23 august economics for business

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

ECONOMICS FOR BUSINESS

AFTERSCHO☺OL – DEVELOPING CHANGE MAKERS

CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME –

World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship

OPEN FOR ALL FREE FOR ALL

ECONOMICS FOR BUSINESS

Dr. T.K. Jain.

AFTERSCHO☺OLCentre for social entrepreneurship

Bikaner

M: 9414430763

tkjainbkn@yahoo.co.in

www.afterschool.tk

www.afterschoool.tk

Who calls economics as science of wealth?

Adam Smith

And J.B. Say.

Who says: Economics is a science which studies human behaviour as a relationship between ends and scarce means, which have alternate uses.”

Robbins

What is micro economics?

Study of individiual firm or individual in different decision making situations involving scarce resources.

What is Macro economics?

Macro means collectives, thus Study of groups of individiual firm or nations in different decision making situations involving scarce resources.

Who said: “Economics is the study of manking in the ordinary business of life, it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisite and well being.”

Alfred Marshall

Who said : “the range of our inquiry becomes restricted to that part of social welfare that can be brought directly or indirectly into relation with the measuring rod of money.”

GIVE AN EXAMPLE OF POSITIVE SCIENCE?

Positive science is concerned with pure cause and effect relation – for example the law of gravitation.

Give an example of Normative Science?

It gives you the ideal, what should be done and why - example - morals, ethics, social sciences etc.

“Because every human being is a mortal, therefore Ram is also mortal.” – what kind of logic is it – inductive or deductive?

Inductive

“Because Ram died, Mohan died, Sudama died, therefore every human being is mortal” – what kind of logic is it – inductive or deductive?

Deductive

What are the four central economic problems?

What to produce How to produce For whom to produce What provisions are to be made for

economic growth

Who said: “Economics is neutral between ends.”

Robbins

Which of these is a micro problem?

A. Savings rate in India

B. Unemployment in India

D. Pricing decision at Bikaji.

Answer: D

What is M3?

Broad Money

Give examples of some conspicuous goods?

Conspicuous goods are those, where consumers think that higher price means better goods.

Diamond Jewellery MBA programme.

Give examples of Giffin Goods?

The goods which are considered to be inferior to other goods.

Bajra, Jwar etc.

What is utility?

It is the want satisfying power of a commodity.

Which are the 2 approaches towards utility?

Cardinal and Ordinal.

Which approach towards utility says that utility can be measured?

Cardinal

Which Which approach towards utility says that utility cant be measured, but it can be shown as hierarchy or order?

ORDINAL

What are the assumptions of indifference curve analysis ?

1. Consumer is rational

2. Consumer is capable of ranking different commodities

3. If A is preferred to B, and B is preferred to C, A must be preferred to C.

Can indifference curve intersect each others?

Can indifference curve take concave shape?

Can indifference curve take convex shape?

Yes – always

Can a budget line cut many indifference curve?

Yes – infinite.

Name the two mundamental laws, that shape the utility theory?

1. Law of diminishing marginal utility

2. Law of equi marginal utility

Why is indifference curve approach better than utility theory?

It studies more than one commodity at a time

It does not require the assumption of constancy of money.

It doesn’t require the assumption that money can be measured.

What is the most important determinant of supply?

Price of the goods in the market (other determinants are technology, price

of related goods, prices of factors of production, govt. polity etc.).

Who says that production power of land is indestructible?

Ricardo

What is capital formation?

Sustained increase in stock of real capital in a country.

Is entrepreneur also a factor of production?

Yes, besides land, labour, capital.

What are the functions of an entrepreneur?

To take risk To innovate (do something new). Initiate (start a business or some

activity). Coordinate resources More benefits with less resources.

What is economic non-sense or economic absurdity?

Stage 1 and state 3 of law of variable prodportion are called economic non-sense as no producer will produce at that level. Every producer would like to be at stage 2. (the first state is law of increasing return, the third stage is law of decreasing returns).

If I employ labour, my production is as under:

Labour production 2 10 5 35 15 105 20 120 25 120 Where do you have stage 1,2,3. ?

Solution . . .

We have 1st stage till 5 units of labour, we have 2nd stage from 5 to 15 units of labour, we have 3rd stage from 15 to 25 units of labour. The 2nd stage is giving us maximum marginal and average production, so we shall stay in this stage.

What is the difference between law of returns (law of variable proportion) and returns to scale?

Law of returns is related to short term but returns to scale are related to long term.

Law of returns assume only one variable resource (labour). But Returns to scale assumes that all factors of production are variable. (because in long run every factor of production become variable).

