CBSE Class 12 Economics Introduction

Download CBSE Class 12 Economics Introduction in PDF format. All Revision notes for Class 12 Economics have been designed as per the latest syllabus and updated chapters given in your textbook for Economics in Class 12. Our teachers have designed these concept notes for the benefit of Class 12 students. You should use these chapter wise notes for revision on daily basis. These study notes can also be used for learning each chapter and its important and difficult topics or revision just before your exams to help you get better scores in upcoming examinations, You can also use Printable notes for Class 12 Economics for faster revision of difficult topics and get higher rank. After reading these notes also refer to MCQ questions for Class 12 Economics given on studiestoday

Revision Notes for Class 12 Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics

Class 12 Economics students should refer to the following concepts and notes for Part A Microeconomics Chapter 1 Introduction to Micro Economics in Class 12. These exam notes for Class 12 Economics will be very useful for upcoming class tests and examinations and help you to score good marks

Part A Microeconomics Chapter 1 Introduction to Micro Economics Notes Class 12 Economics

PART-A

INTRODUCTORY MICRO ECONOMICS

UNIT 1: INTRODUCTION 

KEY CONCEPTS

1.  MICRO ECONOMICS
2.  ECONOMY
3.  TYPES OF ECONOMY
      • PLANNED ECONOMY
      • MARKET ECONOMY
4.  CENTRAL PROBLEMS OF AN ECONOMY | BASIC ECONOMIC PROBLEMS
      • WHAT TO PRODUCE?
      • HOW TO PRODUCE?
      • FOR WHOM TO PRODUCE?
5.   CAUSES OF AN ECONOMIC PROBLEM
6.   PRODUCTION POSSIBILITY CURVE
7.   MARGINAL OPPORTUNITY COST –MOC
8.   MARGINAL RATE OF TRANSFORMATION
9.   SCARCITY OF RESOURCES
10. OPPORTUNITY COST

1. MICRO ECONOMICS: It is a study of behaviour of individual units of an economy such as individual consumer, producer etc.

2. ECONOMY: An economy is a system by which people get their living.

3. TYPES OF ECONOMY:
      (i) Capitalist economy / Market economy
      (ii) Socialist economy / Planned economy
      
(iii)Mixed economy

4. MARKET ECONOMY: It is an economic system, in which all material means of production are owned and operated by the private with profit motive.

5. PLANNED ECONOMY: In this economy all material means of production are owned by the government or by a centrally planned authority. All important decisions regarding production, exchange and distributions, consumptions of goods and services are made by the government or by a centrally planned authority

6. ECONOMIC PROBLEM: “An economic problem is basically the problem of choice” which arises due to scarcity of resources having alternative uses”.

7. CAUSES OF ECONOMIC PROBLEM :
i) Scarcity of resources
ii) Unlimited wants
iii) Limited resources having alternative uses

8. BASIC (CENTRAL) ECONOMIC PROBLEMS
i) Allocation of resources
a. What to produce?
b. How to produce?
c. For whom to produce
ii). Efficient Utilization of resources
iii.) Growth of resources

9. PRODUCTION POSSIBILITY CURVE (PPC): PP curve shows all the possible combination of two goods that can be produced with the help of available resources and technology.

10. MARGINAL OPPORTUNITY COST: MOC of a particular good along PPC is the amount of other good which is sacrificed for production of additional unit of another good.

11. SCARCITY OF RESOURCES: Scarcity of resources means shortage of resources in relation to their demand.

12. OPPORTUNITY COST: It is the cost of next best alternative foregone.

13. POSITIVE ECONOMICS: Positive economics deals with what is, what was (or) how an economic problem facing the society is actually solved.

14. NORMATIVE ECONOMICS: It deals with what ought to be (or) how an economic problem should be solved. 

Question. What is economics about?
Answer : - Economics is the study of the problem of choice arising out of scarcity of resources having alternative uses.

Question. Define scarcity.
Answer : - Scarcity means shortage of resources in relation to their demand is called scarcity.

Question. What is an economy?
Answer : - An economy is a system by which people get their living.

Question. Define central problem.
Answer : - Central problem is concerned with the problems of choice (or) the problem of resource allocation.

Question. What do you understand by positive economic analysis?
Answer : - It deals with what is (or) how an economic problem facing an economy is solved. It analyses the cause of effect relationship.

Question. What do you understand by normative economic analysis?
Answer : - Normative economic analysis deals with what ought to be (or) how an economic problem should be solved.

Question. Give one reason which gives rise to economic problems?
Answer : - Scarcity of resources which have alternative uses.

Question. Name the three central problems of an economy.
Answer : - i) What to produce?
ii) How to produce?
iii) For whom to produce?

Question. What is opportunity cost?
Answer : - It is the cost of next best alternative foregone.

Question. Why is there a need for economizing of resources?
Answer : - Resources are scarce in comparison to their demand, therefore it is necessary to use resources in the best possible manner without wasting it.

Question. What is production possibility frontier?
Answer :- It is a boundary line which shows the various combinations of two goods which can be produced with the help of given resources and technology.

