Opportunity cost is cost of foregone opportunity.
A rupee tomorrow is worthless than a rupee today relates to discounting principle.
Equal consideration to both short and long term goals or analysis of long run and short run
affects of decisions on revenue as well as costs is based on principle of time perspective.
Incremental principle is closely related to the marginal cost and marginal revenue of
economic theory
An input should be so allocated that the value added by the last unit is the same in all cases
which is equal marginal principle.
Price theory is related to microeconomics.
Business economics is micro in nature
Normative signs deals with what out to be
Microeconomics is concerned with the overall performance of the economy
Cause and effect relationship is the future of economics explains that it can be treated as a
science
Welfare definition of economics is given by Alfred Marshall
Adam Smith is known as father of economics
In economics we use the term scarcity to mean relay to scarcity that is scarcity in relation to
wants of this society.
Economics uses money as a measuring rod for quantifying variables
Business economics is involves practical application of economic theory in business decision-
making an incorporates tool from multiple discipline’s
Additional utility the right from the consumption of an additional unit of a commodity is
called marginal utility
Marshall gave the cardinal concept of utility
Love diminishing marginal utility is the first law gossen
The ability of satisfying human want in a goods is called utility
Law of equal marginal utility is called law of substitution
Necessities goods, price fall does not make any increasing in demand
law of diminishing marginal utility, the more consumption of a product, the smaller is the
marginal utility from the consumption
Diminishing marginal utility is the basis of law of demand
Indifference curve convex to origin, due to continuous decline of marginal rate of
substitution
Hicks and Allen believed that utility can be measured in ordinal numbers
Business economics is economics applied to decision making
The subject business economics is concerned with decision making of business economic
activities
Incremental cost means the change in the total cost and incremental revenue means the
change in the total revenue
Opportunity cost are the cost of sacrificed alternatives
Economics as a positive science is neutral between ends
Micro economics is concerned with the behaviour of individual entities
Lionel Robbins expressed the view that economics is neutral between ends
Macroeconomics is also called as income and employment theory
When there are no alternatives, opportunity cost for that decision is zero or nill
Wealth definition is stated by Adam Smith
Paul Samuelson gave the growth definition in economics
Micro economics is the study of individual economic unit
Full employment is the important assumption of micro economics
The credit of development of macro economic approach must go to Lord Keynes
Micro and macro approaches are complementary
Ceteris paribus means some things change
Growth theory is the subject matter of macroeconomics
Total utility is an aggregate measure of satisfaction gained from consumption
Marginal utility is a measure of the change in satisfaction gained from consumption as a
result of a change in consumption
Business economics is also known as managerial economics
Total revenue is price quantity
Father of business economics Adam Smith
Economics is derived from greek word eco means home nomos means accounts
Economics is about the study of scarcity and choice
In economics demand refers to quantity demanded it is specific price during a particular
period of time
The law of demand assuming other things to remain constant establishes the relationship
between price of a good and the quantity demanded
Market demand is derived from individual demand curve by horizontal summation
Contraction of demand is result of increasing the price of good concerned
Increase and decrease in demand refers to right ward or leftward shift of a demand curve
In the case of a given good, the demand curve will be upward sloping to right
The price elasticity of demand is defined as responsiveness of quantity demanded to a
change in price
Tea and coffee have positive cross elasticity of demand with, respect to each other
When demand is elastic than percentage change in demand to a change in price is greater
If a good is luxury it's income elasticity of demand is positive and greater than 1
In case of an inferior good, the income elasticity of demand is negative
If the demand for a good is in elastic, and increase in its price will cause the total
expenditure of the consumers of the goods to increase
Is right line downward sloping demand curves implies that, as price falls the elasticity of
demand decreases
The law of demand implies that as price falls quantity demanded expands
Demand curves are derived while holding income, taste, and the price of other goods
A decrease in the quantity supplied is represented by a moment down the supply curve
When demand equals supply it is referred to as market equilibrium
A price below the equilibrium price results in a short age
Law of demand is a quantitative statement
For normal goods law of demand States the relationship between price and quantity of
goods indirect
Fallen income fallen number of buyers falling taste of consumer at the following for a reason
of fall in demand
Contraction in demand appears when price rises and demand falls
Demand of a commodity has inverse relationship with the price of the commodity
Demand of a commodity which is dependent on the demand of another commodity is said
to have derived demand
Increase and decrease of demand takes place due to change in factors other than price of
the
The curve of unitary elastic demand is called rectangular hyperbola
Labour supply curve is an exception to the supply curve
Income effect results in the change in the purchasing power
Multiple uses of a commodity makes the elasticity of demand highly elastic
Market supply schedule is a horizontal or lateral summation of individual supply schedule
Demand for commodity has a positive relationship with income
Market equilibrium is acquired when demand and supply are equal
Necessities have relatively in elastic price elasticity
Shifts in supply curve takes place due to changes in factors other than the price of the good
Desire for a commodity should be back by ability to pay and willingness to pay to be call as
effective demand
the value of elasticity at midpoint of a straight line method curve is EP equals to 1
Veblen goods are exemption to the law of demand because when their price rises their
demand increases
Cross elasticity exist between substitutes and complementary goods
The two types of demand schedule are individual and market
the demand for salt is inelastic
A desire back by ability to pay and willingness to pay for a commodity is called demand
Implicit demand is also known as derived
