The Indifference Curve Analysis approach was first introduced by Slutsky, a Russian Economist in 1915. Later it was developed by J.R. Hicks and R.G.D. Allen in the year 1928. What is Indifference Curve? Koutsoyiannis (1985) defines the indifference curve as the locus of points particular combinations or bundles of goods which yield the same utility …
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Theory of Consumer Behaviour assumes that you can only order or arrange your preference in order of priority, you cannot quantify the level of your satisfaction. After reading this summary, you’ll have a clear understanding on the theory of consumer behavior, I will also introduce you to the concept of the indifference curve, budget lines, …
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Generally, the more of a particular commodity human being possesses the less the intensity for more. Hence man’s subsequent unit, desire diminishes. The law of diminishing marginal utility was first formulated in 1854 by Hermann H. Gossen, though the name was given by Alfred Marshal and Jevons calls it Gossen’s first law. Gossen defines it …
Elasticity concepts generally deal with the response(s) of demand or supply to its determinant; in the course of our discussion of demand and supply, their determinants were discussed. The Elasticity of Demand and Supply. Elasticity measures the extent of change in the quantity of a commodity demanded by a consumer or supplied by the producer, …
The concept of price theory came into being as a concept of valuation, i.e. the medium through which values are attached to goods and services. The concept of price theory arises as a result of the introduction of money into the economy. Supply and Demand The theory of price involves the process by which the …
Scarcity | Choice | Opportunity Cost Three big questions summarise the scope of economics- How do choices end up determining what, how, and for whom goods and services are produced? Goods and services are the objects that people value and produce to satisfy human wants. What we produce varies across countries and changes over time. …
Monetary Policy Monetary policy refers to the combination of measures designed to control the supply of money and credits conditions in an economy for the purpose of achieving macroeconomic goals. In other words, it is the regulation of money supply, interest, and exchange rate through the monetary authorities with the view of achieving macroeconomic objectives. …