Which are fixed costs?

Those costs which do not change with change in volume of production are called fixed costs

Examples: rent, salaries, etc.

What are variable costs?

Those costs which change with change in volume of production are called variable costs

Example: wages, power, carriage inward, etc.

Where will MC curve cut AVC and ATC?

At their bottom. (always). MC = marginal cost curve AVC = average variable cost curve ATC = average total cost curve.

What is long run?

The time in which a firm can change all its factors of production.

What is relation of long run cost curve to short run cost curve?

LAC (long run average curve) is combination of infinte SAC (short run average cost curves). LAC is combination of all the lower points of SACs. It is a lower umbrella of SACs.

Do we have similar products in perfect market?

Yes – homonogenous products.

If the marginal revenue is more than marginal cost, what should the firm do?

The firm should increase production and continue to increase production so long as MR = MC. (the point of equilibrium).

If the income of people increases, the demand curve should shift in which direction?

Upward or rightward.

What will happen at the point, where budget line touches highest indifference curve?

Consumer’s equilibrium

ABOUT AFTERSCHOOOL Afterschoool conducts three year integrated PGPSE (after

class 12th along with IAS / CA / CS) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM. This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society.

Why such a programme?

To promote people to take up entrepreneurship and help develop the society

To enable people to take up franchising and other such options to start a business / social development project

To enable people to take up social development as their mission

To enable people to promote spirituality and positive thinking in the world

Who are our supporters?

Afterschoolians, our past beneficiaries, entrepreneurs and social entrepreneurs are supporting us.

You can also support us – not necessarily by money – but by being promotor of our concept and our ideas.

About AFTERSCHOOOL PGPSE – the best programme for developing great entrepreneurs

Most flexible, adaptive but rigorous programme Available in distance learning mode Case study focused- latest cases Industry oriented practical curriculum Designed to make you entrepreneurs – not just

an employee Option to take up part time job – so earn while

you learn The only absolutely free course on internet

Workshops from AFTERSCHOOOL IIF, Delhi CIPS, Jaipur ICSI Hyderabad Branch Gyan Vihar, Jaipur Apex Institute of Management, Jaipur Aravali Institute of Management, Jodhpur Xavier Institute of Management,

Bhubaneshwar Pacific Institute, Udaipur Engineering College, Hyderabad

Flexible Specialisations: Spiritualising business and society Rural development and transformation HRD and Education, Social Development NGO and voluntary work Investment analysis,microfinance and inclusion Retail sector, BPO, KPO Accounting & Information system (with CA / CS /CMA) Hospital management and Health care Hospitality sector and culture and heritage Other sectors of high growth, high technology and social

relevance

Salient features: The only programme of its kind (in the whole world) No publicity and low profile course For those who want to achieve success in life – not just a degree Indepth knowledge and expertise Professional approac: World class approach Strong intellectual and business capabilities Flexible – you may stay for a month and continue the rest of the

education by distance mode. / you may attend weekend classes Scholarships for those from poor economic background Latest and constantly changing curriculum – keeping pace with

the time Placement for those who are interested Admissions open throughout the year Latest and most advanced technologies, books and study material

Components Pedagogy curriculum and approach based on IIM Ahmedabad and ISB

Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad) Meditation, spiritualisation, and self development Essential softwares for business Business plan, Research projects Participation in conferences / seminars Workshops on leadership, team building etc. Written submissions of research projects/articles / papers Interview of entrepreneurs, writing biographies of entrepreneurs Editing of journals / newsletters Consultancy / research projects Assignments, communication skill workshops Participation in conferences and seminars Group discussions, mock interviews, self development diaryng Mind Power Training & writing workshop (by Dr. T.K.Jain)

Pedagogy Case analysis, Articles from Harvard Business Review Quiz, seminars, workshops, games, Visits to entrepreneurs and industrial visits Presentations, Latest audio-visuals Group discussions and group projects Periodic self assessment Mentoring and counselling Study exchange programme (with institutions out of India) Rural development / Social welfare projects

Branches

AFTERSCHOOOL will shortly open its branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs.

Case Studies

We want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.

Basic values at afterschoool Share to learn more Interact to develop yourself Fear is your worst enemy Make mistakes to learn Study & discuss in a group Criticism is the healthy route to mutual support

and help Ask fundamental questions : why, when, how &

where? Embrace change – and compete with yourself

www.afterschoool.tk social entrepreneurship for better society

23 august economics for business

utility theory

utility cantbe

indifference curve approach

better goods

conspicuous goods

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