Globalisation of under developed countries will
(i) Improve the efficiency of resources.
(ii) Reduce the capital output ratio.
(iii) Increase labour productivity.
(iv) Help to develop the export spheres and export culture.
(v) Increase the inflow of capital and updated technology into the country.

According to Joan Robinson, "It prevails when the demand for the output of each producer is perfectly elastic".

According to Wages fund theory, "wages depend upon the proportion between population and capital". The term' capital in the context refers to the fund set apart for payment of wages And the word 'population' refers to workers. If the supply of workers increases wages will fall and vice versa.

The various types of Internal Economies of scale are
(a) Technical Economies
(b) Financial Economies
(c) Managerial Economies
(d) Labour Economies
(e) Marketing Economies
(f) Economies of survival

There has been a rapid growth of urban areas in India after Independence. Improved connectivity in transport and communication, education and health have speeded up the pace of urbanization.

Environmental economics which analyses the inter relationship between economy and environment. It is a study of inter disciplinary tools for the problems of ecology, economy and environment.

MS word is a word processor, which helps to create, edit, print and save documents for future retrieval and reference.

(i) Rural roads constitute the very lifeline of rural economy.
(ii) To get the benefits of well - constructed road network is rural areas are called rural transport

(i) Liberalization was needed because the various licensing policies were preventing economic growth.
(ii) Since the private sector was not given enough opportunities to earn more money privatization was done.
(iii) Globalization was needed because today a developed country
can grow without the help of the underdeveloped countries.

Payment made to others for the purchase of factors of production is known as explicit cost. It is also called accounting cost or out of pocket cost.

(a) Liberalisation was necessitated because various licensing policies were said to be deterring the growth of the economy. 
(b) Privatisation was necessitated because of the belief that the private sector was not given enough opportunities to earn more money.
(c) Globalisation was necessitated because today a developed country can grow without the help of the under developed countries. Natural and human resources of the developing countries are exploited by the developed countries and the developing economies are used as market for the finished goods of the developed countries. The surplus capital of the developed countries are invested in backward economies absolute and outdated technologies of the developed countries can be easily sold to poor under developed countries. Ultimately, the rich countries can grow further at the cost of developing economies.

i. There is consumer sovereignty in a perfect competitive market. The consumer has perfect knowledge about the market conditions.
ii. The price is equal to the minimum average cost which is beneficial to the consumer.
iii. The firms are price-takers and the products are homogeneous.

(i) Indifference curve must have a negative slope.
(ii) Indifference curves are convex to the origin.
(iii) Indifference curve cannot intersect
(iv) Indifference curve do not touch the horizontal or vertical axis

(i) The period of merchant capital was from 1757 to 1813.
(ii) The only aim of the East India Company was to earn profit by establishing monopoly trade in goods with India and East Indies.
(iii) When Bengal and South India came under the political shake of the East India Company in 1750s and 1760s, the objective of monopoly trade was fulfilled.
(iv) The company generated huge surpluses which were sent to England.
(v) The officers of the company were unscrupulous and corrupt.

Internal Economies of Scale	External Economies of Scale
Expansion of the firm itself	Expansion of the industry
Lower long run average cost	Benefits most all firms
Range of economies e.g. Technical and Financial	Helps to explain the rapid growth of many cities.

(i) The distribution of land is highly skewed in rural areas. Majority of rural people work as hired labour to support their families.
(ii) Lack of non-farm employment: The excess supply of labour in rural areas reduce the wages and increases the incidence of poverty
(iii) Lack of public sector investment: The root cause of rural poverty in our  country is lack of public sector investment on human resource development.
(iv) Inflation: Steady increase in prices affects the purchasing power of the rural poor leading to rural poverty.
(v) Low Productivity: Low Productivity of rural labour and farm activities is a cause and effect of poverty.
(vi) Unequal benefit of growth: The gaîns of economic development are enjoyed by the urban rich people leading to concentration of wealth. Due to defective economic structure and policies, the gains of growth are not reaching the poor.
(vii) Low rate of economic growth: The rate of growth of India is always below the target and it has benefited the rich. The poor are always denied of the benefits of growth.
(viii) More emphasis on large industries: Huge investment in large industries catering to the needs of middle and upper classes in urban areas. Such industries are capital intensive and so do not create more jobs. The poor are not in a position to get employment or to come out of social evils. Social evils like customs, beliefs increase unproductive expenditure.

