23 August Economics For Business Ii

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

ECONOMICS FOR BUSINESS

AFTERSCHO☺OL – DEVELOPING CHANGE MAKERS

CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME –

World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship

OPEN FOR ALL FREE FOR ALL


ECONOMICS FOR BUSINESS

Dr. T.K. Jain.

AFTERSCHO☺OLCentre for social entrepreneurship

Bikaner

M: 9414430763

[email protected]

www.afterschool.tk

www.afterschoool.tk


WHAT IS DISINVESTMENT?

When the government sells the equity in PSUs, it is called disinvestment. The government may sell them together or in parts.


What is PSU?

Public Sector Undertaking.


What is SME?

Small and Medium Enterprises


What is structural unemployment?

When the unemployment is due to structural changes in the economy, it is called structual unemployment. (for exmple, when economy transforms from agricultural to industrial economy).


What is NPE?

National Policy of Education – declared in 1986.


What is TLC?

Total Literacy Campaign.


What is NLM?

National Literacy Mission.


What is SSA?

Sarva Shiksha Abhiyan (education for all).


What is GER?

Gross Employment Ratio


What is AIE?

Alternative Innovative Education.


What is EGS?

Education Guarantee Scheme.


What is Drop Out?

When a student leaves school (stops education), it is called drop out.


What is VSAT?

Very small aperture terminals.


What is TRAI?

Telecom Regulatory Authority of India.


What is IRDA?

Insurance Regulatory and Development Authority.


What is deflation and how is it different from inflation?

In deflation the prices are falling, but in inflation the prices increase.

In deflation, the purchasing power of currency will increase, but in inflation the purchasing power of currency will decrease.


What do you understand from fiscal measures?

All those measures, through with the government collects revenue, charges taxes and spends money for welfare of people are called fiscal measures, it includes budget and related processes.


What is APM?

Administered Price Mechanism (under this the government controls the

prices of petrol, diesel and other essential products).


What is deficit financing?

When the government runs budget in loss, and uses deficit to develop the country, it is called deficit financing. The government of India always adopts deficit financing. (revenue is 100, but expeses are 130, then 30 is deficit).


What is FRBM?

Fiscal Responsibility and Budget Management Act 2000 (it puts a pressure on government to reduce deficit financing).


What are part of capital account transactions?

It includes portfolio investments, Loans, FDI etc. (long term investments are included in it).


What is FDI?

Foreign Direct Investment (direct investment by FII and external bodies in Indian companies).


What is FII?

Foreign Institutional Investor.


What is portfolio Investment?

Investment in stock markets, capital markets, , is generally called portfolio investment – the purpose is to achieve balanced return over a period of time.


What is BOP?

Balance of Payment. (it is always balanced). It is different from Balance of Trade. Balance trade is balance of export and import only, but BOP includes all types of transactions including tourisms, remittances, balance of trade etc.


What is OCB?

Overseas Corporate Bodies.


What is NRI?

Non Resident Indian


What is SEZ?

Special Economic Zone


What is NPA?

Non Performing Asset (when the bank loans are outstanding for a long time, they are called NPA – just like Bad Debts).


What is UDC?

Underdeveloped countries. (like Pakistan, Bangladesh etc.).


What is MTA?

Multilateral trade agreements (between various governments in international trade).


What is M1,M2,M3,M4?

M1:currency with public +demand deposits

M2: M1+post office savings deposits

M3: M1+all types of deposits with banks

M4: M3+ all post office savings.

M3 is called broad money.


What is PLF?

Plant Load Factor. (it relates to the overall plant load and its

utilisation in energy sector).


What is chronic unemployment?

When there is again and again unemployment due to some big problems in the economy, it is called chronic unemployment.


What is cyclic unemployment?

When unemployment rotates over a period of time again and again – it is called cyclical unemployment, it is similar to seasonal unemployment.

Seasonal unemployment may be due to seasonal industries, but cyclical unemployment is due to business cycles.


What is disguised unemployment?

Underutilisation of people is called disguised unemployment. When one person can manage a farm house, but 4 are working on it, there is disguised unemployment of 3 of them.


Who calls economics as science of wealth?

Adam Smith

And J.B. Say.


