Study of Economics in Nepal

Write Short Notes On                                                                      Subject matter of economics Goods and services Normal goods and Giffen goods Inferior goods Complementary and substitute goods with suitable example Economic goods

Concept and Types of Cost Concept of Cost of Production Cost is related to the financial aspect of production that paid to the services of resources of production (inputs) on the basis of their marginal productivity. Cost of production refers to all the expenditure of a firm on the factor's inputs (L d , L b , C, org.) as well as non-factor inputs (raw material, fuel, electricity, depreciation, advertisement, insurance, tax, travelling & transportation) for the production of a commodity in terms of wages, salary, interest, profit, rent, prices for non-factor inputs.

  Very Short Questions 1.      What are the main causes of economic problem? 2.      Why the problems of scarcity arise? 3.      What factors lead to the divergence of market prices from natural prices? 4.      If there is no scarcity of resources, then economics will be ceased to exist. Do you agree with the statement? 5.      What is the difference between shortage and scarcity? 6.      State true or false and justify your answer: shortages are man-made. 7.      How do you solve the economic problem? 8.      What do you mean by scarcity of resources? 9.      Suppose the market is defined by Demand: Q = 154 – 2P , Supply: Q = 2 + 2P at a price of P = 16, what is the size of the shortage that will exist in the market? 10.   Load-shedding is the outcome of shortage of hydroelectricity. Do you agree? 11.   What is opportunity cost? 12.   Give any example of opportunity cost. 13.   What term describes the value of resources if used in their next best available us

  1.1 Concepts of Scarcity and Choice  Scarcity means shortage. Every society has limited economic resources like land, capital, labor and entrepreneurship, which are required for the production of goods and services. Thus, every society can produce only limited goods and services. But human wants are unlimited. As soon as one want is fulfilled, another want immediately appears. It never ends. It is not possible to satisfy all wants with limited means.   Human beings are confronted with the problem of making choices, which wants are to be fulfilled, and what means are to be allocated among the competing wants. To solve the problem of unlimited wants and limited means, people have to make choice and it is the central problem of every society.   If economic means are free and unlimited, there would not be problems. People need not worry about budgeting their income.