PBD Flashcards
Macro Economics
It is that branch of economics which deals with the aggregate economic variables of an economy such as aggregate supply, aggregate demand, general price level, national income etc.
It is a study of the economy as a whole.
Managerial economics
It is the study of economic theories, logic, concepts and tools of economic analysis applied in the process of business decision making.
Equilibrium price
It is the price at which the quantity demanded equals the quantity supplied. The Price of a commodity is determined by the forces of demand and supply.
Perfect competition
It is the name given to an industry or to a market characterised by a large number of buyers and sellers all engaged in the purchase and sale of homogenous commodity, with perfect knowledge of market prices and quantities, no discrimination and perfect mobility of resources.
Monopoly market
It is that market form in which a single producer controls the whole supply of a single commodity which has no close substitutes.
Utility
Utility means want satisfying power of a commodity. Utility is a subjective concept, which differs from person to person.
Law of diminishing marginal utility
The law of diminishing marginal utility states that marginal utility obtained from the consumption of commodity goes on diminishing when a person consumes more and more units of same commodity.
Law of demand
The law of demand states that there is a negative relationship between the price of a good and quantity demanded, holding other factors constant.
Microeconomic
It is that branch of economic analysis which studies the economic behaviour of an individual unit, maybe a person, a household or a business firm.
Giffen goods
Giffen goods are inferior goods that have no substitute and are mostly consumed by low income group and a significant portion of their income is spent for these goods.
Market demand
Market demand refers to the total quantity of a commodity which all individual households in a market would like to buy at a particular price during a specified period.
Price elasticity of demand
Price elasticity of demand refers to the degree of responsive of consumers to a change in price of a product
Unit elasticity
Demand is said to be unitary elastic when a change in price results in an equal and proportionate change in demand.
Cross elasticity
Cross elasticity of demand indicates the relationship between the demand of one product with the price of another product.
Perfectly inelastic demand or zero elasticity
Demand is said to be inelastic when demand is unaffected by changes in price. It means that the quantity demanded does not respond to a rise or fall in price.
