SEMESTER-I : B.A. L.L.B.

Economics – 1
Fundamentals of Economics for Lawyers
Module: 1- Introduction and Basic Prerequisites
Lecture: 4
Topic: Models in Economics
Bishakha Ghosh
Assistant Professor
NALSAR UNIVERSITY OF LAW
HYDERABAD
Ten Principles of Economics…contd…

Economy as a whole
8. Productivity - the quantity of goods and services produced from
each unit of labour input, its implication on other things like policy,
education, competition etc.
9. Inflation- an increase in the overall level of prices in the economy
10. Trade off between inflation and unemployment -business cycle-
fluctuations in economic activity, such as employment and production.
Functions and Graphs

1. Variable and attribute

2. Types of relation
3. Types of graphical representation
4. Average and marginal
Variable and attribute

• The character of statistical information collected from a group of individuals or

objects are of two types
• Qualitative information
• Quantitative information
• Variable – quantitative character (ex:- Height, weight, marks score in exam, wage)
1. Dependent Variable
Value is determined by value of independent variable. Ex: savings of an individual ,Weight of a
person
2. Independent Variable
Value cannot be influenced by other values Ex: Age of an individual

• Attribute – qualitative information Ex: Religion, colour, gender

Types of relation between variables

1. POSITIVELY RELATED
Value of dependent variable is directly proportional to the value of
independent variable (ex:- Supply increases with increase in price).
2. NEGATIVELY RELATED
Value of dependent variable is inversely proportional to the value of
independent variable (ex:- Demand decreases with increase in price).
3. CONSTANT RELATION
Value remains same (ex:- No change in demand/supply due to change in
price).
Types of graphical representation
• Pie diagram Households cultivating (Per-
• A circle whose area is divided among the centages)
different components by straight line
drawn from the center to the
circumference of the circle.
• It is used to compare between categories
or between a part and the whole.
Types of graphical representation
(contd…)
• Bar diagram Bar Diagram
• Consists of a group of 1200
equispaced rectangular bars, 1000
1000
one for each category of a
given statistical data. 800

Production of Commodity
700
• Used to compare across 650
600
categories. 500

400 320

200

0
Country
Average
• The word “Average” denotes representative or a typical value of a
whole set of observations.
• Since a typical value usually occupies a central position, some
observations are larger, some are smaller than it, it is also called
“Measures of Central Tendency”.
• It is calculated as the sum of the observations divided by the number
of observations.
Marginal
• The word “Marginal” denotes the change in value of a dependent
variable due to change one unit change in the value of the
independent variable.
• It is measured as change in value of dependent variable divided by
one unit change in the value of dependent variable.