Microeconomic malayalam pdf download

The answer key and detailed explanations emphasize the economic intuition behind the mathematical assumptions and results and, in combination with the textbook, enable students to improve both their theoretical and practical preparation. The collective outcomes of these decisions determine the properties and behaviour of the economy. Consequently, this book provides a detailed account of: i the microeconomics of agents in the economy; and ii the microeconomics of the economy as a whole, using the Arrow Debreu model as the over-arching framework.

It also discusses a number of applications and provides an account of numerous empirical tests of microeconomic theory. The ultimate aim of the book is to fire student interest, enquiry and learning in microeconomics, by providing an integrated, accessible, rigorous, carefully motivated, relevant and empirically referenced account of advanced microeconomics.

Each chapter has a set of open problems to accompany it. These problems are designed to review and illuminate the material covered in the chapter and to stimulate the reader in the direction of making their own contribution to research at the frontiers of microeconomics.

This book takes a concise, example-filled approach to intermediate microeconomic theory. Score: 2. Examines the behavior of economic agents when they come together on market. Provides strategic behavior. Score: 4. Apart from providing students with sufficient study material for examination purpose, it aims at making them understand economics. An effort has been made to explain abstract and complex microeconomic theories in a simple and lucid language without sacrificing analytical sophistication.

The subject matter has been structured in a systematic manner without leaving gaps for the readers to fill in. Though the approach is non-mathematical, simple algebra has been used to give a concrete view of economic concepts and theories and to show the applicability of economic theories in decision making. D levels for students in business schools and economics departments.

It concisely covers major mainstream microeconomic theories today, including neoclassical microeconomics, game theory, information economics, and contract theory. The revamped, 3rd edition of "Microeconomic Theory" offers faculty, graduate and upper undergraduate students with a comprehensive curriculum solution. Insightful graphic presentations help readers visually grasp the connections between the calculus and the algebraic and geometric approach to the same material.

Important Notice: Media content referenced within the product description or the product text may not be available in the ebook version. Publisher : S. The book provides carefully tailored content for undergraduate courses in economics across a range of academic disciplines. Readers can thereby derive for themselves many of the major results achieved in microeconomics.

Introductory notes set the scene for each chapter, and the subsequent sets of problems and annotated reading lists guarantee the reader a thorough grounding in microeconomic theory. In fact, it possibly is true that a theorist, and a microeconomic theorist in particular, does not have any specific products in mind when he bandies his propositions about. Nor does he have to. It employs economic theory in explaining and predicting circumstances. The economic theories are tested against observations and are used to construct models from which prediction are made.

A model on the other hand is a mathematical representation based on the economic theory. Incase of controversies in positive analysis, we refer to economic theories that have been proven through empirical observations. Incase of controversies, individual policy choices will rule. It is concerned with alternative policy actions that help in illuminating and sharpening debates. Example to help distinguish between positive and normative. Positive analysis; what is, what will be Normative analysis: For the firm on whose product has been imposed they would ask; what should they do to improve their sales?

Economics is divided into two main branches:- microeconomics and macroeconomics. These units include consumers, workers, investors, owners of land, business firms, infant, any individual or entity that plays a role in the function of our economy. By studying the behavior and interaction of individual firm and consumers, microeconomics reveal how industries and markets operate and evolve, why they differ from one another, and how they are affected by government policies and global economic conditions.

The reason is that macroeconomics also involves the analysis of markets for goods and services and for labour. Thus macroeconomists have become increasingly concerned with microeconomics foundation of aggregate economic phenomena and much of macroeconomics is actually an extension of microeconomic analysis.

There is a difference between demand and wants, in that demand are human desires that are fully backed by the ability to pay.

On the other hand, wants are human needs that are not backed by ability to pay. Demand Schedule: is a tabular representation of the quantity demand of a good at given price level and at a given point in time. Demand curve on the other hand is a graphical representation of the content of the demand schedule. We can thus say that for normal demand curve, less is demanded at higher prices and more is demanded at low prices. Naturally, consumers will try to substitute the commodity with another cheaper one.

Note also that a fall in price implies a rise in real income, hence the ability to purchase more of the same good.

For instance a consumer may opt to use electricity lighting only, and not for cooking if its prices sky rocket. The vice versa is also true. This applies to poor communities.. If price of rice was to fall, consumers may reduce their demand for rice or consume the same amount of rice and use their extra money saved as a result of fall in price to purchase some more nutritional food.

If price increase of rice, then they would only consume the rice. For such goods, the higher the price, the higher will be the demand. The existence of such goods and factors explain why under exceptional case the demand curve may be positively sloped as below. A movement along a given demand curve is coursed by change in the price of the commodity. An upwards movement is caused by an increase in prices while a downwards movement is caused by a fall in prices. This can be shown as below. Price of Commodity D p2 a p1 b D 0 Q1 Q2 Quantity Demanded A movement from b to a is caused by a rise change in price prom p1 to p 2 and a movement form a to b is caused by a fall in prices from p 2 to p1.

