[...]... This is what I have tried to do in this book Business is obviously a very applied area Where can the principles of microeconomics be more fruitfully applied than business? Although for business appears in the title, it is not meant only for the students in business It should also be suitable for commerce and economics students On purpose, I have kept the formal mathematical tools of analysis to a... also to apply it to management decision-making process Microeconomics for Business would prove to be immensely useful for management graduates I wish Dr Das writes another volume entitled Macroeconomics for Business as well very soon Dr J K Goyal Director Jagannath Institute of Management Sciences 14 Preface This book is a product of teaching microeconomics to undergraduate students in various universities... sensible choices among alternatives This is the spirit of economics 24 Microeconomics for Business NUMERICAL EXAMPLE 1.1 Mr Rajnish is a software engineer working for Wipro in Bangalore, earning Rs 10 lakh per year There are, say, three alternative careers available for Mr Rajnish He can work for Microsoft or IBM in Bangalore for Rs 9 lakh and Rs 9.5 lakh per year respectively Still another alternative... Curve ● Increasing Marginal Opportunity Cost ● Three Fundamental Problems of Economics: ‘What’, ‘How’ and for Whom’ ● Market Economy versus Command Economy ● Economic Agents ● Positive versus Normative Economics ● Microeconomics ● Macroeconomics ● Business/ Managerial Economics 21 22 Microeconomics for Business WHAT IS ECONOMICS ALL ABOUT? E conomics is usually taught in an ‘arts’ programme in colleges... feature, the book has two chapters, the material of which is largely ignored in any syllabus of elementary microeconomics for business and commerce that I have seen in India and elsewhere One is Chapter 7, ‘Demand for Assets’, which parallels the earlier chapters on demand for goods A student of business or commerce (even an economics student) must know some of the common financial assets offered in... factors of production 34 Microeconomics for Business like labour, land, machines and so on On the other hand, producers supply goods and services and demand factors of production Even in an economy in which there is no interference by the government in business in any manner, the government can play a critical role in the form of protecting property rights This means that, by enforcing laws, the legal... Possibility B Possibility C Possibility D Possibility E Possibility F Lehengas (in crores) 0 2 4 6 8 10 1.5 1.4 1.24 1.00 0.6 0 26 Microeconomics for Business one sector and hence that sector’s output increases, less must be available for other sectors and they will produce less than before If we now plot these possibilities, namely, (0, 1.5), (2, 1.4) and so on and join the line segments, we get a curve as... there is always a vital role for a teacher: to explain things in a classroom even in a simpler manner with more illustrations and supplementary material However, one natural limitation of a book such as that of even Samuelson was that the real-life examples were drawn from the US and other foreign countries, some of which I could not fully relate to 17 18 Microeconomics for Business Over 30 years have... Simply put, managerial /business economics refers to the study of economic principles that are relevant or useful in business and managerial decision-making For instance, any business survives because it is able to sell a product or service to consumers Thus, it is pertinent to know how consumers make their choices regarding how much of different goods and services they should buy Any business involves producing... employees he should use for assembling and how many for attending calls? A natural way is to first determine the various combinations of assembled computers and service call attendance that are feasible Next, he can select a particular combination, depending on profitability of selling computers and attending service calls Let us not be interested in the latter issue, but only in the former For example, if . of business economics for a bachelor’s degree in business and of economics for a bachelor’s degree in commerce, I have not bound Microeconomics for Business 18 SATYADAS_CH_00.qxd. h0" alt="" Microeconomics for Business SATYADAS_FM.qxd 9/13/2007 5:18 PM Page 1 SATYADAS_FM.qxd 9/13/2007 5:18 PM Page 2 Microeconomics for Business Satya