Criticism of Indifference curve & consumer equilibrium

Criticisms of   Indifference curve
 1. Tells nothing new
 2. Not easy to indicate the preference
 3. Complexity
 4. Unrealistic assumption of economic rationality
 5. Limited empirical ( prayog shedha) nature                                                                                                6.   Relation to Transivity ( paribartaneya sambandha)

 
 

Demant / Elasticity of demand

Imp / Use of  Demand Analysis
1. Maximize profit
2. Know consumer's and producers goods
3. Show the relationship between demand and revenue
4. Production decision
5. Financial decision
6. Increase demand
7. Sales forecasting and profit calculation

Determinant of  Demand
1. Change in price
2. Change in income
3. Change in taste
4. Change in price of related goods
5. Size of population
6. Weather and climate
7. Government

Imp / Use of Income elasticity
1. Estimination of  demand for goods the long-run
2. Know the change in business activities
3. Know the market activities

Imp / Use of  Price elasticity
1. Price determination
2. Determination of tax
3. Monopoly price
4. Pricing of factor of production
5. Wage determination
6. Determination of rate of foreign exchange
7. Formulation of economic policies

 Imp / Use of Cross elasticity
1. Know the effect
2. Know the price
3. Know the complementary and substitutes goods
4. Determination of limitation

Types /map of otal outlay method

price             Demand         Total cost        Elasticity of Demand
10                  10                     100
9                    20                     180
8                    30                     240
7                    40                     280            Elasticity of demand Greater than  unity, Eq > 1
6                    50                     300
5                    60                     300            Elasticity of demand Equal to unity, Eq = 1                                  
4                    70                     280                                                                                                               3                    80                     240            Elasticity of demand less than unity, Eq < 1

                                          

Micro n Macro economic use/imp n Types

Use / Imp. of Micro Economics
 1. Price Determination
 2. Formulation of economic policies
 3. Optimum allocation resources
 4. Understand the condition of economies and welfare
 5. International trade

Use / Imp. of Macro Economics
 1. Study of the economy in totally
 2. Formulation of economic policies of the government
 3. Know the situation of the economy
 4. Develop and expand of the micro economics
 5. Know the material welfare of the nation

                                Types of  Macroeconomics

consumption function taple and map

Determinants of consumption function 

 Subjective factor  

 1. Security motives

2. Demonstration effect

3. Desire for improvement

4. Financial prudence(chaturya)

Objective factors

1. Distribution of income

2. Corporate financial policies

3. Consumer's liquid asset

4. Rate of interest

5. Fiscal policy

6.Wage level

7. Future expectations(aapecha)

                                                                        

Paradox fo Thrift

price determination under long-run and short-run