\(\int { 5dx }\)=5x + c

(i) Giffen goods: Sir Robert Giffen explained the exceptional nature of inferior goods. So these inferior goods (eg) ragi are called Giffen goods.
(ii) When the price of an inferior good falls, the poor will buy less and vice versa.
(iii) It is an exception to the law of demand.

(i) Indian agriculture is still a gamble of the monsoons.
(ii) This strategy needs heavy investment in seeds, fertilizers, pesticides and water.
(iii) Gap between irrigated and rain fed areas had widened.
(iv) Farm mechanization created unemployment.
(v) Larger chemical use reduced the soil fertility and spoiled human health.

Rural poverty refers to the existence of poverty in rural areas.

(i) Iso-cost line represents a combination of inputs which show the same amount of cost.
(ii) It gives information on factor prices and financial resources of the firm.

Expenditure involved in selling the product is selling cost. (eg) advertisement. Selling cost changes the position of the demand curve.

(i) Goods are tangible and have physical dimension.
(ii) Goods are transferable and have value in exchange.

y = 3x² + 16x³
Differentiating,
\(\frac{dy}{dx}=3(2)x^{2-1}+16(3)x^{3-1}\)
= 6x¹ + 48x²
\(\frac{dy}{dx}=6x+48x^{2}\)

Characteristics
Wants are unlimited
(i) Wants are countless and various in kinds.
(ii) When one want is satisfied another want arises.
Wants become habits
(i) When a man starts reading newspaper in the morning it becomes a habit.
Wants are satiable
(i) We can satisfy particular wants at a given time.
(ii) When one feels hungry, he takes food and that want is satisfied.
Wants are alternative
(i) There are alternative ways to satisfy a particular want (eg) idly, dosa.
Wants are competitive
(i) There is competition among wants.
(ii) So we have to choose more urgent wants and satisfy them first.
Wants are complementary
(i) Satisfaction of a particular want requires the use of more than one commodity. (eg) car and petrol.
Wants are recurring
(i) Some wants occur again and again. For ex. if we feel hungry, we take food and satisfy our want.
(ii) But after some time we again feel hungry and want food.

(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) SHG is an economically homogenous group formed through a process of self-selection based on the affinity of its members.
(ii) Most SHGs are women's groups with membership ranging between 10 and 20.
(iii) SHGs have well defined rules and by-laws, hold regular meetings and maintain records and savings and credit discipline.
(iv) SHGs are self-managed institutions characterised by participatory and collective decision making.

Wind energy: Muppandal wind farm supplies the villagers with electricity for work. Wind farms are found in Nagercoil, Tuticorin, Coimbatore, Pollachi, Dharapuram & Udumalaipettai. They generate about half of India's 2000 megawatts of wind energy.
Nuclear energy: The Kalpakkam Nuclear Power Plant and the Koodankulam Nuclear Power Plant are the major nuclear energy plants for the energy grid.
Thermal energy: The thermal power plants are at Athippattu (North Chennai), Ennore, Mettur, Neyveli & Thoothukudi.
Hydel energy: There are 20 hydroelectric units in Tamil Nadu at Hundah, Mettur, Periyar, Maravakandy, Parson Valley.
Solar energy: Tamil Nadu tops in solar power generation.                                     Wind energy: Tamil Nadu has the highest installed wind energy capacity in India. The state has very high quality of offshore wind energy potential off the Tirunelveli coast & southern Thoothukudi & Rameswaram Coast.

Nominal wage or money wage:
It is paid in terms of money.
Real wage:
The wages are paid in terms of goods & services
Piece wage:
The wages are paid on the basis of quantum of work done.
Time wage:
The wages are paid on the basis of the amount of time that the worker works.

Consumption: Human wants come under consumption.
Production: It deals with the transformation of inputs into output.
Exchange: It deals with trade and commerce.
Distribution: It deals with the reward to the factors of production.

Introduction:
In his book "The general theory of employment, interest and money" in 1936, Keynes propounded the liquidity preference theory of Interest.
Theory:
Interest is the reward for parting with liquidity for a specified period of time.
Meaning:
Liquidity preference means the preference of people to hold wealth in the form of liquid cash and not in non-liquid assets like bonds, securities, bills of exchange, land, building, gold.
Motives:
Transaction motive:
It relates to the desire of the people to hold cash for the current transaction. M_t = f(y)
Precautionary motive:
It relates the desire of the people to hold cash to meet unexpected expenditures such as sickness, accidents, fire. M_P = f(y)
Both these motives depend on the income level.
Speculative motive:
It relates to the desire of people to hold cash in order to take advantage of market movements regarding the future changes in the price of bonds
There is inverse relation between liquidity preference and interest rate. M_s = f(i)
Determination of interest rate:

(i) The rate of interest is determined by the demand for and the supply of money.
(ii) The demand for money is liquidity preference for speculative motive.
(iii) The supply of money is determined by the policies of the government and the central bank.
(iv) The supply of money consists of coins, currency notes and bank deposits.
Equilibrium:
(i) In the short run supply of money is constant.
(ii) LP is liquidity preference curve M₂ M₂ is supply curve of money.
(iii) Both curves interest at E, which is the equilibrium point.
(iv) If LP increases from LP to L₁P₁ & money supply being constant, the interest rate increases from OI to OI₁. (fig a)
(v) Suppose LP is constant (fig b).
(vi) If supply of money is OM₂, the interest is OI₂ & if the supply of money is reduced from OM₂ to OM₃, the interest would increase from OI₂ to OI₃. If money supply increases, interest rate decreases.
Criticism:
(i) This theory does not explain the existence of different interest rates prevailing in the market at the same time.
(ii) It explains interest rate in the short-run.
Conclusion:
The Keynesian liquidity preference theory is an improvement over other theories.