(i) Tamil Nadu has mining projects based on Titanium, Lignite, Magnesite, Graphite, Limestone, Granite & Bauxite.
(ii) Due to the Neyveli Lignite Corporation the area around Neyveli in Cuddalore district has developed.
(iii) There are thermal power plants, fertilizer & carbonisation plants. Magnesite mining is done at Salem, Bauxite at Yercaud, Iron ore at Kanjamalai.
(iv) Molybdenum is found in Karadikuttam in Madurai district.

(i) According to Hawley profit is the reward for risk taking in business.
(ii) Every business involves some risks. Since the entrepreneur undertakes the risks, he receives profit.
(iii) If the entrepreneur does not receive the reward, he will not be prepared to undertake the risks
(iv) Thus higher the risks, the greater are the profit.
(v) Every entrepreneur produces goods in anticipation of demand.
(vi) If his anticipation of demand is correct, then there will be profit.
(vii) It is the profit that induces the entrepreneur to undertake such risks.

S.No	Explicit cost	Implicit cost
1	Payment made to others for buying factors of production.	Payment made for the use of firm's own resource.
2	Actual expenditure of the firm in buying or hiring the inputs.	Cost of firm's self owned, self employed resources.
3	(eg) wages, rent, advertisement, depreciation.	Costs are not recorded as no cash payment takes place.
4	Also called accounting cost, out of pocket cost money cost.	Value of the own services are imputed and considered for preparing profit loss accounts. Also called imputed cost.

In 1918, Ambedkar published a paper "Small Holdings in India and their Remedies", citing Adam Smith's "Wealth of Nations", he differentiated "Consolidation of Holdings" and "Enlargement of Holdings".

The Nobel citation refers to Sen's contributions to social choice theory, development economics; study on poverty and famines and concept of entitlements and capability development (1998).
(i) Poverty and Famines-Sen's Poverty and Famines: An Essay on Entitlement and Deprivation" (1981) is both a theoretical and an applied work. In the book, several famines have been studied in the working of a general theoretical framework from an original angle. He examined various meanings. of poverty and drew attention to the incidence of absolute and relative deprivation.
(ii) Poverty and Inequality: Sen has carried out massive work on poverty and inequality in India. Sen's major point has been that the distribution of income/consumption among the persons below the poverty line is to be taken into account.
(iii) The concept of capability: The concept of capabilities developed by Sen has been cited as a better index of well being than commodities or utilities. Capability, as defined by Sen, is the ability to transform Rawlsian primary goods to the achievement of well being.
(iv) Entitlement: Sen has included the concept of entitlement items like nutrition, food, medical and health care, employment, security of food supply in times of famine. etc. He considered famine as arising out of the failure of establishing a system of entitlements.
(v) Choice of Technique: Sen's 'Choice of Technique' was a research work where he argued that in a labour surplus economy, generation of employment cannot be increased at the initial stage by the adaptation of capital-intensive technique. Conclusively, Amartya Sent more than just an economist, is an ethical philosopher; He is a lover of freedom and a humanist. He has focused on the poor, viewing them not as objects of pity requiring charitable hand-outs, but as disempowered folk needing empowerment, education health, nutrition, gender equality-safety net in times of distress; all are needed to empower people.

