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ECONOMICS

CROSS ELASTICITY OF DEMAND

It is the degree of responsiveness of demand for one commodity as a result of a change in the price of another. It is the measure of effect of a ...
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INCOME ELASTICITY OF DEMAND

"It is the degree of responsiveness of demand for goods to a change in income". It is the extent to which demand changes as a result of increase or decrease ...
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MEASURING PRICE ELASTICITY

If elasticity is zero, demand curve is perfectly inelastic. If elasticity is infinite, demand curve is perfectly elastic. And if elasticity is unitary, demand curve gently slopes downwards. If demand ...
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ELASTICITY OF DEMAND

Introduction It is necessary to review or recall (repeat) the relationship between demand and price. "Demand has inverse relationship with price". That is, a rise in price causes a fall ...
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INDEX

Index is a system that shows level of variable (item) especially price, cost, wages, etc so that they could be compared with previous date. Index Number It is a number ...
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QUANTITY THEORY OF MONEY

It is a theory that shows direct relationship between money supply and the price level. It is a theory that shows that the general price level is proportional to money ...
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VALUE OF MONEY AND PRICE LEVEL

Value of money  "It is the quantity of goods and services a unit of money can buy in a given period". In other words, the value of money refers to ...
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INDIFFERENCE CURVE CONCEPT

It is a curve that shows various possible combinations of two goods in which a consumer is indifferent. It is a curve that indicates all possible combinations of two goods ...
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LAW OF DIMINISHING MARGINAL UTILITY

The law of diminishing marginal utility is based on the following consideration or assumption: "As the amount of a commodity a person possesses or consumes increases, the utility a consumer ...
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CONCEPTS OF UTILITY

They include the following:- Total Utility. Average Utility. Marginal Utility. 1) Total Utility It is the total amount of utility which a consumer derives (obtains or gets) from consuming many ...
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