Note: as price falls from p 2 to p1 , quantity demanded rises from Q1 to Q2. A shift of the demand curve is caused by change in other factors influencing demand other than price of the commodity.

The impact of these other factors shall be observed later. A shift to the right shows an increase in demand while a shift to the left shows a decline in demand. A fall in price of one commodity may lower the quantity demanded of good x, the two commodities x and y, are said to be substitutes. When prices of one commodity fall, the household buys more of it and less of commodities that are substitutes for it.

Example: a. Butter and Margarine b. Sukuma wiki and Cabbage c. Beef and Fish If a fall in price of one commodity raises the quantity demanded of another commodity the two are said to be complements. When the price of one commodity falls, more of it is consumed and more of those commodities that are complementary to it are consumed also.

Example, motor cars and petrol, butter and bread etc. So good y, and x, are substitutes. Graph 2: curve slopes downwards, indicating that when the price of a complement falls there is a rise in the quantity of good x demanded.

Goods obeying this rule are called normal goods. In some cases a change in income might leave the quantity demanded completely unaffected. This will be the case with goods for which desire is completely satisfied after a level of income is obtained. Incase of other commodities, rise of income beyond a certain level may lead to a fall in the quantity that the household demand.

If the demand for a commodity falls as income rises, the good is called inferior good. The relation between income and quantity demanded can be shown by the use of Engels curve Income Y 0 Quantity demanded The curve shows the relationship between income and demand, holding other factors constant. Engel curve for normal good slopes upwards, implying that as income rises, quantity demanded will also increase.

Incase of inferior good, if Y increases Q decreases. In this case the Engels curve will slope downwards from left to right.

Inferior good: relates to behavior of quantity demanded in relation to income. For example, in the beauty, would the taste of women have moved towards colored hair products such as pony tail or dyeing of hair.

So the demand of such products would hike. If we hold other factors constant, we expect that an increase in advertisement expenditure will lead to an increase in demand. In this case quantity demanded increases. However, should they expect a fall in price in future they will buy less on the commodity now hoping to buy more in future after the price has fallen.

In this case quantity demanded becomes less. The greater the size of population to satisfy, the greater the quantity consumers will be willing to demand. The fewer the consumer in the market, the less the quantity demanded will be. When we talk of composition of population we are talking of the sex proportion and age group.

Certain commodities are manufactured for certain age group and sex. For instance, cosmetics are meant to be used by women, napkins by infants, shaving cream by men.

So producers consider these factors before deciding how much to produce. Who shall be his market? This relationship between supply and price is called the law of supply.

Supply schedule. Is defined as table showing quantities sellers are willing to put in the market at all possible prices.

This is shown below. It follows therefore that the supply curve for a normal good slopes upwards from left to right. The price of the commodity 2. Objectives of the firm 3. The technology used 4. The cost of production incurred by producers 5. Taxation policies of the government 6. Weather condition 7. Subsidies 8. Price of competing products 9. Peace and stability The price of commodity At higher prices products are motivated to produce more thereby increasing the supply of the commodity under consideration.

At lower prices less is supplied because producers see no reason why they should produce more because profitability will be negatively affected. Objective of the firm A firm can have various objectives. For example profit maximization; to maximize profit will require that more be supplied at higher price. For example, the supply of drugs; supply of drugs may rise depending on the prevailing situation even though prices are low.

Technology used If better methods of production are used, we again expect output to be economically produced and so the supply of the commodity in question will increase.

More can be supplied at some price because per unit cost of production would be lower than in the case where worse methods of production are used. Cost of production Increase in the cost of production will lower quantity supplied because producers will find it very expensive to increase output. However, with low cost of production more is likely to be supplied since the producer will find easy and cheaper ways of producing more of the commodity in question.

Taxation policies of the government The taxation policies of the government also influence quantity supplied because if the government raises taxes, the cost of production goes up thereby reducing quantity supplied. Taxes make commodities be more expensive than competing products e. East African breweries has been urging the government to lower taxes on its products so that they could compete well against the south African Breweries products. Subsidies When the government subsidizes the production of a given good, the supply of that good also increases because the cost of production is reduced by the subsidies given.

Government may decide to incur part of the overall cost of production as a way of motivating production of certain goods which otherwise would have been very expensive to produce. Weather condition This commonly affects agricultural produce. When weather conditions are good, more is produced and hence supplied and vice versa. Such imported products have led to the collapse of many local industries. For example, Mitumba second hand cloths whose prices are much lower than locally produced cloths have led to many textile industries closing down.