The relationship among AR, MR and elasticity of demand (e) is stated as follows. MR = AR.( e^-1/e)
The relationship between the AR curve and MR curve depends upon the elasticity of AR curve (AR = DD = Price).
(i) When price elasticity of demand is greater than one, MR is positive and TR is increasing.
(ii) When price elasticity of demand is less than one, MR is negative and TR is decreasing.
(iii) When price elasticity of demand is equal to one, MR is equal to zero and TR is maximum and constant.
It is to be noted that, the output range of 1 to 5 units, the price elasticity of demand is greater than one according to total outlay method. Hence, TR is increasing and MR is positive.
At the output range of 5 to 6 units, the price elasticity of demand is equal to one. Hence, TR is maximum and MR equals to zero.
At the output range of 6 units to 10 units, the price elasticity of demand is less than unity. Hence, TR is decreasing and MR is negative.

Quantity (Q)	Price (P)	TR	AR	MR	Elasticity
0	11	0	11	-	e > 1
1	10	10	10	10	e > 1
2	9	18	9	8	e > 1
3	8	24	8	6	e > 1
4	7	28	7	4	e > 1
5	6	30	6	2	e > 1
6	5	30	5	0	e = 1
7	4	28	4	-2	e < 1
8	3	24	3	-4	e < 1
9	2	18	2	-6	e < 1
10	1	10	1	-8	e < 1
11	0	0	0	-10	e < 1

Iron and steel industry :
(i) First steel industry at Kulti, Near Jharia, West Bengal - Bengal iron works company in 1870.
(ii) First large scale steal plant TISCO at Jamshedpur in 1907 followed by lISEO at Burnpur in 1919. Both belonged to private sector.
(iii) The first public sector unit was "Vishveshvaraya Iron and Steel works" at Bhadrawati.
Public sector steel plants:

Location	Assistance
(a) Rourkela (Odissa) (b) Bhilai (MP) (c) Durgapur (WB) (d) Bokaro (Jharkhand) (e) Burnpur (WB) (f) Vishakhapatnam (AP) (g) Salem (Tamil Nadu) (h) Vijai Nagar (Karnataka) (i) Bhadrawati (Kamataka)	Germany Russia UK Russia Acquired from private sector in 1976 Russia Government of India (No external assistance) Government of India Nationalisation of Vishveshvarayya Iron and Steel Ltd (owned by Centre and State government

(iv) All these are managed by SAIL (at present all important steel plants except TISCO, are under public sector)
(v) Steel Authority of India Ltd (SAIL) was established in 1974 and was made responsible for the development of the steel industry.
(vi) Presently India is the eighth largest steel producing country in the world.

The coefficient and the constant terms are given below for the equations
\(\triangle =\left| \begin{matrix} 2 & 3 \\ 2 & 1 \end{matrix} \right| \)
\(\triangle =2-6=-4\)
\(\triangle { x }_{ 1 }=\left| \begin{matrix} 7 & 3 \\ 5 & 1 \end{matrix} \right| \)
\(=7-15=-8\)
\( \triangle { x }_{ 2 }=\left| \begin{matrix} 2 & 7 \\ 2 & 5 \end{matrix} \right| \)
\(=10-14=-4\)
\(By\quad Carmer's\quad rule\)
\( { x }_{ 1 }=\frac { \triangle { x }_{ 1 } }{ \triangle } \)
\(=\frac { -8 }{ -4 } \)
\(=2\)
\({ x }_{ 2 }=\frac { \triangle { x }_{ 2 } }{ \triangle } \)
\(=\frac { -4 }{ -4 } =1\)
\(solution\quad set\)
\(\left( { x }_{ 1 }{ ,x }_{ 2 } \right) =\left\{ 2,1 \right\} \)

a. Profits: Profits are the reward for organization or entrepreneurship. Risk-taking and uncertainty-bearing are the main functions of an entrepreneur. So we may consider profit as the reward for the above functions.
b. The Risk - bearing theory of profits: According to Prof.Hawley, profits are the reward for an entrepreneur for risk-taking. Risk-taking is an important function of an entrepreneur. Risk-taking and profit-making go together. The main criticism against this theory is that it does not make distinction between known risks and unknown risks Known risks (eg. theft, fire) can be insured against. We may say that profits are the reward for taking unknown risks. For there is a lot of uncertainty about such risks.

