Study of Economics in Nepal

Eco. 30.. (Economics) (Examination 20..) (Grade): XI (Time) : 3 Hrs.                                                                                                       (Full Marks): 75 (The candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks .)

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

1. If autonomous demand is 12 and slope of demand curve is 2. Find the demand function.

CONCEPT OF ECONOMIC GROWTH & DEVELOPMENT Concept of Economic Growth Economic growth is defined as the sustained annual increase in productive capacity of an economy over time. It is quantitative term as it represents quantitative increase in the final output (GDP, GNP, NNP, PCI) of goods and services in an economy over time.  It can be measured in both nominal and real values. Traditionally, aggregate economic growth is measured in terms of gross national product (GNP) or gross domestic product (GDP). World Bank uses GNP as indicators of measuring economic growth. However, GDP is considered as one best measuring indicators of economic growth.

Introduction In the old days, human life was not as complex as it is today. People were self-dependent because there were a few basic needs to satisfy such as food, clothes, and shelter. With the passage of time and modernization, human wants multiplied.  As a result, self-sufficiency came to an end and the process of exchange started, under which people exchanged their commodities for other required commodities. This system is called barter system and the economy is called barter economy. After a long time, because of various difficulties of barter system, money emerged as a medium to make exchange easy or avoid the difficulties of barter system.

Introduction to Factors of Production Production is creation of utility and value of goods and services. Technically it is the process of transforming input into output. For example: processing of wheat into flour, converting wood into chair etc. In both of these examples, making flour and chair creates utility. Their value is also higher than wheat and wood respectively.

Introduction to Economics Economics has been taken as a most important knowledge in human life from the very beginning of human civilization. The thoughts on economics found in different eastern and western philosophies, Greek and Hindu literatures, etc. prove this fact. The term Economics has been derived from the ancient Greek word "Oeconomicus" which in economics is related to the study of household management or rules of household. Thus, economics means to manage household affairs with limited fund available in the most economic manner possible. Indeed, each individual household's success or betterment depends mainly on its ability to make wise economic decisions while being involved in different economic activities. 

Eco 304         Credit Hours: 5                                                                              Teaching Hours: 160 Course Contents

Exercise - National Income Accounting

 Concept of National Income Accounting The national income accounting was first introduced in England in 1676. It was based on the book "Political Arithmetic" written by William Petty. It was continuously developed in  18 th and 19 th  century. By   20 th  century, it was properly developed. After the Second World War "Simon Kuznets" developed national income systematically. National income accounting is defined as the method or technique used in construction of national income accounts. 

   Exercise - Basic Concept of Macroeconomics

 Concept of Macroeconomics In the past day, the whole economic concept was taken as a single theory. But, in the modern period of time, it has been divided into two parts: microeconomics and macroeconomics.  These two concepts of economics were first introduced by Ragnar Frisch in 1933 A.D. After the publication of The General Theory of Employment, Interest and Money published by J. M. Keynes in 1936 A. D., the application of macroeconomics had been taken in the history of economics. 

Concept of Production Technological transformation of input (factor input: land labor, capital, organization & non-factor input: water, electricity, raw materials) into output (finished goods & services) is known as production. In other words, production is the process of making goods to satisfy human wants. Production is also relating to the process of creating or improving utility or creation of exchange value. 

  Exercise - Theory of Consumer Behavior

  Introduction Consumer:   A consumer is a person who purchases goods and services for the satisfaction of wants. Aim of the consumer:   To obtain maximum satisfaction of wants from spending limited money income on various goods and services.

Exercise - Elasticity and Its Measurement

Supply and Supply Function Supply Supply is the quantity of goods and services produced by a producer, which are ready for trade in the market at a fixed price and on time.  While demand in the market is affecting production and supply, supply also affects demand. As the demand for the product increases, so does the price increase, which has a positive effect on the producer's profit and motivates for more production and supply. Therefore, price increase means increase in supply. The change in price and the change in supply are directly proportional to each other. Which is explained by the law of supply. i.e Qsx = f(Px) = α+βPx

Demand Concept of Demand Demand is defined as the effective desire for a good or service backed by ability and willingness to pay. It is also defined as the quantity of a good or service which a consumer would buy in a market at a given price and time period.   Demand Function The demand for a particular commodity is influenced by so many factors-they together are known as determinants of demand in technical jargon. A demand function in mathematical term expresses functional relationship between the demand for a product and its various determining factors. For instance,  Qdx = f(Px, Py, Y, Adv, T&P, F, Cl, Pop, Gp, Exp., Dist. ......) Types of Demand Function 1. Short Run Demand Function: Qdx = f(Px) ...........OTRS 2. Long Run Demand Function: Qdx = f(Px, Py,  Y, Adv, T&P, F, Cl, Pop, Gp, Exp., Dist., ......) 3. Linear Demand Function: The slope of the demand curve remains constant throughout its length is known as LDF. In other words, if both independent...

Concept & Types of Elasticity Demand Concept of ED Elasticity of demand refers to the degree of responsiveness in demand for a commodity to the change in any of its determinants. In other words %Δ in Qdx divided by the %Δ in its determinants. First introduced by classical economist A. A. Cournot & J. S. Mill and later on Neo-classical economist, Alfred Marshall developed it in the scientific way in his book "Principle of Economics" published in 1890 A.D.  Symbolically,  Ed  =  % Δ  in Qd / % Δ  in its determinants Price Elasticity of Demand (PED) Ep means how strongly do consumer react (by using less) if you raise your product price. So, Ep is the reaction of quantity on price. Symbolically, Price Elasticity of Demand Degrees/Types of PED 1] Perfectly Elastic Demand  Perfectly Elastic Price Elasticity of Demand 2] Perfectly Inelastic Demand Perfectly Inelastic Price Elasticity of Demand 3] Unitary Elastic Demand...