Economy

Economy is the study of human behavior in financial aspects of life.

Humans are considered as decision makers (Consumer, Producer, and Policy Makers). Decisions are subjective things but they depend on the taste or satisfaction of the decision makers.

1) Consumers Decision: What can a consumer buy with the limited resources he has?

2) Producers Decision: How can a producer get more and more profit by using LAND, LABOUR, and CAPITAL?

3) Policy Makers Decision: Policy Makers has a problem of minimal resources. And by using these minimal resources they have to address very many needs of society.

ECONOMICS IS BASED ON SOME ASSUMPTIONS:

1) Resources are limited.

2) Multiple choices or alternatives are there in the market.

3) All the choices are equally attractive.

Optimization is every body’s choice. i.e. MAXIMUM utility, profit, output, satisfaction etc and MINIMUM loss, cost, dissatisfaction, etc.

GNP: Is a Gross National Product, all goods and services that are produced in a country over a given period of time.

GDP: Is a Gross Domestic Product, all goods and services that are domestically produced excluding import and export.

PCI: Is a Per Capital Income, PCI is obtained as the total income of a country is divided by the total population over a given period of time.

PCI = Total Income / Total Population

Tangible Goods: (Concrete, Touchable, Physical, Solid, Substantial, Material, Real) are in solid form like (Agricultural

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