1. Changes in Tastes and Fashions
The demand for some goods and services is very susceptible to changes in tastes and fashions.
2. Changes in Weather: An unusually
dry summer results in a increase in the demand for cool drinks.
3. Taxation and Subsidy
If fresh taxes are levied or the existing rates of taxation on commodities are increased their prices go up. The subsidies will bring down the prices. Therefore taxes reduce demand and subsidies raise demand.
4. Changes in Expectations
Expectations also bring about a change in demand. Expectation of rise in price in future. results in increase in demand.
5. Changes in Savings
Savings and demand are inversely related.
6. State of Trade Activity:
During the periods of boom and prosperity, the demand for all commodities tends to increase. On the contrary, during times of depression there is a general slackening of demand.
7. Advertisement
In advanced capitalistic countries advertising is a powerful instrument increasing the demand in the market.
8. Changes in Income
An increase in family income may increase the demand for durables like video recorders and refrigerators. Equal distribution of income enables poor to get more income. As a result consumption level increases.
9. Change in Population
The demand for goods depends on the size of population. An increase in population tends to increase the demand for goods and a decrease in population.

Introduction:
(i) The law of demand explains the direction of change in demand due to change in price.
(ii) Elasticity of demand explains the rate of change in quantity demanded due to a given change in price.
Definition:
Elasticity of demand describes the degree of responsiveness of the quantity demand for a commodity to a change in its price - Stonier and Hague.
Types:

There are four methods of measuring price elasticity of demand.
Percentage Method:
It is known as ratio method.
\(\mathrm{e_p}=\frac{\Delta \mathrm{Q}}{\Delta \mathrm{P}} \times \frac{\mathrm{P}}{\mathrm{Q}} \text { or } \frac{\% \Delta \mathrm{Q}}{\% \Delta \mathrm{P}} \text { where } \frac{\% \Delta \mathrm{Q}}{\% \Delta \mathrm{P}}=\frac{\text { Percentage change in demand }}{\text { Percentage change in price }}\)
Total Outlay Method:
Marshall suggested that this is the simplest way to decide whether demand is elastic or inelastic.
Total Revenue (Outlay) = Price x Quantity sold

Point (or) Geometrical Method:
The point elasticity in a straight line or linear demand curve is the ratio of the segments of the line to the right and to the left of the particular point.
\(Point\ elasticity=\frac{Lower\ segment\ of\ the\ demand\ curve\ below\ the\ given\ point}{Upper\ segment\ of\ the\ demand\ curve\ above\ the\ given\ point}\)

(a) High Input Costs:
(i) The biggest input for farmers is seeds. Before liberalisation, farmers across the country had access to seeds from the state government institutions.
(ii) The institutions produced own seeds and were responsible for their quality and price.
(iii) With liberalization, India's seed market was opened up to global agribusiness. Also, following the deregulation many state government institutions were closed down in 2003.
(iv) These hit farmers doubly hard.
(v) Seed prices shot up, and fake seeds made an appearance in a big way.
(b) Cutback in agricultural subsidies:
Liberalisation policies reduced pesticide and fertilizer subsidy and so fertilizer prices have increased by 300% and electricity tariffs have been also increased.
(c) Reduction of import Duties:
(i) With a view to open India's market, the liberalisation reforms also withdrew tariffs and duties on imports, which protect and encourage domestic industry.
(ii) By 2001 India completely removed restrictions on imports of almost 1,500 items including food
(iii) As a result, cheap imports flooded the market, pushing prices of crops like cotton and pepper down.
(d) Paucity of credit facilities:
(i) After 1991 the lending pattern of commercial banks, including nationalised banks drastically changed.
(ii) This has forced the farmers to rely on moneylenders who charge exorbitant rate of interest.

