Download B. Get B. Bachelor of Commerce is an under graduation degree course of 3 years duration for commerce students. Com 1st year Economics Books in pdf format for free. There are two economics papers in B.
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As per. Ranga Sai. Com from June onwards University of Mumbai. Section I. Case studies- Demand forecasting: meaning significance and methods-case studies. Section II. Module V Markets Equilibrium under perfect competition in the long run, Monopoly, Equilibrium in the long run, Monopolistic competition: features, Oligopoly: features, Globalization:.
Case studies. Available for free and private circulation At www. Business Economics Paper I, F. Com w. June Dear Student friends…. During these days of commercialization it becomes very difficult to find information on web which is relevant, authentic as well as free. We believe that knowledge should be free and accessible to all those who need.
With this intention the notes, which are originally intended for the students of Vaze College, Mumbai, are made available to all, without any restrictions. These notes will be useful to all the F. Distance Education students are advised to refer the recommended syllabus. This is neither a text book nor an original work of research. It is simple reading material, complied to help the students readily understand the subject and write the examinations. We no way intend to replace text books or any reference material.
This is purely for academic purposes and do not have any commercial value. Feel free to use and share. We solicit your opinions and suggestions on this endeavor. Module I: Demand analysis. Utility analysis of consumer behavior given by Marshall is based on the cardinal measure of utility. The theory is based on the basic assumption that the utility can be measured.
Accordingly, the theory describes utility as the want satisfying capacity of a good. Such utility is classified as time utility- a good changes form time to time depending on the seasons; place utility- a good changes. Use value is the value of a good in use.
It depends on the want satisfying capacity of the good. Exchange value, on the other hand deals with what a good can get in return in the market. The value paradox states that use value and exchange value are inversely proportional. With increasing use value of good its exchange value decreases. Similarly with increasing exchange value its use value decrease.
This conflict is called as value paradox. Under the utility theory the consumer behavior is explained by the Law of diminishing marginal utility.
The consumer maximizes his satisfaction by equating marginal utilities of all the goods he consumes. This is called the law of equi-marginal utilities. Indifference Curve Analysis. Consumption theory in economics contains two parts. Firstly, the theory studies the consumer behavior and secondly, the theory will suggest the consumer the way in which satisfaction van be maximized.
In utility analysis, the Law of Diminishing marginal utility studies consumer behavior and the law of Equi-marginal utilities suggested a method of maximizing consumer satisfaction. The theory is an improvement over Utility analysis. Utility analysis had a major draw back that it measured utility in cardinal terms. Indifference curve analysis measures utility in ordinal terms.
Further, IC analysis provides wider descriptions and details as compared to utility analysis. IC deals with various combinations of two goods which give the consumer the same amount of satisfaction. Indifference Schedule. All these combinations give the consumer same amount of satisfaction. In this case the consumer will not be able to choose any combination as better than other. The consumer will be indifferent between these combinations. The curve drawn indifference schedule is called the IC.
Hicks use an IC to explain the consumer behavior. ICs can be understood better with the help of its properties. Properties of Indifference curves. Indifference curves towards the axis represent lower satisfaction and IC away from the axis represents higher satisfaction.
In the diagram IC 1 represents lower satisfaction and IC2 represents higher satisfaction. This is because on higher IC the consumption increases and on lower IC consumption decreases. Higher the consumption higher the satisfaction and lower the consumption lower the satisfaction. Indifference curves never touch the axis. By touching the axis the.
In fact an IC should necessarily represent two goods always. Indifference curve is a down ward sloping curve. It slopes down. A consumer has to sacrifice one goods to gain the. This is essential to keep the level of satisfaction constant on an IC. On an indifference curve the marginal rate of substitution decreases. The marginal rate of substitution , is the rate at which a substitutes one commodity with the other.
By gaining one commodity the consumer shall sacrifice the other. This is needed to keep the level of satisfaction constant on an IC. The marginal rate of substitution decreases on an IC. On the diagram it can be seen that. This is because on the upper half the consumer has more of Y so he likes more of X and lower half he has more of X so he likes more of Y.
On an IC the consumer expresses his utility behavior through decreasing Marginal rate of substitution. Comparing the IC analysis and the Utility analysis it can be seen that. An indifference curve is convex to the origin.
Only on a convex curve the marginal rate of substitution decreases. Slope of an IC is found by drawing a tangent. The slope of the tangent is the slope of IC at that point. So it is not an IC. A curve convex to the origin has decreasing slope or decreasing MRS,. Indifference curves need not be parallel.
Converging indifference curves are accepted to be correct. Indifference curves do not intersect. Converging indifference curves are accepted to be correct but they shall not intersect. Intersection of Indifference curves is considered. Combination A gives larger satisfaction, because it is on a higher indifference curve IC1. Combination B gives smaller satisfaction, because it is on a lower indifference curve IC2.
Two indifference curves can not give same satisfaction. This is illogical, inconsistent and irrational. Foundations of Assumptions of Indifference curves:. Indifference curve analysis is based on the following assumptions:. Transitivity : It is assumed that the combinations are continuous to form a curve.
The combinations between two tested sets are given. Ordinality: The indifference curve analysis considers ordinal measure of utility. That is utility is compared but not qualified. Rationality: The consumer is rational. He always prefers higher satisfaction to the lower and he knows all the combinations giving him same satisfaction or different satisfactions.
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