People related problems:
The problems related to individuals and their standard of living consist of illiteracy, lack of technical know how, low level of confidence, dependence on sentiments, and beliefs.
Agriculture related:
1. Lack of expected awareness, knowledge, skill and attitude.
2. Unavailability of inputs
3. Poor marketing facility.
4. Insufficient extension staff and services.
5. Multidimensional tasks to extension personnel.
6. Small size of land holding.
7. Sub-division and fragmentation of landholdings.
8. Absence of infrastructure to work and stay in rural areas.
9. Primitive technology and low adoption of modern technologies
10. Reduced public investment and absence of role for farmers in fixing price for their products.
Infrastructure related:
Poor infrastructure facilities like water, electricity, transport, educational institutions, communication, health, employment, storage facility, banking and insurance are found in rural areas.
Economics related:
(i) There is inability to adopt high cost technology, high cost of inputs, under privileged rural industries, low income, indebtedness and existence of inequality in land holdings and assets.
(ii) Infertile areas, a few absentee landlords own large area and they do not show any interest in improving the performance of agriculture.
Leadership related:
Leadership is in the hands of inactive and incompetent people, self-interest leaders, biased political will, less bargaining power and dominance of political leaders.
Administrative Problems:
There is political interference, lack of motivation, low wages in villages, improper utilization of budget, absence of monitoring and implementation of rural development programmes.
Conclusion: The problems found in rural economy are endless.

Iso and quant are derived from the Greek language, meaning 'equal' and 'quantity'.
Definition:
Isoquant curve is a locus of points representing various combinations of two inputs capital and labour yielding the same output. It is also called equal product curve or product indifference curve.
Properties:
1. The isoquant curve has negative slope:
(i) Capital is being substituted by labour.
(ii) Isoquant has negative slope because of diminishing MRTS.
(iii) Constant MRTS (straight line) and increasing MRTS (concave) are also possible.
(iv) It depends on the nature of isoquant curve

2. Isoquant curve is convex to origin:
The capital substituted per unit of labour goes on decreasing so the isoquant is convex to the origin.

3. Isoquant curves cannot intersect each other:
Point A lies on IQ₁ and IQ₂, Point C lies on IQ₂, showing higher output Point B
lies on IQ₁, showing lower output. C = A, B = A But C > B.


4. Upper isoquant curve represents a higher level of output:
Higher IQ₂ shows higher output 200 units. Lower IQ₁ shows lower output 100 units. IQ₂ means the use of more sectors than IQ₁. Arrow shows increase in output with a right and upward shift of an isoquant curve.

5. Isoquant curve does not touch either x axis or y axis:
In IQ₂ only capital is used and in IQ₁ only labour is used.

Conclusion:
These are the properties of isoquant curves.

Wind energy: Muppanthal wind farm supplies the villagers with electricity for work. Wind farms are found in Nagercoil, Tuticorin, Coimbatore, Pollachi, Dharapuram & Udumalaipettai. They generate about half of India's 2000 megawatts of wind energy. Tamil Nadu has the highest installed wind energy capacity in India. The state has very high quality of offshore wind energy potential off the Tirunelveli coast & southern Thoothukudi & Rameswaram Coast.
Nuclear energy: The Kalpakkam Nuclear Power Plant and the Koodankulam Nuclear Power Plant are the major nuclear energy plants for the energy grid.
Thermal energy: The thermal power plants are at Athippattu (North Chennai), Ennore, Mettur, Neyveli & Thoothukudi.
Hydel energy: There are 20 hydro electric units in Tamil Nadu at Hundah, Mettur, Periyar, Maravakandy, Parson Valley.
Solar energy: Tamil Nadu tops in solar power generation.

Introduction:
(i) In order to promote export and industrial growth SEZ was introduced in many countries.
(ii) India was one of the first in Asia to set up EPZ (Kandla, 1965).
(iii) SEZ covers free trade zones, export processing zones, industrial parks, economic and technology development zones, high-tech zones, science and innovation parks, free ports, enterprise zones.
Major objectives of SEZs
(i) To enhance foreign investment, to attract foreign direct investment and increase GDP.
(ii) To increase shares in global export.
(iii) To generate additional economic activity.
(iv) To create employment opportunities.
(v) To develop infrastructure facilities.
(vi) To exchange technology in the global market.
Characteristics:
(i) Geographically demarcated area with physical security.
(ii) administered by single authority.
(iii) Streamlined procedures.
(iv) Having separate custom area.
(v) Governed by more liberal economic laws.
(vi) Greater freedom to firms located in SEZs.
(vii) They need not respect the government's rules and regulations.
(viii) The social and environmental impacts were disastrous.

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;

Large number of buyers and sellers:
(i) Since there are large number of buyers and sellers each individual buyer or seller buys or sells a very very small quantity of the product found in the market.
(ii) So he has no power to fix the price of the product.
(iii) He is only a price taker.
Homogenous product & uniform price:
(i) All the units of the product are perfectly substitutable - they are of the same size, shape, colour, quality.
(ii) So a uniform price prevails in the market.
Free entry and exit:
(i) In the short run, the very efficient producer can produce the product at a very low cost & earn super normal profit.
(ii) This attracts new firms to enter.
(iii) When there are more firms, supply increases, so price falls.
(iv) Inefficient producer faces loss & so quits the market.
Absence of transport cost:
The prevalence of the uniform price is also due to the absence of the transport cost.
Perfect knowledge of the market:
(i) All buyers and sellers have a thorough knowledge of the quality of the product, prevailing price.
No government intervention:
(i) No government regulation on supply of raw materials & in price determination.