CORONA VIRUS !!! The corona virus case began in Wuhan China since December 2019 AD.Later on it spread to other countries like Korea, America, Italy, Iran, Japan, India including most of the Asian and European countries of the world. WHO named it a Pandemic disease as it appeared in almost all continents of the world. Several countries went in lock down including China, India, Russia, Nepal etc. China and Italy had highest death rate. It was found that, this virus effects the respiratory tract.  The symptoms includes: Running nose, Fever,Shortness of breathe leading to pneumonia The death ..read more

Isocline: •There can be number of possible output levels as shown in figure and least cost combination can be found out for these various output levels. (I have described about Least cost combination in next blog) •A line or curve connecting the least cost combinations of inputs for all output levels is known as isocline. Expansion path: •Of many isoclines, the isoclines which is considered to be the most appropriate over a production period is expansion path or scale line •At any particular time only one expansion path is possible Ridgeline: •Ridgeline represents the points of m ..read more

Least cost Combination (LCC) •There are innumerable possible combination of factors which can be used to produce a particular level of output. •The problem is to find out the combination of inputs which should cost least, a cost minimization problem. •There are three methods to find out the least cost combination of inputs. They are: •Arithmetical Method: •Algebraic Method: •Graphic Method: 1. Arithmetical Method: •One possible way to determine the least cost combination is to compute the cost of all possible combinations of inputs and then select one combination with minimum ..read more

Isocost line •It is also called price line, budget line, iso-outlay line, factor cost line •Isocost line defines all possible combination of two resources which can be purchased with the given outlay of funds Characteristics of Isocost line: •As the outay increases the isocost line moves away from the origin •Isocost line is a straight line because input prices donot change with the quantity purchased •The slope of isocost line represents price ratio. •Where, •Price ratio (x1x2)=Px1/Px2 ..read more

Types of Product-Product relationship (Enterprise relationship) •Farm commodities bear several relationship to one another. These basic product relationship are: 1. Joint products: •Products that are produced through single production process and the production of one without another is not possible. •These products are obtained in fixed proportions. •If a given quantity of one product is produced, the quantity of other products is fixed by nature. • Joint products are produced through a single production function and for the purpose of analysis they may be treated as single product. •All ..read more

Marginal rate of product substitution (MRPS): •MRPS refers to the absolute change in one product associated with a change of one unit in competing product. The quantity of one product to be sacrificed so as to gain another product by one unit in called MRPS. •MRPS= number of units of replaced product/number of units of added product •MRPS Y2Y1= Δy1/Δy2 ..read more

Production possibility curve (PPC): •PPC represents all possible combination of two products the can be produced with the give amount of input •PPC is also known as opportunity curve because it represents all production possibilities or opportunities available with limited resources •It is called iso-resource curve or iso-factor curve because each output combination in this has the same resource requirement •The amount of land used to produce Maize (Y2) depends upon the amount of land used to produce wheat (Y1). •Therefore, Y1=f (Y2).The allocation of land resource between the two products and ..read more

Product-product relationship •Product-product relationship deals with resource allocation among competing enterprises. •The goal of product-product relationship is profit maximization. •Under product-product relationship, inputs are kept constant while products (outputs) are varied. • This relationship guides the producer in deciding ‘what to produce’? •This relationship is explained by principle of product substitution and law of equimarginal returns. •The relationship is concerned with the determination of optimum combination of products. • The choice indicators are Substitution ratio ..read more

Why the indifference curves of complementary goods right angled ? Complementary goods means two goods that have their utility (use) together and if separated they have no utility at all! Take an example of pair of shoes. When they are together (right and left shoes) they have utility but if any one of them is lost, the remaining has no use at all.This was all about complementary goods. Let's check this complementary relationship. Suppose we have, Left leg shoe (x) Right leg shoe (y) Utility 2                              2                          200 Though the utility cannot be meas ..read more

Types of market (On the basis of Competition): A. Perfect and pure competition market Pure competition is said to exist in a market where (a) there is a large number of buyers and sellers (b) products are homogeneous and (c) there is freedom of entry and exit of buyers and sellers.  Characteristics of perfect competition market: 1. Large number of small unorganized sellers and buyers; The industry include large no. of firms (and buyers) , each individual firms supplies only small part of the total quantity offered in the market. Under these conditions each firm alone cannot affect the price in ..read more