(i) Cardinal approach of Marshall- utility is measured by cardinal numbers such as 1,2,3
(ii) Ordinal approach of Hicks and Allen- utility can be compared or ranked or ordered such as I,II,III.

(i) The plan aimed to double the per capita income of India in the next 10 years.
(ii) It aimed to reduce the poverty ratio to 15 % by 2012.
(iii) Its growth target was 8.0 % but it
achieved only 7.2%.

(i) Production function refers to the relationship among units of the factors of production (inputs) and the resultant quantity of a good produced (output).
(ii) Q = f(N, L, K, T);
Q = Quantity of output, N = Land, L = Labour, K = Capital, T = Technology

A person who has no power to fix the price of the product is a price taker. A seller in perfect competition is a price taker.

(i) Goods are tangible, (eg) car but services are intangible (eg) goodwill.
(ii) Goods can be stored but services cannot be stored.

(i) Interest is a payment made by a borrower to the lender for the money borrowed.
(ii) It is the price paid for the use of capital.

C = F(Q) the functional relationship between cost and output is cost function. When output increases, Cost increases.

(i) Any stock or reserve that can be drawn from nature is a Natural Resource.
(ii) The major natural resources are land, forest, water.

(i) Morris D Morris developed the Physical Quality of Life Index (PQLI).
(ii) It is a measure to calculate the quality of life
(iii) He included life expectancy, infant mortality rate and literacy rate. A scale of each indicator ranges from 1 to 100.
(iv) Number 1 represents worst performance of any country.
(v) 100 is the best performance. Eg. in case of life expectancy, the upper limit is 100.
(vi) This was assigned to 77 years which was achieved by Sweden in 1973.
(vii) The lower limit 1 was assigned to 28 years achieved by Guinea-Bissau in 1960.
(viii) The difference between HDI and PQLI is the inclusion of income.
(ix) In HDI income is included and it represents both physical and financial aspects of development.
(x) In PQLI income is excluded and only physical aspects of life are considered.

(i) After Independence, the government adopted planned economic development.
(ii) The main objective of planning was social welfare.
(iii) Before Independence commercial banks were in the private sector.
(iv) These banks did not help the government to achieve the social objectives of planning.
(v) So the government nationalised 14 major commercial banks on 19th July 1969 and 6 more banks in 1980.

(i) Elasticity of supply is the degree of responsiveness of change in supply to change in price on the part of sellers.
(ii) There are 5 types of elasticity of supply:
1. Relatively elastic supply
2. Relatively inelastic supply
3. Unitary elastic supply
4. Perfectly elastic supply
5. Perfectly inelastic supply
(iii) The factors governing elasticity of supply are the nature of the commodity, cost of production, technical condition & time factor.

(i) According to Clark profit is the difference between price and cost of production.
(ii) Profit is the reward for dynamic changes in society-like increase in population, increase in volume of capital, improvement in methods of production, change in forms of industrial organisation and increase in wants of consumers.

Social infrastructure refers to those structures which improve the quality of manpower and contribute indirectly towards the growth of an economy.
Education:
(i) Education is in Concurrent List.
(ii) The Ministry of Human Resource Development decides the education budget and education policy.
(iii) India follows a six-level system - nursery, primary, secondary, higher secondary, graduation and post-graduation.
(iv) We have the 10 +2 pattern.
(v) The education department consists of schools, colleges and universities imparting education to all.
(vi) Though the budget share of education is 3% of GDP yet the per pupil expenditure for school students is the lowest.
Health:
(i) Health is a state-government responsibility.
(ii) The Central Council of Health and Welfare formulates various health care projects.
(iii) India has the ayurvedic medicine, unani, homeopathy, allopathy and yoga.
(iv) Medical practicing needs a licensing from the Ministry of Health. All medical systems now are under one ministry viz AYUSH.
(v) Health status is better in Kerala but generally India's health status is not satisfactory

Introduction:
(i) The law of diminishing marginal utility was extended and is called Law of Equi marginal utility
(ii) Law of substitution or Law of consumer's Equilibrium or Gossen's II law or law of maximum satisfaction.
Definition:
Marshall, "If a person has a thing which he can put to several uses, he will distribute it among these uses in such a way that it has the same marginal utility in all. For, if it had a greater marginal utility in one use than another, he would gain by taking away some of it from the second use and applying it to first.
Assumption
(i) Consumer is rational and wants maximum satisfaction.
(ii) Utility is measurable in cardinal numbers.
(iii) Marginal utility of money is constant.
(iv) Income of the consumer is given.
(v) There is perfect competition.
(vi) Price is given.
(vii) Law of diminishing marginal utility operates
Explanation:
(i) The consumer has Rs. 11.
(ii) He wants to spend it on apple ( Rs 1 each) and orange (Rs. 1 each)
(iii) He will be in equilibrium only when he gets maximum satisfaction ie.
\(\mathrm{K}=\frac{\text { Marginal utility of apple }}{\text { Price of apple }}=\frac{\text { Marginal utility of orange }}{\text { Price of orange }}\)
If is \(\frac{\mathrm{MU_A}}{\mathrm{P_A}}\) less than \(\frac{\mathrm{MU_O}}{\mathrm{P_O}}\) he would transfer money from apple to orange till it is equal.
He should buy 6 units of apple & 5 units of oranges. He gets (92 + 58) = 150 units satisfaction.
\(\frac{\mathrm{MU_A}}{\mathrm{P_A}}=\frac{\mathrm{MU_O}}{\mathrm{P_O}}=\frac{4}{1}=\frac{4}{1}\)

Explanation:
(i) X axis shows amount of money spent
(ii) Y axis shows marginal utility of apple and orange.
(iii) If consumer spends Rs.6 on apple and Rs.5 on orange MU will be equal.
(iv) ie. AA₁ = BB₁ = 4 = 4. So he gets maximum utility.
Criticisms:
(i) Utility cannot be measured.
(ii) No consumer compares the utility and disutility from each unit of the commodity while buying it.
(iii) This law cannot be applied to durable goods.
Conclusion:
(i) The law of equi marginal utility is an improvement over the law of diminishing marginal utility because it can be used for many commodities consumed at the same time.

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.