Introduction:
(i) Tamil Nadu stands 6th in population (7.21 crores).
(ii) It is higher than the population of U.K, France, Italy, South Africa, Spain, Sri Lanka. 36158871 males & 35980087 females.
Density:
(i) According to 2011 census it is 555.
(ii) Tamil Nadu ranks 12th in density (India 382).
(iii) The districts with highest population are Chennai, Kancheepuram, Vellore & Thiruvallur.
(iv) The districts with lowest population are Perambalur, the Nilgiris, Ariyalur & Theni.
Urbanisation:
(i) Tamil Nadu is the most urbanized state with 48.4% of urban population.
(ii) The state accounts for 9.61% of total urbanites in India against 6% share of total population.
Sex ratio:
(i) The sex ratio is nearing balance (995).
(ii) Tamil Nadu stands next to Kerala & Puducherry.
(iii) The districts with highest sex ratio are the Nilgiris, Thanjavur & Nagapattinam. The districts with lowest sex ratio are Theni & Dharmapuri.
Infant Mortality rate IMR:
The IMR is 17 (per 1000) compared to the national average of 34.
Maternal Mortality Rate MMR:
(i) Tamil Nadu has a good record of controlling MMR.
(ii) It ranks third 79 next to Kerala & Maharashtra against the national average of 159.
Life expectancy at birth:
The life expectancy for males is 68.6 (India 66.4) and for females it is 72.7(India 69.6).
Literacy:
(i) The literacy rate is higher than many states.
(ii) For males it is 86.81% & females 73.86%.
(iii) Districts with highest literacy are Kanyakumari & Chennai.
(iv) Districts with lowest literacy are Dharmapuri & Ariyalur.

Introduction:
The law states that if all other factors are fixed and one input is varied in the short run, the total output will increase at an increasing rate at first, then be constant and finally increase at a declining rate.
Definition:
"As equal increments of one input are added, the inputs of other productive services being held constant, beyond a certain point, the resulting increments of product will decrease (i.e) the MP will diminish". - G. Stigler
Assumptions:
1. Only one factor is variable.
2. All units of the variable factor are homogeneous.
3. The product is measured in physical units.
4. No change in technology.
5. No change in price of the product.

Units of variable factor	Total Product (TPL)	Marginal Product (MPL)	Average Product (APL)	Stages
1 2 3	2 6 12	2 4 6	2 3 4	I
4 5	16 18	4 2	4 3.6	II
6 7	18 16	0 -2	3 2.28	III

x-axis represents labourers. y-axis represents TP_L, MP_L, AP_L

Stages	Total Product (TP)	Marginal Product (MP)	Average Product(AP)
Stage I	It increases at an increasing rate. Then it increases at a decreasing rate. This is the point of inflection.	It increases, reaches maximum and starts to decrease.	It increases, reaches maximum.
Stage II	It continues to increase at a diminishing rate and reaches maximum	lt continues to diminish and becomes zero.	It is equal to MP then begins to diminish.
Stage III	It diminishes.	It becomes negative	It diminishes but always is positive.

Conclusion:
The law of variable proportion helps the producer to decide on the amount of factors to be employed.

Introduction:
The government of India, Ministry of Commerce and Industry announced New Foreign Trade Policy on 1st April 2015 for a period 2015 - 2020.
Salient Features:
(i) Reduce export obligations by 25% and give boost to domestic manufacturing supporting the 'Make in India' concept.
(ii) As a step to Digital India concept, online procedure to upload digitally signed document by CA/CS/Cost Accountant are developed and further mobile app for filing tax, stamp duty has been developed.
(iii) Repeated submission of physical copies of documents available on Exporter Importer Profile is not required.
(iv) Export obligation period for export items related to defence, military store, aerospace and nuclear energy to be 24 months.
Conclusion: EXIM Policy 2015 - 2020 is expected to double the share of India in World Trade from present level of 3% by 2020. This is too ambitious.

