CHAPTER – 1 | INTRODUCTION TO ECONOMICS

Unit
1

Introduction to Business Economics and

Fundamental concepts:

Nature, Scope, Definitions of Business Economics, Difference between

Business Economics and Economics, Contribution and Application of
Business Economics to Business. Micro vs. Macro Economics.
Opportunity Costs, Time Value of Money, Marginalism, Incrementalism,
Market Forces and Equilibrium, Risk, Return and Profits. Introduction
to Behavioural Economics: Nudge theory.
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS


 CHAPTER – 1 | INTRODUCTION TO ECONOMICS


CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS


 CHAPTER – 1 | INTRODUCTION TO ECONOMICS


CHAPTER – 1 | INTRODUCTION TO ECONOMICS


CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS


 CHAPTER – 1 | INTRODUCTION TO ECONOMICS


CHAPTER – 1 | INTRODUCTION TO ECONOMICS
 CHAPTER – 1 | INTRODUCTION TO ECONOMICS

Now let's present the information in a table:

CHAPTER – 1 | INTRODUCTION TO ECONOMICS
 CHAPTER – 1 | INTRODUCTION TO ECONOMICS

The time value of money encompasses two fundamental concepts:

CHAPTER – 1 | INTRODUCTION TO ECONOMICS


 CHAPTER – 1 | INTRODUCTION TO ECONOMICS


CHAPTER – 1 | INTRODUCTION TO ECONOMICS

Future Value = FV =
 CHAPTER – 1 | INTRODUCTION TO ECONOMICS

PV =
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
 CHAPTER – 1 | INTRODUCTION TO ECONOMICS


CHAPTER – 1 | INTRODUCTION TO ECONOMICS


 CHAPTER – 1 | INTRODUCTION TO ECONOMICS


CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 1 | INTRODUCTION TO ECONOMICS
 CHAPTER – 1 | INTRODUCTION TO ECONOMICS


CHAPTER – 1 | INTRODUCTION TO ECONOMICS

Economic Profit = Total Revenue - (Explicit Costs + Implicit Costs)

₹
₹


₹ ₹ ₹

₹ ₹ ₹ ₹
₹

₹
 CHAPTER – 1 | INTRODUCTION TO ECONOMICS


CHAPTER – 1 | INTRODUCTION TO ECONOMICS


CHAPTER – 1 | INTRODUCTION TO ECONOMICS
CHAPTER – 2 | BEHAVIOURAL ECONOMICS
 CHAPTER – 2 | BEHAVIOURAL ECONOMICS


CHAPTER – 2 | BEHAVIOURAL ECONOMICS
 CHAPTER – 2 | BEHAVIOURAL ECONOMICS


CHAPTER – 2 | BEHAVIOURAL ECONOMICS


 CHAPTER – 2 | BEHAVIOURAL ECONOMICS


CHAPTER – 2 | BEHAVIOURAL ECONOMICS


CHAPTER – 2 | BEHAVIOURAL ECONOMICS
CHAPTER – 2 | BEHAVIOURAL ECONOMICS
 CHAPTER – 2 | BEHAVIOURAL ECONOMICS


CHAPTER – 2 | BEHAVIOURAL ECONOMICS


 CHAPTER – 2 | BEHAVIOURAL ECONOMICS


CHAPTER – 2 | BEHAVIOURAL ECONOMICS


 CHAPTER – 2 | BEHAVIOURAL ECONOMICS


CHAPTER – 2 | BEHAVIOURAL ECONOMICS
 Unit
2
Consumer Behavior and Demand Analysis:

Cardinal Utility Approach: Diminishing Marginal Utility, Law of Equi-

Marginal Utility. Ordinal Utility Approach: Indifference Curves, Marginal
Rate of Substitution, Budget Line and Consumer Equilibrium. Theory of
Demand, Law of Demand, Movement along vs. Shift in Demand Curve,
Concept of Measurement of Elasticity of Demand, Factors Affecting
Elasticity of Demand, Income Elasticity of Demand, Cross Elasticity of
Demand, Advertising Elasticity of Demand. Demand Forecasting: Need,
Objectives and Methods in brief.
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
 CHAPTER – 3 | CARDINAL UTILITY