Who says: Economics is a science which studies human behaviour as a relationship between ends and scarce means, which have alternate uses.”

Robbins


What is micro economics?

Study of individiual firm or individual in different decision making situations involving scarce resources.


What is Macro economics?

Macro means collectives, thus Study of groups of individiual firm or nations in different decision making situations involving scarce resources.


Who said: “Economics is the study of manking in the ordinary business of life, it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisite and well being.”

Alfred Marshall


Who said : “the range of our inquiry becomes restricted to that part of social welfare that can be brought directly or indirectly into relation with the measuring rod of money.”

PIGOU


GIVE AN EXAMPLE OF POSITIVE SCIENCE?

Positive science is concerned with pure cause and effect relation – for example the law of gravitation.


Give an example of Normative Science?

It gives you the ideal, what should be done and why - example - morals, ethics, social sciences etc.


“Because every human being is a mortal, therefore Ram is also mortal.” – what kind of logic is it – inductive or deductive?

Inductive


“Because Ram died, Mohan died, Sudama died, therefore every human being is mortal” – what kind of logic is it – inductive or deductive?

Deductive


What are the four central economic problems?

What to produce How to produce For whom to produce What provisions are to be made for

economic growth


Who said: “Economics is neutral between ends.”

Robbins


Which of these is a micro problem?

A. Savings rate in India

B. Unemployment in India

C. M3

D. Pricing decision at Bikaji.

Answer: D


What is M3?

Broad Money


Give examples of some conspicuous goods?

Conspicuous goods are those, where consumers think that higher price means better goods.

Diamond Jewellery MBA programme.


Give examples of Giffin Goods?

The goods which are considered to be inferior to other goods.

Bajra, Jwar etc.


What is utility?

It is the want satisfying power of a commodity.


Which are the 2 approaches towards utility?

Cardinal and Ordinal.


Which approach towards utility says that utility can be measured?

Cardinal


Which Which approach towards utility says that utility cant be measured, but it can be shown as hierarchy or order?

ORDINAL


What are the assumptions of indifference curve analysis ?

1. Consumer is rational

2. Consumer is capable of ranking different commodities

3. If A is preferred to B, and B is preferred to C, A must be preferred to C.


Can indifference curve intersect each others?

Never


Can indifference curve take concave shape?

Never


Can indifference curve take convex shape?

Yes – always


Can a budget line cut many indifference curve?

Yes – infinite.


Name the two mundamental laws, that shape the utility theory?

1. Law of diminishing marginal utility

2. Law of equi marginal utility


Why is indifference curve approach better than utility theory?

It studies more than one commodity at a time

It does not require the assumption of constancy of money.

It doesn’t require the assumption that money can be measured.


What is the most important determinant of supply?

Price of the goods in the market (other determinants are technology, price

of related goods, prices of factors of production, govt. polity etc.).


Who says that production power of land is indestructible?

Ricardo


What is capital formation?

Sustained increase in stock of real capital in a country.


Is entrepreneur also a factor of production?

Yes, besides land, labour, capital.


What are the functions of an entrepreneur?

To take risk To innovate (do something new). Initiate (start a business or some

activity). Coordinate resources More benefits with less resources.


What is economic non-sense or economic absurdity?

Stage 1 and state 3 of law of variable prodportion are called economic non-sense as no producer will produce at that level. Every producer would like to be at stage 2. (the first state is law of increasing return, the third stage is law of decreasing returns).


If I employ labour, my production is as under:

Labour production 2 10 5 35 15 105 20 120 25 120 Where do you have stage 1,2,3. ?


Solution . . .

We have 1st stage till 5 units of labour, we have 2nd stage from 5 to 15 units of labour, we have 3rd stage from 15 to 25 units of labour. The 2nd stage is giving us maximum marginal and average production, so we shall stay in this stage.


What is the difference between law of returns (law of variable proportion) and returns to scale?

Law of returns is related to short term but returns to scale are related to long term.

Law of returns assume only one variable resource (labour). But Returns to scale assumes that all factors of production are variable. (because in long run every factor of production become variable).


Which are fixed costs?

Those costs which do not change with change in volume of production are called fixed costs

Examples: rent, salaries, etc.


What are variable costs?

Those costs which change with change in volume of production are called variable costs

Example: wages, power, carriage inward, etc.


