough 1973 Identified high priority and foreign companies 1977 Decentralization and cottage industries 1980 Technological upgradation 4/15/12 Click to edit Master subtitle style 1985 - 86 Increase in productivity and quality and
Industrial Policy Resolutions through the years
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N I
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U P
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W R B I N D I A P O S T
H U L L
L I C
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Scenario

Profit and Loss

Sum II Mac book

Raw material and labor: 5 Selling price/card: 10

Raw material, technology and labour: 7 Selling price/card: 10

Click to edit Master subtitle style

Click to edit Master subtitle style