Category: Budget

Elasticity of demand depends upon the number of factors. These are follows: (1) Nature of Commodity: A commodity may be a necessary, or a coif fort or a luxury. Necessaries, which satisfy the most urgent needs and are indispensable, have an inelastic demand, while comforts and luxuries, which do not satisfy urgent wants, have a elastic demand. ADVERTISEMENTS: Take for example, the case of salt. A change in price of salt will not have much effect on its quantity demanded. A change in the price of a necessary article cannot after its demand to a great extent. On the contrary, commodities which are items of luxury have a high elasticity of demand.For instance, if there is an increase in price of motor cars in a country like India there will…

Powers and functions of a Governor: The powers and functions of a Governor may be classified under the following headings: Image Source: data1.ibtimes.co.in (1) Executive powers and function: Article 154 provides that the executive powers of the State shall be vested in the Governor to be exercised by him either directly or through officers subordinates to him. The executive powers of the State shall, extend to the matters with respect to which the legislature of the State has power to make laws. ADVERTISEMENTS: Provided that in any matter with respect to which the legislature of a State and Parliament have power to make laws, the executive power of the State shall be subject to, and limited by, the executive power expressly conferred by this Constitution or by any law made…

Indifference map shows the tastes and preferences of the consumer independently of the market conditions, i.e., what the consumer would like to do.On the other hand, the budget line represents the purchasing power or opportunities open to the consumer in the market, given his income and prices of the commodities, i.e., what the consumer is able to do.The indifference map and the budget line are quite independent of each other so long as the consumer does not start making purchases in the market. image source: i.ytimg.com ADVERTISEMENTS: However, both of these instruments are important in the determination of consumer equilibrium or in predicting what consumer will actually do, i.e., how the consumer spends his money in the pursuit of his needs and interests.Every consumer wants to maximise the satisfaction. But,…

The law of equi-marginal utility has wide applications in almost all spheres of man’s economic behaviour. In the words of Samuelson, it is not merely a law of economics; it is a law of logic itself” image source: i.ytimg.comThe applications of this law of substitution in diversified fields of Economics are discussed here. 1. Consumption: ADVERTISEMENTS: In the field of consumption, the law tells us as to how should a consumer spend his money to secure maximum utility. The law not only explains the number of units of various commodities to be purchased by the consumer, it also helps the consumer in allocating income of the consumer into multiple uses of the same commodity. Further, the decision regarding the propor­tion of income to be spent and the proportion to be…

A consumer spends his income on many goods and services. Now, the question is, how he should distribute his total income among these goods and services, so that he may be in equilibrium. That is, he attains the maximum possible level of utility.Here, it should be pointed out that the consumer is assumed to be a rational person, judicially and carefully calculating the utilities of various goods and substituting them for one another to maximise utility. Further, marginal utility of money is assumed to be constant.We analyse the equilibrium of the consumer by taking the case of two goods, ‘A’ and ‘B’. The same analysis can be extended for any number of goods. Let the prices of ‘A’ and ‘B’ are PA and PB respectively. image source: i.ytimg.com ADVERTISEMENTS: Then…

Essay on The Ecological Effects of Microclimates of Mountain Slopes, High Altitude, Valley and City !The influence of different ecolo­gical media and of different abiotic environmental factors on the living organisms. All these factors form the macroclimate which is measured by the meterologists. But the climate in which animals actually live is very much different from the gross environmental conditions. image source: carbonlandscapes.co.uk ADVERTISEMENTS: This immediate environment of animal is called effective climate or microclimate and relates to such of the habitats of ani­mals as those living in the soil within crevices of barks of trees, inside sheaths of grasses, within burrows, in ant nests, beneath logs of wood or rock, within caves, on vegetation in sand dunes, with­in plant galls and a variety of habitats which are occupied by…

The Mehta Committee Report is considered a Bible of the Panchayati Raj indeed a document of great historic importance. According to R.L. Khanna, “It is bold and an imaginative attempt to inaugurate viable and virile rural local self government an earnest effort to translate into reality Mahatma Gandhi’s dream of the Panchayati Raj. Image Source: cdn.narendramodi.inIt envisaged a revolutionary experiment of democratic decentralisation. It is tantamount of faith in democracy a grass root approach to administration.” By 1963 Panchayati Raj was established in most of the Indian states. ADVERTISEMENTS: An analysis of various statutes passed by the state Governments in this direction brings to the force two issues: (i) Should be unit of devolution be district or Block or both the adopted as units of decentralization; (ii) Should the members…

The master budget is a comprehensive summary budget incorporating all the functional and operational budgets. It portrays sales, revenues, expenses, profits, capital employment, material and labour costs, return on investment and the relationships among these and other items. Image Source: i.ytimg.comThe master budget is usually a short term budget, generally covering a period of one year to eighteen months and is used to control the entire organization. The formation of the master budget requires the following steps. a) Forecast demand for products and services: ADVERTISEMENTS: This forecast may be based upon simple intuitional judgements about the future trends or it may be the result of more complex statistical calculations. b) Identity and assign responsibility for various cost and revenue components to areas that are most appropriate: For example, production costs…

The master budget is a comprehensive summary budget incorporating all the functional and operational budgets. It portrays sales, revenues, expenses, profits, capital employment, material and labour costs, return on investment and the relationships among these and other items. Image Source: expertsystemsolutions.comThe master budget is usually a short term budget, generally covering a period of one year to eighteen months and is used to control the entire organization. The formation of the master budget requires the following steps. a) Forecast demand for products and services: ADVERTISEMENTS: This forecast may be based upon simple intuitional judgements about the future trends or it may be the result of more complex statistical calculations. b) Identity and assign responsibility for various cost and revenue components to areas that are most appropriate: For example, production costs…

So far we have assumed away the expansion of financial resources of the firm. As the producer becomes financially well-off, he has to change the factor combinations with the expansion of his output, given the factor prices.In Fig. 7.12, AB, CD, EF and GH are the four iso- cost lines representing different levels of total cost or outlay. All iso-cost lines are parallel to one-another indicating that prices of the two factors remain the same”. E1, E2, E3 and E4 are the points of producer’s equilibrium corresponding to the point of tangencies of the above four iso- cost lines with the highest possible isoquant in each case.The line joining the least cost combinations like E1, E2, E3 and E4 is called the expansion path. It is so called, because, it…