310822

Wedutsday Managial
Economics.
E.cONOMICS.
Jhu toxnm "Ecomomicscomu hom guk
woLd iskos" hich muams uouua and
ems" whih muans uskom on lau.
Thvue economucs tm dikinnd as
a body kuouHLolgu n 3kudy hat_
diauss hoo a society tuies o solve
thu Humans broblum e unlimited
Manls amd seaA LSourus.

4 Wealkn Deniliom ot Etonomics

Jhis cu uisu by Adau snit," jn
Atcordin4 to him it a ai
emquryuto thi abuu el tausu
Ralt u alim.
Wetanu Deluilian Gtomomics
Jhis ukas qiw b 'ALarel Hans kalu"in

*FABER-CASTELL
 1885". According to
thu
him tconomics
study ma kind iu thu
ARALday businis4 e comomic A sia bucau it tallows
nteiustiol im unduiy ut He wa4 Bc imiplu tdala lludim
uwralttu houo a mthodlsqy and Rmelusion o uuse
ku halioh u uud tor
tu uacu o massus. Aproblum qu4lom
Eomomio i a Axt bucaus i tdualu witu
Scancily Auuuiom tououcs Omalysiso_Jhuumam buhaniguw Mu Yugands
Jus uuas q\umu by ** Lionl lebbins u Jo Comsumpliom, podu.dtiom disti.buliin,
19Accordung io im womenius ia
cienL ith skudy huunan hhaian
s A ulalienslup bkaseauulimited
wans amd canL urA wi hae..
allexnaliue us YOaulie cmomics tablias ulalonuluip
btem Lo and suer it dssnibe
whod i an wonie ituadiom t
i duoid sa Voluu udgtmmA
or eaaapkuj Icrease iupeio cOM
ad todscrease M can sals,
Nalomal Income aLoudy al a
paticuloHL dalo reasL wmplounma
 Aomatium econoiuco coneuuee suikt Decisiow Rulu
qusion imeiuinq valuu judgunuut
it is "wlhat uglt to be" a au 1. Opp.catuty cot
economie sihuatien .Au peley PpOu wst is tu buuft r gomu
making _dicision_a related to net but alternalm that iu
hor matu ecmomlo
for eaumplti Pedcy suganding A Managek ihas to mak roiiomal coseu
hualth, Lnrastuctora te. a l l hspucts _busints i e rsuruA
aL sca and iants a Unlimitd.Jia
tconomic is Hcko and Hacno iono mits preblum_ocuoiu makis it ucuss o o

MCHO Lconomic6 cmcun with kuu

skudy s4 blhaiu small ecmomi th onu Atllchol Indiidual audrms
w i l thal is, lhoustheld iucas s make suc duouow baud on eueuli g
imn ucas ot Arealm buuita m omu atemalii
produuclun

Macho tcmmonics i a skudy Examplu1 "A Busm k wori mA

darent sitins.Lwdiuiduall
Mg egals in thu umom "oncp bo
parega ukput haomal Examplss, A im may mak a usiu
uLouitgOnd ualibt may Lommut
Momi aDP inalio mumploymtmt
lwels, poeiy Luels, internili onäk d u o qually Mareby nåbLcg
Tads, o are all_bol HacrD emanws itFaREP-CASTELL
 o smallr uustomu
baau
hus
podust at a kighu priubs or
sulling thu duciaiom hu
may ducuol to cduonsi amo it & ncremental kuo oasio Componeut
. asmmg auL
Compi qualuly lous tupiu Iwcremuall Cost
ordu o aptuiL a lxgn market. Icrmuda Ymu
Mrmutal ost may b
*u dhang u Iola cost cuuud
As
hCYememtal Cos resuuking
Ot in a ual uwrld. it is om aba7liuulan dicium lnuremeutall
diuiuu lo implumut khe manginal YeNeLLL in tae thangu in total reu
pa ncipl bicause it i di hiult" t UAulting hom a paliuda dicis
ebtau pLT_ t eakimati 4_dimaud
And kuL Cost kluudore oltin iu Puit TR- TC or lncremeukal RiARL
busims duciso nim mtal dusseu nremAutal Lost.
J lwcremutal primäpl may beu.
crememtal toncpt imalues esimclung Atatedas lo ws
t impact dcisi om alermati o
C0st amd rueu, omplasuug tu A Dec a a pyeitabl m k
a) nreaams hARMul me than tAt.
change i lola cas ahd tuka
9 5t_dcreasss A0ML C0st to he greater
Ywei esuling henn changing r Ahan i inceasss ttuw
produet pocudne iwestmut or InCreasos bomu reeuu mo tuen. ik
Ntodener e mou b aL Akuke ducreass fur ouwd._
dtedues L MOre aan YeveMULA.
 Mangunal Paiiplu a) Mamginal Utiuily, MU: TUn-TU=
hHal a Mauginal nalysu MU = TU)
Jh change in Toial quauity_duu o Ooc)
pen uaitchange n thu vanablu tacor.
Total Maunal Avexa
a)Maginal losL MC: TCn-TCn- Labuwu Phodut hoduek Produd
(TP) (MP) CAP)
MC o(TC)
2.00
oukput þoduud)
2 2.50
3 3.00
b)Maginal Produ MP: TPn TPn- 3.00
12
MP =_o(TP) 5 14 2
2-80
2.
d(L) 6 15
15 2.14
11
4 -| .15
Magral Rwu MR: TKnTRn-