Question. Why PPC is concave to the origin?
Answer :- PPC is concave to the origin because of increased marginal opportunity cost.

Question. Define marginal rate of transformation.
Answer :- MRT is the ratio of units of one good sacrificed to produce one more unit of other goods. MRT = Δy / Δx

Question. What does a point inside the PPC indicate?
Answer :- Any point inside the production possibility curve indicate underutilization of resources.

Question. What do you mean by the problem of what to produce?
Answer :- It is the problem of choosing which goods and services should be produced in what quantities.

Question. What do you understand by the problem of how to produce?
Answer :- It is the problem of choosing technique of production of goods and services.

Question. What does the problem for whom to produce indicate?
Answer :- The problem of for whom to produce refers to the distribution of goods and services produced in the economy.

Question. Give two examples each of micro economics & macroeconomics.
Answer :- Microeconomics – Individual demand, individual supply
Macroeconomics – Aggregate demand and aggregate supply

Question. What does a rightward shift of PPC indicate?
Answer :- It indicates a) growth of resources b) improvement in technology

Question. What is meant by economising of resources?
Answer :- It means making best use of available resources.

SHORT ANSWER QUESTIONS 

Question. What is production possibility frontier?
Answer :- It is a boundary line which shows that maximum combination of two goods which can be produced with the help of given resources and technology at a given period of time.

Ex: An economy can produce two goods say rice or oil by using all its resources. The different combination of rice and oil are as follows:

CBSE Class 12 Ecomonics - Introduction

Question. Draw a production possibility curve and mark the following situations:
a) underutilization of resources
b) full employment of resources
c) growth of resources

Answer : Every point on PP curve like ABCDEF indicates full employment and efficient uses of resources.
Any point below or inside PP curve like G underutilization of resources.
Any point above PP curves like H indicates growth of resources.

CBSE Class 12 Ecomonics - Introduction

Production Possibility Curve And Opportunity Cost
It refers to a curve which shows the various production possibilities that can be produced with given resources and technology.

Production Possibilities

CBSE Class 12 Ecomonics - Introduction

If the economy devotes all its resources to the production of commodity B, it can produce 15 units but then the production of commodity A will be zero. There can be a number of production possibilities of commodity A & B
If we want to produce more commodity B, we have to reduce the output of commodity A & vice versa.

Shape of PP curve and marginal opportunity cost.
1) PP curve is a downward sloping curve.
In a full employment economy, more of one goods can be obtained only by giving up the production of other goods. It is not possible to increase the production of both of them with the given resources.

2) The shape of the production possibility curve is concave to the origin.
The opportunity cost for a commodity is the amount of other commodity that has been foregone in order to produce the first.
The marginal opportunity cost of a particular good along the PPC is defined as the amount sacrificed of the other good per unit increase in the production of the good in question.

Example: Suppose a doctor having a private clinic in Delhi is earning Rs. 5lakhs annually. There are two other alternatives for him.
1) Joining a Govt. hospital in Bangalore earning Rs. 4 lakhs annually.
2) Opening a clinic in his home town in Mysore and earning 3 lakhs annually.
The opportunity cost will be joining Govt. hospital in Bangalore.
Increasing marginal opportunity cost implies that PPC is concave.

Shift in PP curve
(1) Upward shift
(a) When there is improvement in technology.
(b) Increase in resources. (Image7)

3. Distinguish between a centrally planned economy and a market economy. (Image7)

4. Distinguish between micro economics and macroeconomics. (Image 8)

HOTS

Question. Does massive unemployment shift the PPC to the left?
Answer : Massive unemployment will shift the PPC to the left because labour force remains underutilized. The economy will produce inside the PPC indicating underutilization of resources.

Question. What does the slope of PPC show?
Answer : The slope of PPC indicates the increasing marginal opportunity cost.

Question. From the following PP schedule calculate MRT of good x.
Production possibilities A B C D E
Production of good x units 0 1 2 3 4
Production of good y units 14 13 11 8 4   . (Image 8)

How are fundamental problems solved in the capitalistic economy.
In a market-oriented or capitalist economy, the fundamental problems are solved by the market mechanism. Price is influenced by the market forces of demand and supply. These forces help to decide what, how and for whom to produce.

How are fundamental problems solved in the planned economy?
In a planned economy all the economic decisions regarding what, how and for whom to produce are solved by the state through planning. Economic planning replaces the price mechanism. The market is regulated by the state. The prices of the various products are fixed by the state called administered prices.

Please click the link below to download pdf file for CBSE Class 12 Ecomonics - Introduction.

