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    Microeconomic Theory - 2 (2023)

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    Mudassir Hanif
    The document provides an overview of microeconomic theory and the history of economics. It discusses various economic theories from the Greek period to modern knowledge economy theories of the 21st century. It also includes an economic activity flow chart and classifications of different types of goods and services.

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    Microeconomic Theory - 2 (2023)

    Uploaded by

    Mudassir Hanif
    28 views15 pages
    The document provides an overview of microeconomic theory and the history of economics. It discusses various economic theories from the Greek period to modern knowledge economy theories of the 21st century. It also includes an economic activity flow chart and classifications of different types of goods and services.

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    Microeconomic Theory- 2(2023)

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    The document provides an overview of microeconomic theory and the history of economics. It discusses various economic theories from the Greek period to modern knowledge economy theories of the 21st century. It also includes an economic activity flow chart and classifications of different types of goods and services.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    28 views15 pages

    Microeconomic Theory - 2 (2023)

    Uploaded by

    Mudassir Hanif
    The document provides an overview of microeconomic theory and the history of economics. It discusses various economic theories from the Greek period to modern knowledge economy theories of the 21st century. It also includes an economic activity flow chart and classifications of different types of goods and services.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 15

    Microeconomic Theory

    Course Code: EC-501

    Course Teachers
    Prof. Dr. Raza Ali Khan
    History of Economics
    Greek Period Great philosophers Plato and Aristotle wrote “The Republic”

    Romans Cicero and Virgil wrote over economic issues


    Medieval Age A system of Feudalism dominated
    Mercantilism (16th, 17th, and Major trading nations promoted this system
    18th) centuries
    Industrial Revolution (Mid-18th Spoke man Adam Smith
    century)
    Idea of Lassize Faire Economics work best without lot of regulations
    Capitalism Free market, Competition, Private Ownership
    Population Theory Thomas Malthus presented this theory ( Support to Socialism)
    Labor Union JS Mills presented this theory
    Real Wage Theory Minimum wage should be equal to subsistence level (D.
    Ricardo)
    Demand Supply Theory The value of the commodity will set by the market
    Marxism (Karl Marx) Provide support to socialism and Govt. control

    Business Theory (20th Century) Study of economic fluctuations (Keynes)

    Modern Theory (20th Century) Study of Consumption, Production and Distribution


    (Samuelsson )
    Knowledge Economy (21st Information and knowledge have become commodities
    Century)
    Economic Activity Flow Chart
    / Client

    Income Cost
    Maximize Maximize
    Satisfaction Input Mkt Profit

    Land, Labor, Capital

    Household / Client Government Businesses

    Goods & Services


    Maximize
    Finish Good Mkt
    wealth for
    Business
    Expenditure
    Revenue
    Goods and Services

    • Economic goods and services


    • Free goods and services
    • Public goods and services
    • Private goods and services
    • Consumer goods and services
    • Producer goods and services
    • Normal or Superior goods and services
    • Inferior goods and services
    • Substitutes goods and services
    • Complimentary goods and services
    Goods and Services

    Economic goods and services Free goods and services


    • Economic goods have a • A free goods (like air, sea water) where
    degree of scarcity and there is no opportunity cost – but
    therefore an opportunity abundance.
    cost. • Free goods cannot be traded
    • It can be traded in the market
    place and people will be
    willing to pay for them.
    Goods and Services

    Public goods & services Private goods & services


    • Public goods have the The opposite of a public good is
    a private good, which does not
    characteristics of non-
    possess the properties of non
    rivalry and non- rivalry and non excludability.
    excludability.
    A loaf of bread, for example, is
    • Public goods include fresh a private good; its owner can
    air, knowledge, national exclude others from using it,
    security, flood control and once it has been
    system, street lights and consumed, it cannot be used
    law and order.  again.
    Goods and Services

    Consumer goods Producer goods


    Consumer goods are finish Producer goods are
    goods, which directly satisfied intermediate goods, which
    to consumers. These goods are indirectly satisfied to
    directly consumed by the consumers. These goods are
    consumer. used in further production
    process.

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