MR (TR) Adinliom
O(oukput 3eld)
. axgunal Cost ManaLhall tost _changp a
 uantiy Producud allocaliom khuir scan resaurcus
bluil miimiyiq 0sts and mani miznq
Mauginal Product: Hongual Producl iu beuulia
t chaug in tetal poduct duu to Tw,Hanginal analyaii mmawu the
per i t changu in He ud o input.. redatiomohip buhueAn hwmOLLA LLMomiu
vaniabtaud qurau eumomic
3 Manginas Reweut: Mauginal Rwenu is Comeupt Auch as marainal produet
H dhamgu in olal reuenus duu to mArgLnal tost, marginal reARMuL
per ut claange Ha 0ukpl sslo.. margunal util,le.
.Maoinat tilily: Maginal utily u
total uity d to _eT uKt change

Mauginal Analysis uhich tomms wmd

ymondeceuomis tuoy. u an analysis
Hha als iku marai nal shange
giwen economics yaiablu This
a uul deisiom maling oel
Hhat Jutp indiuidual andbusinssa
o aksdisio regar ding
E
 uliddy 4tu goed ta ku khing diminisluiu uitu wey. ncnease
Cnsumd.
in t sok hd1 hu already has.

Law Dimiuiahing Mauainal Aswmbliom o u haud.

4. A Comsumuh _tomawnu move and

Thehane diminiaing maginal
more nit o utili s basd o tiu muasuiumut
somu tommoddg
duning A baitulan m , kuu 4uiu
utilly h duies hwm tls
SuCc.ne uit mlu dimis aUti s masnd terma mon
Tu anw that tuL mangial.
assume
On 0rdu wds,t u additional
satistacli duied homu additi Mtiily monupb constant
Ona Unit eh a_Commo dl gals
OM dicYLaALMg- 3 heuL alhould hat be amg mm qop
bubuee ons umpton oni
ALLed Manshatl duinsu hass e wit anol the otwr i t .
ninisling Hangunatillt as
ehih T wwt e Hr tomm modibs_are hemogeuiou
T adaitKonal buui
ie. u ani allike m aizt and uality
sbok
57Th onsumu s asund to emional
FABER-CASTELL
aFaRER-SASTELL
 TU MU
FE Totdl auiginalLuiiy
 Relalionalip betwem TOtal titp or tnaum plu, Utiit duuiws hom A
Util aud, Harginal utilla qeaten HhanB.
dhis undusteod
uwn Tu InCYeass MUÀ hallung uirh tu ulp
IndihveMu uns.
2whm Tu u Haumum,HU buoms zuo.
ndieHn Cuws
S un TU dicreasis M0 buomus nugali.. An Inditherenc
U unus dpics vauieua
COmbinatuon Tu)_g40os ucu
As udunskecd by tu Digram a ais sam iml salutaclew
lensumu Mall këiep tonsuming
succeoaie nit 4 a gooo AsAUmplion Idi teree luue
t l hu Harginal utiu u 20Ho. 1.
Utillty is ordinally masuud Uililp
ORDINAL UTILITY
Ondinal Uilt, uuas qm by."Al his Ma preerencu bubus aia
anol Hiwhs" g00ol
Accerdg to Ordinal Utilly ompl, hu burs A To Bo hu
Loncupt utilty a na terq pu B To A. He u InditHKemt
Lovtiiabt 0r mLasured but it buwe A and 8.
tan bi rauked
FaBER-CASTELL
.t s Dssumed that tu Consum s s
Rationalaud uhas complute
kueoludge about tu conditions

