Presented by- Susmita Paul

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 Monetary transactions.

 Internal trade as well as export-import trade.

 Types of tax, collects revenue, spends money for

implementing different projects, prepares the budget every
year.

 Earns money income, spends money for satisfying his/her

wants, saves money for future purposes etc.

 Investment plan, collects necessary fund from different

sources
 Meaning of Economics

 The word Economics' originates from the

Greek word ‘Oikonomikos’

(a) ‘Oikos’, which means ‘Home’, and

(b) ‘Nomos’, which means ‘Management’.

Thus, Economics means ‘Home Management’

Adam Smith, Known as ‘Father of Economics’
Book name- ‘An Enquiry into the Nature and
Causes Wealth of Nation’, 1776.
(1) Unlimited human
wants,

(2) Limited availability

of resources to
satisfy those wants,
and

(3) Fulfilment of
unlimited wants
with limited
resources.
 Scarcity of resources: ‘want is a desire to
acquire something with the willingness to put
in an effort to acquire it.’
(a) What should be produced
and in what quantity?

(b) How these goods should

be produced?

(c) For whom these goods

should be produced?
1. Economics is concerned about
Production

Def- Production is a social activity whose

principal purpose is to change one state
of matter into another.

 For example- a carpenter prepares

wooden furniture from wooden logs.

Inputs- wooden logs

Outputs- wooden furniture
The goods and services with the help of which the process of production
is carried out are called Factors of Production.
2. Economics is concerned about Distribution
Def- Distribution is the allocation of total product
among members of the society.

3. Economics is concerned about Consumption

Def- Consumption is the use of goods and service.
Consumption is the ultimate end of economic
activity. When there is no consumption there will be
no production and distribution also.
4. Economics is concerned about Public Finance
Def- Public finance is concerned with government
expenditures and revenues. To study about how
government raises money through taxation and
borrowings.
 Economics

Micro Macro
Economics Economics
 Micro Economics- the behaviour of individual economic
agents in the markets for different goods and services and try
to figure out how prices and quantities of goods and services
are determined through the interaction of individuals in these
markets. Examples- demand, supply, factor pricing.

 Macro Economics- an understanding of the economy

as a whole by focusing our attention on aggregate measures
such as total output, employment and aggregate price level.
 Economics-Economics is the science and art of decision
making, regarding the use of scarce resources, under the
conditions of scarcity, to attain maximum satisfaction.

 Economy- When a country or a geographical region is defined

in the context of its economic activities, it is known as
economy or economic system.
1.Market Economy/ Capitalism- It is the economic system
where all sorts of economic problems are automatically solved through
market mechanisms of supply and demand.
 Capitalism or capitalist economy is referred to as the economic system where
the factors of production such as capital goods, labour, natural resources,
and entrepreneurship are controlled and regulated by private businesses.
 Features-
 Private property
 Freedom of enterprise
 Profit motive
 Price mechanism

The first and the most famous work in this direction was by the Scottish philosopher
economist, Adam Smith in ‘The Wealth of Nations’(1776).
2.Socialist Economy-If all the economic problems are
corrected through economic planning undertaken by
the government, then that economic system is called
centrally planned economy or Socialist Economy .

 Features-
 Working class assumes the political power
 Restrictions on economic liberty
 Absence of market mechanism
 Absence of right to property
3.Mixed Economy-There is a type of economy which
neither capitalistic nor socialistic in nature but co-
exist of both.
 Features-
 Partial restriction on individual liberty.
 Co-existence of private and public sector.
 Tries to maximize return of Economic activities in which its in
involved.
 In Primary sector of economy, activities are
undertaken by directly using natural
resources. Agriculture, Mining, Fishing,
Forestry, Dairy etc. are some examples of
this sector.

 It is called so because it forms the base for

all other products. Since most of the natural
products we get are from agriculture, dairy,
forestry, fishing, it is also called Agriculture
and allied sector.

 People engaged in primary activities are

called red-collar workers due to the outdoor
nature of their work.
 It includes the industries where finished products are
made from natural materials produced in the
primary sector. Industrial production, cotton fabric,
sugar cane production etc. activities comes under
this sector.

 Hence its the part of a country's economy that

manufactures goods, rather than producing raw
materials.

 Since this sector is associated with different kinds of

industries, it is also called industrial sector.

 People engaged in secondary activities are called

blue collar workers.
 This sector’s activities help in the
development of the primary and secondary
sectors. By itself, economic activities in
tertiary sector do not produce a goods but they
are an aid or a support for the production.

 Goods transported by trucks or trains,

banking, insurance, finance etc. come under
the sector. It provides the value addition to a
product same as secondary sector.

 This sector jobs are called white collar jobs.

 Pink-collar worker is one who is employed in a job that is traditionally considered to be women's work.
The term pink-collar worker was used to distinguish female-orientated jobs from the blue-collar worker,
a worker in manual labor, and the white-collar worker, a professional or educated worker in office
positions.

 A pink collar worker need not require as much professional training as white-collar professions. They do
not get equal pay or prestige.

 A pink collar worker is usually a woman. Men rarely work in pink collar jobs. Some examples of pink
collar occupations are baby sitter, florist, day care worker, nurses etc.

 Lately, the pink collar worker is educated or trained. Pink collar workers are educated through training
seminars or classes and they have to continue to strive for advancement in their careers.
Thank You
 The most fundamental economic problem is
A) security.
B) the fact the United States buys more goods from foreigners than we sell to foreigners.
C) health.
D) Scarcity
Answer- D

 Economics is best defined as the study of how people, businesses, governments, and societies
A) make choices to cope with scarcity.
B) attain wealth.
C) choose abundance over scarcity.
D) use their infinite resources.
Answer- A

 Which of the following is a microeconomic topic?

A) the reasons for a decline in average prices
B) the reasons why Kathy buys less orange juice
C) the cause of why total employment may decrease
D) the effect of the government budget deficit on inflation
Answer- B

 Studying the determination of prices in individual markets is primarily a concern of

A) negative economics. B) microeconomics.
C) positive economics. D) macroeconomics
Answer- B
 Which of the following is an issue in macroeconomics?
A) the purchasing decisions that an individual consumer makes
B) the effect of an increase in the tax on cigarettes on cigarette sales
C) the hiring decisions that a business makes
D) the effect of increasing the money supply on inflation
Answer- D

 Entrepreneurs do all of the following EXCEPT

A) bear risk from business decisions.
B) own all the other resources.
C) come up with new ideas about what, how, when and where to produce.
D) organize labor, land, and capital
Answer- B

 To answer the "for whom" question, we study

A) business cycles. B) technological change.
C) the global economy. D) income differences
Answer- D

 The opportunity cost of any action is

A) the time required but not the monetary cost.
B) all the possible alternatives forgone.
C) the highest-valued alternative forgone.
D) the monetary cost but not the time required.
Answer- C