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    What is meant by production function ? This relationship between physical inputs (such as 20 units of capital and 15 units of labor) and physical output (200 units of goods produced) is called the production function.  How many types of production function ? There are two types of production function: i) Short run production function  ii)   Long run production function    short run production function  It is a production function in which factor proportions change with a change in the level of output.  long run production function  It is the production function in which the factor proportion does not change with the change in the level of output.                   fixed and variable factors         Fixed Factors:  Fixed factors are those factors whose use does not change with the change in output.  eg: machine Variable Factors:  Va...

                       What is Supply ? Supply refers to quantity of a commodity that a firm is willing and able to offer for sale at a given price during a given period of a time.       What is  quantity supply ? Quantity supply refers to a specific quantity that the producer is willing to sell at a specific price of the commodity.                 What is supply schedule? A supply schedule is a table that shows the different quantities of a commodity that can be offered for sale at different possible prices.       What are the types of supply schedule? There are two types of supply schedules: i) Individual supply schedule ii) Market supply Schedule            Personal Supply schedule Individual supply schedule refers to the supply schedule of an individual output in the market.           ...

 What is Revenue ? The total amount recieved by a firm from the sale of an item is called revenue. How many types of Revenue ?  There are three types of Revenue ? i) Total Revenue ii) Marginal  Revenue iii) Average  Revenue                What is total Revenue ? The revenue that a firm gets by selling a given output is called total revenue.   TR =P×Q            What is marginal revenue ? Marginal revenue is the change in total revenue when one more unit of a commodity is sold.               What is average yield? Average receipts refer to revenue per unit of output.                AR,MR legend TR price stable                    graphical presentation • TR is increasing at the same rate.  Hence TR is represented by an upward moving strai...

Concepts of Cost|What is meant by cost?|What is meant by explicit cost ?|What are the types of total cost ?|What is meant by average cost ?              What is meant by cost ? cost is the total expenditure incurred in a producing a commodity.                  Type of cost i) Explicit Cost ii) implicit cost iii) Opportunity cost iv) Total cost V) Average cost vi) Marginal Cost            What is meant by explicit cost ? Explicit cost means that which is incurred on the resources that a firm acquires from outside.           What is meant by implicit cost ? Implicit cost means that all inputs are not bought in the market.  The producer also uses proprietary habits in the production process.  this is called implicit cost       What is meant by opportunity cost ? The opportunity cost of producing a good is the quantity of ...

                   Elasticity of demand    What is meant by Elasticity of demand ? The measure of change in the quantity demanded of a commodity due to change in its price,consumer's income and price of related goods is called elasticity.   Factor Affecting price Elasticity of Demand i) Nature of commodity ii) Miscellaneous consumption iii) Habits of consumption iv) Price level               Nature of commodity •When a commodity is a necessity like food grains, vegetables,medicines,etc.,its demand is generally inelastic. •When a commodity is a comfort like fan,refrigerator,etc.,its demand is generally elastic as consumer can postpone its consumption. •When a commodity is a luxury like AC,DVD Player,etc.,its demand is generally more elastic as compared to demand for comforts.            various consumption The demand for goods that have different uses is...

Theory of Demand|What is meaning  of demand ?|What are the types of demand schedule ?|What is meaning by demand curve ?|How many types of demand function ?           What is meaning  by demand ? Demand refers to the different possible quantities of a command that a consumer is ready to buy at different possible  prices of that commodity.     What is meaning by demand schedule ? A demand schedule is a table that shows the different quantities of a commodity purchased quantities of a commodity purchased at different prices.   What are the types of demand schedule ? i) Individual Demand Schedule  ii) Market Demand Schedule                    Individual Demand Schedule  Individual Demand Schedule  means the demand schedule of an individual consumer in the market.                       Market Demand Schedule...

Consumer's Equilibrium Indifference Curve Analysis  IC Analysis as Different From Utility Analysis              utility analysis • The basic limitation of utility analysis is that here the determinant of utility is based on the assumption of forgiveness. • The utility of the recognition of the numerator numbers; For example, it can be expressed in 1, 2, 3 etc.           Indifference curve analysis • The concept of indifference curve analysis is based on ordinal measurement. • According to this concept, utility can only be ranked as high or low. • It can never be expressed in units like 1,2,3 etc. Assumption of indifference Curve Analysis of Consumer's Equilibrium i) The money income of  the consumer is given and does not change. ii) Both objects are substitutes for each other. iii) The consumers is prudent.He always maximizes his satisfaction.                 ...

Consumer's Equilibrium utility Analysis|Who is the consumer ?|What is meant by utility ?                      Who is the consumer ?   Any person who buys and consumes goods and services for consumption. It is called consumer.                  What is meant by utility ? Utility refers to the satisfaction derived from the consumption of something.   How is utility measured ?  Utility is measured in two ways.  i) Quantitative measure of utility  ii) Ordinal measure of utility              Quantitative measure of utility The countable measure of utility means the measure of utility in countable numbers or units;  Like - can be measured in the form of 1,2,3.             O rdinal measure of utility  Ordinal measured means that utility can only be given as an order according to ...