.Jhhabbita and tasti e tluu Comsumur

do netclhang
4.h Haugunal hal a tu suklitulon
dimishina 4

5. ueHUMeLs tu consum a u
asMumLd to bu kraniti M hatu Chanacuslic /Featwuu ek lndikrue
Thu Comsum preo A o B amd Cuwwe
Ye 6To C He pre ATo c
1.ndieRncL uwwe auu ngalimly 0
Combinaliom hy o doumwao Asping dhu is bièausu hu
geods Conaumu Consume me 400 X hu
A i l ha to cuL doum his
lonsuplion goody lmpluina iat
5 900o ca he awaiukidu or eac sttu
Jis has to b donL ordn o remain
*FABER-ASTELL
FABER-CASTELL
 on tu saM molimrmeu_ ume
and to ensuu that lel e u
3.ndieune uwne ixtesuct uir eackw
utiluty remans tu sam.
To Phene,ut Ms cassums uo
Cwue intesuct
luditreue
ndieunc uwm is lonm to tu
0ug
Jhis is bucaus dinishing Harginal
Ratn o subslikulion Hanginal rall o C2
Aubstikuliom s4 goao X or g00d y
Comsunesu wiliunq qn up in -kyx
oOrdur to mcreae tonsiumpluon As ahou in
u diqram u kuwo
good X by 1 i t , whue utii IndkreL u e LC and LC2 luteaul
umauns u sam Hangiual Ral at pout E Paut E lu on tu bat&u
Auubstilubion also ku MopL tu wwe Thi also mans Hhal A,6,B
idiureL ue OM C2 al ginu olissaiion 120D
MRSxy Sep e IC AY E, D ius n lC aud al sal
6X 100 Jis lmplits Hat tu at pout E
Combination Xaud Y1 Commoditis
FABER-CASTELL
 l20, wwh ia par praciualy at
pAssible ndikhrmeu Cuu lauus
Iteraect
4. Highw tham di tuuwe wu Bucgslie
tu salis taclion ughus

eod /P
BUDGE LINE
A Budlgr luu slhoms a vasios th albone enplainaiom.
Combinaton e to gscds uit tuu
LOMsmntan bunchasu gim hua Mu Inomuo tuu lenaumu
monu . Pu auL Paiu a geodX and
incoms aud pieu tu geods. and
4s0d Y reapuclivelye
3 B and y u uauliy good X auo
gecd y kuspLdli valy
4.MP is tu intexcupt 4 budgil Jiu
T valuu Cuaully g.cod whu
3.y M_-b0 D amaut da u pürhasud
5.
aund thu -w igw dlmole Hhal tu
budqut din is dounward slaping.
FABER-CASTELL
 Conaumeu's Equilibrium
Necessa lomdlitiem

MRSxy_'u

A Conawmu aelie equii baiumn 2.Suhkiiut tondilion

utn u maimiz hs utilily guin his At tu bouut 4 tanguney. Hu Haxgiual
momy ama aud paius gcod. hat o ubstitution x r y
A Comsumu ia JA equili bium Huw dirninisking
hu iu abl to rachw tu kiglust
Indikaree urveqAnA hu budgut Explainalion odig-+
Lomstraut. AA explauiud By tk diagramm kau a

Lauilibium Jotlouimg. ondilibm Budlgut luu ia sluaum s B.

should b alistiud. T Nu Condillon wL lope
L MopL Budgt lisu a mit at

eqilibuwm bucauue kuy lu m loue

FABER-CASTELL
 Indiee w UC) bL backud by thu abilily to _buy hu
Paut is u bsust o uulibium geoo Ju furthaing pauun ullingns
bucaust batu tu _Condition a along s nat sutiit hor a good
Mia pisd at Hus boist aud _albo To b dumaudud
Paunt h launat be paunt quilibrium i 3. Dumamd s aluoays mit reurene to a
bucauu t lis buyond tu budaut Llam timu.
Cematraiut
4.Dumaund. jor geod dupunds on Hu.
DEMAN D willy
uaulily Dumauolid 4tlu gooo iu
tu amdunt 4 iu gooddmandid Denad funiim.
at a bascula puid owa YYY
CUdaiu timu D "( , Y,T)
Chanactexsluo Dnand
mamd mlin tor agsod shous
Dimano ora g00d orr a Aiu u relatiouahip 4dunand 0a
alusays est a pastiudan priu paati culan bradluct uth vauious eskv
hi t uet dumand k tu pmdut
Awnand kor a Aood Ahould alonus
FABER-CASTELL FABER-CASTELL
 As m in tu ahe expr lsaio Dennand Cuwe
t Dumand 4 p0duct x (Dx) 3 Araphi.ua represuialion s
ÄA dupemdut ow þie o4 tu produdt ulatmship buhe dumamd tu
x (Pa) Puk Xelated. geod. PR) product and pCL 4 u produuet
Rulatid geods ëan be substitul
Qnd tampliemuutA Incomu 4 Hu hat Dunand.
Atcording o ant Dumad thin
h LMAWmun (T). eist amd In.ueL iladien and.
Quautil dunaudid boduct
Demand schudulu Ond priL thpo.dust assumiug-
DLumamd sehedulu dpiek quanlity athun tungs uh As mieu relatud
thi qaod ushi s dumandid q0ds taslu pritrte t gaod
Lochu paiu assumina pue Yemain omstout
skiau good uonm 4onaumii
anol toste p preus to Yemain.
Ceters Paibua Ltkue thuigs Yema
u ore it is abulak yelalimalip Comstoudl
btuwe dumand and uiu
thL product