SHIVANI SCHOOL OF BUSINESS MANAGEMENT BA9202 Economic Analysis for Business

Unit I 2 marks 1.
ECONOMICS is a social science which deals with human wants and their satisfaction. It is

What is Economics?

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.

2.

What to Produce? capital goods

What are the three fundamental Economic Questions?

consumer goods The choice of product based on scarcity. How to produce? Decision to how to mix technology and scare resources and Partially by man power and machine or fully automated. For whom to produce? The person who actually receives. Who gets maximum satisfaction Who is having the buying power. production.

3.

What is Economic Efficiency? Productive efficiency? Allocative efficiency?

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.

4.

What is Stability?
Stability A condition in which national output is growing steadily with low inflation and full employment of resources.

5.

What is PPF?
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.

6.

What is Micro & Macro Economics?

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 . Brief out externalities.

Factors whose benefits (called external economies) and costs (called external diseconomies) are not reflected in the market price of goods and services. Externalities are a loss or gain in the welfare of one party resulting from an activity of another party, without there being any compensation for the losing party. Externalities are an important consideration in costbenefit analysis. 16 marks 7. Explain the themes of economics.
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 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. production.

8.

Explain the concept of Production Possibility Frontier Unit II 2 marks

1. 2. 3. 4. 5. 6. 7. 8.

What State What What What

is meaning of Demand? the Law of Demand? is Consumer Surplus? is Market Equilibrium? is Elasticity of Demand? 16 marks

Explain the Factors determining demand Explain the types of Elasticity of Demand Explain Law of Returns to Scale: Unit -III 2 marks

1. 2. 3. 4. 5.

What is market? What is Perfect Competition? What are the Factors of Production? What is Oligopoly? What is Monopolistic competition?

6. 7. 8.

16 marks Explain the Features/Characteristics or Conditions of Perfect Competition. Explain the Comparison Between Monopoly and Competitive Equilibrium or Perfect Competition. Explain the three important economic models of Oligopoly. Unit -IV 2 marks

1. 2. 3. 4.

What What What What

is Aggregate Demand? is Macroeconomic equilibrium? are the components of Aggregate Demand? is fiscal policy?

5. 6. 7. 8. 9.

Marginal propensity to save? What is marginal propensity to consume? 16 marks Explain the Methods of Measurement of National Income Explain the important concepts of national income. Explain the Circular Flow of Macroeconomic Activity Unit -V 2 marks

1. 2. 3. 4. 5. 6. 7. 8. 9.

What is Philips Curve? What is money? What is seasonal Unemployment? What are the motives of money? What is monetary policy? 16 marks Explain Explain Explain Explain the the the the types of Inflation. PHILLIPS CURVE in Unemployment. Instruments of Monetary Policy types of Unemployment