Where will MC curve cut AVC and ATC?

At their bottom. (always). MC = marginal cost curve AVC = average variable cost curve ATC = average total cost curve.


What is long run?

The time in which a firm can change all its factors of production.


What is relation of long run cost curve to short run cost curve?

LAC (long run average curve) is combination of infinte SAC (short run average cost curves). LAC is combination of all the lower points of SACs. It is a lower umbrella of SACs.


Do we have similar products in perfect market?

Yes – homonogenous products.


If the marginal revenue is more than marginal cost, what should the firm do?

The firm should increase production and continue to increase production so long as MR = MC. (the point of equilibrium).


If the income of people increases, the demand curve should shift in which direction?

Upward or rightward.


What will happen at the point, where budget line touches highest indifference curve?

Consumer’s equilibrium


ABOUT AFTERSCHOOOL Afterschoool conducts three year integrated PGPSE (after

class 12th along with IAS / CA / CS) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM. This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society.


Why such a programme?

To promote people to take up entrepreneurship and help develop the society

To enable people to take up franchising and other such options to start a business / social development project

To enable people to take up social development as their mission

To enable people to promote spirituality and positive thinking in the world


Who are our supporters?

Afterschoolians, our past beneficiaries, entrepreneurs and social entrepreneurs are supporting us.

You can also support us – not necessarily by money – but by being promotor of our concept and our ideas.


About AFTERSCHOOOL PGPSE – the best programme for developing great entrepreneurs

Most flexible, adaptive but rigorous programme Available in distance learning mode Case study focused- latest cases Industry oriented practical curriculum Designed to make you entrepreneurs – not just

an employee Option to take up part time job – so earn while

you learn The only absolutely free course on internet


Workshops from AFTERSCHOOOL IIF, Delhi CIPS, Jaipur ICSI Hyderabad Branch Gyan Vihar, Jaipur Apex Institute of Management, Jaipur Aravali Institute of Management, Jodhpur Xavier Institute of Management,

Bhubaneshwar Pacific Institute, Udaipur Engineering College, Hyderabad


Flexible Specialisations: Spiritualising business and society Rural development and transformation HRD and Education, Social Development NGO and voluntary work Investment analysis,microfinance and inclusion Retail sector, BPO, KPO Accounting & Information system (with CA / CS /CMA) Hospital management and Health care Hospitality sector and culture and heritage Other sectors of high growth, high technology and social

relevance


Salient features: The only programme of its kind (in the whole world) No publicity and low profile course For those who want to achieve success in life – not just a degree Indepth knowledge and expertise Professional approac: World class approach Strong intellectual and business capabilities Flexible – you may stay for a month and continue the rest of the

education by distance mode. / you may attend weekend classes Scholarships for those from poor economic background Latest and constantly changing curriculum – keeping pace with

the time Placement for those who are interested Admissions open throughout the year Latest and most advanced technologies, books and study material


Components Pedagogy curriculum and approach based on IIM Ahmedabad and ISB

Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad) Meditation, spiritualisation, and self development Essential softwares for business Business plan, Research projects Participation in conferences / seminars Workshops on leadership, team building etc. Written submissions of research projects/articles / papers Interview of entrepreneurs, writing biographies of entrepreneurs Editing of journals / newsletters Consultancy / research projects Assignments, communication skill workshops Participation in conferences and seminars Group discussions, mock interviews, self development diaryng Mind Power Training & writing workshop (by Dr. T.K.Jain)


Pedagogy Case analysis, Articles from Harvard Business Review Quiz, seminars, workshops, games, Visits to entrepreneurs and industrial visits Presentations, Latest audio-visuals Group discussions and group projects Periodic self assessment Mentoring and counselling Study exchange programme (with institutions out of India) Rural development / Social welfare projects


Branches

AFTERSCHOOOL will shortly open its branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs.


Case Studies

We want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.


Basic values at afterschoool Share to learn more Interact to develop yourself Fear is your worst enemy Make mistakes to learn Study & discuss in a group Criticism is the healthy route to mutual support

and help Ask fundamental questions : why, when, how &

where? Embrace change – and compete with yourself

only


www.afterschoool.tk social entrepreneurship for better society

23 August Economics For Business Ii

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