Nature of Economics:
(i) Nature of a subject refers to its contents, how and why they find a place in the subject.
(ii) The nature is understood by studying the various definitions given by economists.
Wealth definition:
(i) Adam Smith in his book "An inquiry into nature and causes of wealth of nations" defines Economics as a science of wealth.
Welfare definition:
(i) Alfred Marshall in his book "Principles of Economics", defines Economics as a study of mankind in the ordinary business of life;
(ii) It examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well being.
(iii) It is a study of man and wealth.
Scarcity definition:
(i) Lionel Robbins in his book "An Essay on the nature and significance of economic science" defines Economics as a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.
Growth definition:
(i) Paul Samuelson defines economics as the study of how men and society choose, with or without the use of money, to employ scarce productive resources which could have alternative uses, to produce various commodities over time and distribute them for consumption now and in the future among various people and groups of society.

(ii) Since there are many definitions Keynes observed that "Political Economy has strangled itself with definitions."
Scope of Economics:
(i) It refers to the subject matter of Economics, whether it is an art or a science.
Subject matter:
(i) Economics studies the ways in which people use the available scarce resources to satisfy their unlimited wants.
(ii) It deals with consumption, production of goods and distribution of income to the factors of production.
(iii) All human activities related to wealth is the subject matter of Economics.
Arts:
(i) Since Economics provides guidance to the solution to all the economic problems it is an Art.
Science:
(i) Economics is a science since it has similar characteristics of a science.
(ii) Economics examines the causes and effects of problems. So it is considered both an art and a science.
Positive Science:
(i) Economics is a positive science since it deals with what it is, it analyses a problem on the basis of facts and examines its causes.
Normative Science:
(i) Economics is normative science because it responds to what ought to be;

(i) A monopoly is a one firm industry.
(ii) It has a downward sloping demand or AR curve.
(iii) More units of output are sold at less price.
(iv) MR lies below AR.
(v) The monopolist will continue to sell his product as MR > MC. Equilibrium is when MC = MR.
(vi) Beyond this point the producer has loss.

At OM output MC = MR. Beyond OM he will stop production since MC > MR.
At equilibrium average revenue = QM
Average cost = RM
Profit per unit = RQ
Total profit = PQRS

Introduction:
Indian economy is the seventh largest economy of the world. Its features are:
Mixed economy:
(i) In India private and public sectors co-exist.
(ii) Some fundamental and heavy industries are under public sector.
(iii) Due to liberalization private sector's importance has increased.
Agriculture:
(i) 60 % of Indians depend on agriculture for their livelihood.
(ii) 17 % of GDP is got from agricultural sector.
(iii) Green revolution and inventions in biotechnology have made agriculture self sufficient.
(iv) The export of fruits, vegetables, spices, tobacco, animal skin, vegetable oils also add to foreign exchange earning.
An emerging market:
(i) India has emerged as a vibrant economy sustaining stable GDP growth rate even when there was global downtrend.
(ii) This has attracted foreign capital through FDI and FII.
(iii) India is in the 7^th position in terms of nominal GDP and 3^rd in terms of purchasing power parity.
(iv) India is one among the G20 countries.
Fast growing economy:
(i) With a growth rate of 7.1% in GDP India is the world's fastest growing economy in 2016-17 next to China.
Fast growing service sector:
(i) There has been growth in technical sectors like Information Technology, BPO.
(ii) These emerging services have helped the country to go global.
Large domestic consumption:
(i) The standard of living has improved a lot. There is rapid increase in domestic consumption.
Rapid growth of urban areas:
(i) There has been a rapid growth of urban areas in India after Independence. Improved connectivity in transport and communication, education and health have speeded up urbanization.
Stable macroeconomy:
(i) India is one of the most stable economies of the world.
(ii) The current year's economic survey represents the Indian economy to be a "heaven of macroeconomic stability, resilience and optimism".
Demographic dividend:
(i) The human capital is young.
(ii) They are young, skilled and trained enough to maximize growth.
(iii) This has invited foreign investments and outsourcing opportunities.