CBSE 12th Class Economics Notes: Introduction

"Dear friends,

Hope you are doing well! .As we all know due to COVID-19 certain breaks occurred in our lives .One day when I was cleaning my cupboard I found my handwritten 12th class economics notes & at the same time my friend called me up and she started telling me that she wrote a blog , suddenly I got an idea for my personal economics notes blog .This is my first post related to micro-economics .I hope it will benefit you a lot in your studies.

chapter :1 Introduction

Economy:

It is a system where people earn there living livelihood in the process of production of goods and services.

Economy Problem:

It is a problem of choice which arises due to scarce resources having many alternative uses to satisfy unlimited human wants .

Features

1. Resources are scarce

2. unlimited human wants

Scarcity

when demand of a commodity is more than its supply

Demand > supply =scarcity

Scarcity means demand of commodity /good and services /resources is more than its supply.

Central Problem Of Economy

A: What to produce

B: how to produce

C: whom to produce

A:WHAT TO PRODUCE:

It is the basically problem of choice of production of goods and services.
Basically it is a problem of allocation of resources to give maximum satisfaction .
This decision is taken on the basis of economy needs and wants.
for eg : the economy has to decide whether to produce consumer goods,producer good ,luxury goods etc.

Opportunity cost: It is a next best alternative use which is forgone.

B: HOW TO PRODUCE:

Basically it is a problem of choice of technique for the production of goods and services.
This decision is taken on the basis of economy needs and wants.
For eg: In country like India there is surplus of lobour the economy will use lobour intensive technique and In the country like america there is surplus of capital so the economy will use capital intensive technique.

C: FOR WHOM TO PRODUCE