Part A Microeconomics Chapter 01 Introduction to Micro Economics
CBSE Class 12 Economics Introduction
Part A Microeconomics Chapter 02 Theory of Consumer Behaviour
CBSE Class 12 Economics Consumer Behaviour And Demand Notes
Part A Microeconomics Chapter 03 Production and Costs
CBSE Class 12 Microeconomics Production Possibilities Curve Notes
Part A Microeconomics Chapter 06 Non-Competitive Markets
CBSE Class 12 Economics Forms Of Market And Price Determination Notes
Part B Macroeconomics Chapter 01 Introduction to Macroeconomics
CBSE Class 12 Economics Introduction and Structure of MacroEconomics Notes
Part B Macroeconomics Chapter 03 Money and Banking
CBSE Class 12 Economics Money And Banking Notes
Part B Macroeconomics Chapter 04 Determination of Income and Employment
CBSE Class 12 Economics Determination Of Income And Employment Notes
Part B Macroeconomics Chapter 05 Government Budget and The Economy
CBSE Class 12 Economics Government Budget And The Economy Notes
Part B Macroeconomics Chapter 06 Open Economy Macroeconomics
CBSE Class 12 Economics Bop And Foreign Exchange Rate Notes

More Study Material

CBSE Class 12 Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics Notes

We hope you liked the above notes for topic Part A Microeconomics Chapter 1 Introduction to Micro Economics which has been designed as per the latest syllabus for Class 12 Economics released by CBSE. Students of Class 12 should download and practice the above notes for Class 12 Economics regularly. All revision notes have been designed for Economics by referring to the most important topics which the students should learn to get better marks in examinations. Studiestoday is the best website for Class 12 students to download all latest study material.

Notes for Economics CBSE Class 12 Part A Microeconomics Chapter 1 Introduction to Micro Economics

Our team of expert teachers have referred to the NCERT book for Class 12 Economics to design the Economics Class 12 notes. If you read the concepts and revision notes for one chapter daily, students will get higher marks in Class 12 exams this year. Daily revision of Economics course notes and related study material will help you to have a better understanding of all concepts and also clear all your doubts. You can download all Revision notes for Class 12 Economics also from www.studiestoday.com absolutely free of cost in Pdf format. After reading the notes which have been developed as per the latest books also refer to the NCERT solutions for Class 12 Economics provided by our teachers

Part A Microeconomics Chapter 1 Introduction to Micro Economics Notes for Economics CBSE Class 12

All revision class notes given above for Class 12 Economics have been developed as per the latest curriculum and books issued for the current academic year. The students of Class 12 can rest assured that the best teachers have designed the notes of Economics so that you are able to revise the entire syllabus if you download and read them carefully. We have also provided a lot of MCQ questions for Class 12 Economics in the notes so that you can learn the concepts and also solve questions relating to the topics. All study material for Class 12 Economics students have been given on studiestoday.

Part A Microeconomics Chapter 1 Introduction to Micro Economics CBSE Class 12 Economics Notes

Regular notes reading helps to build a more comprehensive understanding of Part A Microeconomics Chapter 1 Introduction to Micro Economics concepts. notes play a crucial role in understanding Part A Microeconomics Chapter 1 Introduction to Micro Economics in CBSE Class 12. Students can download all the notes, worksheets, assignments, and practice papers of the same chapter in Class 12 Economics in Pdf format. You can print them or read them online on your computer or mobile.

Notes for CBSE Economics Class 12 Part A Microeconomics Chapter 1 Introduction to Micro Economics

CBSE Class 12 Economics latest books have been used for writing the above notes. If you have exams then you should revise all concepts relating to Part A Microeconomics Chapter 1 Introduction to Micro Economics by taking out a print and keeping them with you. We have also provided a lot of Worksheets for Class 12 Economics which you can use to further make yourself stronger in Economics

Where can I download latest CBSE Class 12 Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics notes

You can download notes for Class 12 Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics for latest academic session from StudiesToday.com

Can I download the Notes for Part A Microeconomics Chapter 1 Introduction to Micro Economics Class 12 Economics in Pdf format

Yes, you can click on the link above and download notes PDFs for Class 12 Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics which you can use for daily revision

Are the revision notes available for Part A Microeconomics Chapter 1 Introduction to Micro Economics Class 12 Economics for the latest CBSE academic session

Yes, the notes issued for Class 12 Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics have been made available here for latest CBSE session

How can I download the Part A Microeconomics Chapter 1 Introduction to Micro Economics Class 12 Economics Notes pdf

You can easily access the link above and download the Class 12 Notes for Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics for each topic in Pdf

Is there any charge for the Class 12 Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics notes

There is no charge for the notes for CBSE Class 12 Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics, you can download everything free of charge

Which is the best online platform to find notes for Part A Microeconomics Chapter 1 Introduction to Micro Economics Class 12 Economics

www.studiestoday.com is the best website from which you can download latest notes for Part A Microeconomics Chapter 1 Introduction to Micro Economics Economics Class 12

Where can I find topic-wise notes for Class 12 Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics

Come to StudiesToday.com to get best quality topic wise notes for Class 12 Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics

Can I get latest Part A Microeconomics Chapter 1 Introduction to Micro Economics Class 12 Economics revision notes as per CBSE syllabus

We have provided all notes for each topic of Class 12 Economics Part A Microeconomics Chapter 1 Introduction to Micro Economics as per latest CBSE syllabus