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CBSE 12 Introductory Microeconomics
Market equilibrium is achieved when the quantity demanded by consumers equals the quantity supplied by firms, resulting in a stable price and quantity in the market. Understanding the behavior of supply and demand helps in analyzing market shifts, which affect equilibrium price and quantity. The influence of government interventions, like price ceilings and floors, further illustrates the complexities of maintaining market balance.
Course Chapters
Introduction
The chapter introduces the fundamental economic problems faced by society, focusing on the scarcity of resources and the choices individuals must make to satisfy their needs. It discusses the central problems of production, consumption, and distribution within an economy, emphasizing the importance of resource allocation. The concepts of centrally planned and market economies are explored, along with the distinction between microeconomics and macroeconomics.
Theory of Consumer Behaviour
The chapter delves into consumer behavior, specifically focusing on how individual consumers make choices regarding spending their income on goods that maximize their satisfaction. It introduces the concepts of Cardinal and Ordinal Utility Analysis, explaining how preferences and prices impact consumer decisions. The chapter concludes with an understanding of demand, elasticity, and the factors influencing consumer choices in the market.
Production and Costs
This chapter explores the behavior of producers, focusing on the production function and costs associated with production. It lays out the relationship between inputs used in production and the outputs produced, while also discussing the concepts of total, average, and marginal products, alongside the implications of short-run and long-run production costs. Key concepts such as diminishing marginal returns and returns to scale are also examined.
The Theory of the Firm under Perfect Competition
The chapter delves into the profit maximization behavior of firms operating in a perfectly competitive market. It explores how firms determine their output levels based on market prices, highlighting features such as price-taking behavior, revenue generation, and the firm's supply curve. Additionally, it emphasizes the conditions necessary for achieving maximum profits and describes how various factors affect both individual firm supply curves and the overall market supply curve.
Market Equilibrium
Market equilibrium is achieved when the quantity demanded by consumers equals the quantity supplied by firms, resulting in a stable price and quantity in the market. Understanding the behavior of supply and demand helps in analyzing market shifts, which affect equilibrium price and quantity. The influence of government interventions, like price ceilings and floors, further illustrates the complexities of maintaining market balance.