And Security 9. Peace Development of infrastructure particularly transport and communication. A movement along a given supply curve is caused by changes in the prices of the commodity. An upward movement is caused by an increase in price while a downward movement is caused by a fall in prices. A shift of the supply curve can either be to the right or left depending on the direction on which a change has taken place.

A case at hand is the one of target workers. The supply curve of labor for target workers is a downward sloping curve showing that at higher wages rates, target workers are willing to work for less hours while at low wage rates target workers are willing to work are willing to work for more hours.

Here At wage rate of sh. He shall be willing to work for 10 hours in order to get sh. When the wage rate is increased to sh. As the wage rate is increased further to sh. This gives us a downwards sloping supply curve of labor. The higher the wage rate, the lesser will be the labor supplied and vice versa. Clearly distinguish between each of the following pairs of concepts. They carry 3 marks each pair. The question carries a total of 30 marks a Market economic system; Command economic system.

Identify with reasons the demand and supply functions. Q Explain the negative intercept of the second function 2 above. It is a situation whereby quantity demanded Qd is equal to quantity supplied Qs i. Excess demand!! That price is known as the equilibrium price. For example at p1 consumers will only be willing to buy 0Q1 from the market while sellers will by willing to supply 0Q2. In this case an excess supply equals to Q1Q2 will be created. Because of this excess supply, sellers will have to reduce the price in an attempt to encourage consumers to buy more.

Prices will be reduced until p e is reached where quantity demanded equals quantity supplied. At p suppliers are willing to e 2 supply only Q because they consider p to be very low. On the other hand, consumers 3 2 will be willing to buy Q4 since very many of them can afford to pay p 2. In this case an excess demand shortage equal to Q3Q4 will be created. Because of shortages, consumers will compete among themselves for the little that is available and because of this competition, prices will be pushed upwards towards p e until eventually p e is reached.

Stable equilibrium 2. Unstable equilibrium 3. Neutral equilibrium Stable equilibrium: if there is a force that disrupts the market equilibrium, then there would be adjustments that bring back to the initial equilibrium. This type of equilibrium is well explained in the previous section. Unstable equilibrium: this occurs when the deviation from the equilibrium position tend to push the market further away from the equilibrium conditions of unstable equilibrium occurs when the demand curve is positively sloped as in the case of a giffen good or when the supply curve is negatively sloped as in the case of labor supply.

Neutral equilibrium:- this occurs when the initial equilibrium is disturbed and the forces of disturbances lead to a new equilibrium point. It may occur due to shift of either demand of supply curve, and through effects of taxes etc. Prices will continue to decline until a new equilibrium price p1 is realized.

Conditions for disequilibrium i Price restriction by government Government from time to time control prices of different commodities through maximum price policies and minimum price policies. Maximum ceiling price policy Here prices are set below equilibrium price because sometimes the equilibrium price might be regarded as being too high for the poor consumers to afford essential commodities.

In an effort to protect poor consumers from exploitation, the government fixes a maximum ceiling price so that commodities that are regarded as essential can be within easy reach of the poor consumer. This can be shown in the diagram below. As a result excess demand represented by Q1Q2 is created since at p1 supplier is willing to supply only Q1 while consumers are willing to buy Q2. However if the ceiling is above p e , say p 2 , it will serve no purpose since the equilibrium pe Qe will still be maintained.

At p 2 there will be excess supply and the producer would be better off reducing the price to p e to reduce wastage as a result of over production. Consequences of maximum price policy 1 Shortages can be created since demand will exceed supply.

Minimum floor price policies Here price are set above the equilibrium price, the reason being that the government might consider the equilibrium price to be a very low to motivate producers to continue production effectively. In order to encourage producers to produce more. The government sets a minimum price. Minimum price are mainly found in the agricultural sector since the agricultural sector often suffers from price fluctuation. Below is a diagram which illustrates the working of minimum price policies.

That is, owing to unfavorable climatic condition, supposing the producer fails to meet his targeted production of S P and instead he realizes only S A. Because of this excess demand shortage the prices will move upwards. The consumers will be willing to pay a price p1 for S A units of output. This is shown as point V p1Q1 along the demand curve. However, this situation of disequilibrium may not be permanent.

Once conditions improve, equilibrium may be attained. That would be in the long run. This could be because of inferior technology that could not allow production to take place on time to avoid shortage. Another reason could be imperfect knowledge about the market conditions. If consumers could have perfect knowledge on alternative sources of product such shortage could not arise. How disequilibrium concept is applied The disequilibrium concept can be applied on the cob- Web model.

In our previous discussion, we said that one cause of disequilibrium is lagged responses. The cobweb model assumes that producers output plans are fulfilled but with a time lag. That is, if a producer is a farmer, he cannot within the short-run increase his output just because the market is offering very good prices.