CHAPTER – 3 | CARDINAL UTILITY


 CHAPTER – 3 | CARDINAL UTILITY


CHAPTER – 3 | CARDINAL UTILITY
 CHAPTER – 3 | CARDINAL UTILITY


CHAPTER – 3 | CARDINAL UTILITY

₹
₹
₹
₹
₹
₹
₹
₹
 CHAPTER – 3 | CARDINAL UTILITY

₹
₹
₹
₹
₹
₹
₹
₹

₹ ₹
₹ ₹
₹ ₹
₹
₹

₹ ₹
₹ ₹

₹ ₹
CHAPTER – 3 | CARDINAL UTILITY

₹
₹ ₹ ₹
₹ ₹

= =……….
 CHAPTER – 3 | CARDINAL UTILITY


CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 3 | CARDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
 CHAPTER – 4 | ORDINAL UTILITY


CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY

MRSxy = Px/Py.
 CHAPTER – 4 | ORDINAL UTILITY


CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 4 | ORDINAL UTILITY


 CHAPTER – 4 | ORDINAL UTILITY


CHAPTER – 4 | ORDINAL UTILITY


 CHAPTER – 4 | ORDINAL UTILITY


CHAPTER – 4 | ORDINAL UTILITY
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS


 CHAPTER – 5 | DEMAND ANALYSIS


CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS
 CHAPTER – 5 | DEMAND ANALYSIS


CHAPTER – 5 | DEMAND ANALYSIS

Figure: 2
Expansion In demand
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS

Figure- 4 depicts Rightward Figure-5 depicts Leftward Shift

Shift in the Demand Curve in the Demand Curve (shift of
(shift of D1D1 to D2D2) due to D1D1 to D2D2) due to factors
factors other than price. This is other than price. This is
Increase in Demand Increase in Demand
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS


 CHAPTER – 5 | DEMAND ANALYSIS

Table: 1 Inverse relationship between Price & Demand

₹
5 (₹)
4 (₹)
3 (₹)
2 (₹)
1 (₹)

Figure-6 Downward sloping Demand Curve

₹
₹
₹

₹
₹ ₹ ₹ ₹
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS
CHAPTER – 5 | DEMAND ANALYSIS


 CHAPTER – 5 | DEMAND ANALYSIS


CHAPTER – 5 | DEMAND ANALYSIS
 CHAPTER – 5 | DEMAND ANALYSIS


CHAPTER – 5 | DEMAND ANALYSIS
 CHAPTER – 6 | ELASTICITY OF DEMAND


CHAPTER – 6 | ELASTICITY OF DEMAND
 CHAPTER – 6 | ELASTICITY OF DEMAND

∞
CHAPTER – 6 | ELASTICITY OF DEMAND

∞
 CHAPTER – 6 | ELASTICITY OF DEMAND

Elasticity = Ep =1

D
CHAPTER – 6 | ELASTICITY OF DEMAND
 CHAPTER – 6 | ELASTICITY OF DEMAND


CHAPTER – 6 | ELASTICITY OF DEMAND


 CHAPTER – 6 | ELASTICITY OF DEMAND


CHAPTER – 6 | ELASTICITY OF DEMAND

Where,

q= Original Demand


CHAPTER – 6 | ELASTICITY OF DEMAND
CHAPTER – 6 | ELASTICITY OF DEMAND


 CHAPTER – 6 | ELASTICITY OF DEMAND


CHAPTER – 6 | ELASTICITY OF DEMAND

obtained


 CHAPTER – 6 | ELASTICITY OF DEMAND


CHAPTER – 6 | ELASTICITY OF DEMAND


CHAPTER – 6 | ELASTICITY OF DEMAND
CHAPTER – 6 | ELASTICITY OF DEMAND


 CHAPTER – 6 | ELASTICITY OF DEMAND


CHAPTER – 6 | ELASTICITY OF DEMAND





CHAPTER – 7 | DEMAND FORECASTING
CHAPTER – 7 | DEMAND FORECASTING
CHAPTER – 7 | DEMAND FORECASTING
CHAPTER – 7 | DEMAND FORECASTING
CHAPTER – 7 | DEMAND FORECASTING
CHAPTER – 7 | DEMAND FORECASTING
 CHAPTER – 7 | DEMAND FORECASTING


CHAPTER – 7 | DEMAND FORECASTING


 CHAPTER – 7 | DEMAND FORECASTING


CHAPTER – 7 | DEMAND FORECASTING


 CHAPTER – 7 | DEMAND FORECASTING


CHAPTER – 7 | DEMAND FORECASTING


 CHAPTER – 7 | DEMAND FORECASTING


CHAPTER – 7 | DEMAND FORECASTING


CHAPTER – 7 | DEMAND FORECASTING
CHAPTER – 7 | DEMAND FORECASTING
CHAPTER – 7 | DEMAND FORECASTING
CHAPTER – 7 | DEMAND FORECASTING
CHAPTER – 7 | DEMAND FORECASTING