Elements of Economics

    - Advertisement -

    Economics is the science which studies human behaviour and aims at meeting maximum objectives with the help of limited resources. It is the art and science which deals with the economic problems of the people living in a society.

    Economics, as applied to industrial undertaking has two main divisions:

    1. Micro Economics
    2. Macro Economics

    Microeconomics can be defined as, “the branch of economics where the unit of study is a firm or an individual.” It is the main concept and a numerical tool for economics concerning industries. The Micro-Economics deals with smaller units of the economy like the behaviour of the individual customer, plant, or industrial undertaking.

    Macro Economics deals with the whole economy and studies the growth of national income and the economic environment as a whole. It plays an important role in forecasting and other factors relating to marketing.

    Economics is a subject of interest to the engineers, as they are to deal with the economic problems related to increasing the production, reducing the efforts, increasing the wealth, improving the living standard, reduction in the cost of products etc.

    - Advertisement -

    Must Read: Elements of the State


    Income  (personal) is defined as those incomings which are in the form of money or payment in kind. Whereas income from the business is found by deducting the outgoings (expenditure on material, labour and other overheads etc.) from gross income. Income can be derived either from personal services or from the property.

    National income is either

    (i) the money value of all goods and services produced during a particular period, generally one year, or

    (ii) the sum of all personal incomes derived from economic activity during this time.

    Must Read: National Income of India


    In business, investment is made on:

    1. Land and buildings
    2. Procurement of raw materials, tools, instruments etc.
    3. Purchase and installation of machinery
    4. Internal services like material handling devices, transport vehicles, light, water, gas, power etc.
    5. Administrative and selling services.
    6. Works related to productivity improvement, cost-reduction etc.
    7. Payment of wages to the employees.
    8. Other works related to running the business and its development.

    You May Also Love to Read: A Company – Definition, Features, Types and Companies Act


    Reserves for working capital are very necessary for sound financial management. It ensures stability and financial soundness of enterprise. This helps, to cover credit, losses, to liquidate debts, to expand, for replacement of machinery, for taxes, to meet contingencies like fire, theft, strikes etc.

    Reserves are of two types, namely revenue reserves and capital reserves. Revenue reserves are required to meet future commitments such as distribution of dividends, research and developments etc. Whereas capital reserves are made for increasing the capital.

    Don’t Miss: Stock Exchange – An Organized Market for Purchase and Sale

    Some more Important Elements of Economics are:

    • Assets
    • Liabilities
    • Utility
    • Market
    • Money
    • Trade Cycle
    • Profit
    • Price
    • Cost
    • Value
    • Want
    • Demand

    Read Also: Special Economic Zone (SEZs)

    - Advertisement -

    Recent Articles

    Current Affairs Daily

    Today's Current Affairs and General Knowledge Current Affairs Daily Digest is a collection of important current...

    Bombay Stock Exchange (BSE) of India

    The oldest stock market in Asia, BSE stands for Bombay Stock Exchange and was initially known as "The Native Share and Shock Brokers Association"....

    Transportation in India: India transport sector

    India’s Transport Sector, as it caters to the need of nearly 1.1 billion people, is large and diverse. A smooth and co-ordinated...

    Biography of Mahatma Gandhi – A Journey from Mohandas to Mahatma

    On the evening of 30th January, 1948, at his daily prayer meeting Gandhiji was shot dead by a young man from Pune named Nathuram...

    Early Entrepreneurs of India

    The first cotton mill in Bombay came up in 1854 and it went into production two years later. By 1862, four...

    Related Stories

    1 Comment

    1. Hi, My name is Ankit and I am one of the creators of the spa salon theme. It feels great to see users running the theme in production environment.

      Best of luck with for your blog.


    Comments are closed.

    Stay on op - Ge the daily news in your inbox