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BA Economics Sem1 Notes English

The document provides an overview of key concepts in Economics, including its two branches: Microeconomics and Macroeconomics. It covers fundamental principles such as demand and supply, consumer behavior, and production costs, emphasizing concepts like scarcity, opportunity cost, and utility. Additionally, it explains the laws of demand and supply, elasticity, and various cost concepts related to production.

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1K views2 pages

BA Economics Sem1 Notes English

The document provides an overview of key concepts in Economics, including its two branches: Microeconomics and Macroeconomics. It covers fundamental principles such as demand and supply, consumer behavior, and production costs, emphasizing concepts like scarcity, opportunity cost, and utility. Additionally, it explains the laws of demand and supply, elasticity, and various cost concepts related to production.

Uploaded by

aminashajahan432
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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BA Economics Honours - Semester 1

Notes (English)
1. Introduction to Economics
Economics is the study of how people use scarce resources to satisfy unlimited wants.
It is divided into two main branches:
- Microeconomics: Study of individual units (consumers, firms)
- Macroeconomics: Study of the economy as a whole

Key Concepts:
- Scarcity: Limited resources
- Opportunity Cost: The next best alternative foregone
- Utility: Satisfaction from consuming goods or services

2. Demand and Supply


Law of Demand: When price rises, demand falls (and vice versa), other things remaining
constant.
Law of Supply: When price rises, supply increases (and vice versa).

Equilibrium: Point where demand equals supply.

Elasticity:
- Price Elasticity of Demand = (% change in quantity) / (% change in price)
- Types: Elastic (>1), Inelastic (<1), Unitary (=1)

3. Consumer Behaviour
Utility:
- Total Utility (TU): Total satisfaction
- Marginal Utility (MU): Additional satisfaction from one more unit

Law of Diminishing Marginal Utility: As we consume more units of a good, the marginal
utility from each additional unit declines.

Indifference Curve: Shows combinations of two goods giving equal satisfaction. Downward
sloping and convex to origin.
Budget Line: Shows all combinations of goods that can be purchased with given income.
4. Production and Costs
Production Function: Relationship between inputs (land, labor, capital) and output.

Law of Variable Proportions: As more of one input is added, output increases at a


decreasing rate.

Cost Concepts:
- Fixed Cost: Does not change with output
- Variable Cost: Changes with output
- Total Cost = Fixed + Variable
- Marginal Cost: Cost of producing one more unit
- Average Cost = Total Cost / Output

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