Key Concepts in Economics for 12th HSC Board

Definition: Study of individual economic units like consumers and firms.
Demand and Supply:
- Law of Demand: As price falls, quantity demanded rises, and vice versa.
- Law of Supply: As price rises, quantity supplied increases, and vice versa.
- Equilibrium: Point where demand equals supply.
Elasticity:
- Price Elasticity of Demand: Measure of responsiveness of quantity demanded to price changes.
- Types: Elastic, Inelastic, Unitary.
Consumer Behavior:
- Utility: Satisfaction from consumption.
- Marginal Utility: Additional satisfaction from consuming one more unit.

Definition: Study of the economy as a whole, including national income and overall levels of prices.
National Income:
- GDP: Total value of goods and services produced in a country.
- GNP: GDP plus net income from abroad.
Inflation: General increase in prices leading to decreased purchasing power.
- Types: Demand-pull inflation, Cost-push inflation.
Unemployment: Percentage of the labor force that is jobless and actively seeking employment.
Monetary and Fiscal Policy:
- Monetary Policy: Managed by central bank to control money supply and interest rates.
- Fiscal Policy: Government spending and taxation policies to influence the economy.

Indicators:
- HDI (Human Development Index): Composite index measuring average achievement in key dimensions of human development.
- Poverty Line: Minimum level of income deemed adequate in a particular country.
Sustainable Development: Economic growth that meets present needs without compromising future generations.

Trade Theories:
- Comparative Advantage: Countries should specialize in production where they have a lower opportunity cost.
- Balance of Trade: Difference between a country's exports and imports.
Globalization: Increased interconnectedness and interdependence of economies worldwide.

Impact of COVID-19 on Economy: Shift in consumer behavior and government policies.
Digital Economy: Growth of e-commerce and its implications on traditional businesses.
Climate Change and Economics: Economic policies aimed at sustainability and environmental protection.

Focus on key definitions and concepts.
Practice past exam papers for structure and question types.
Understand graphs and diagrams related to demand, supply, and macroeconomic indicators.
Stay updated on current economic events and policies.

Examines individual economic units, including consumers and firms.
Demand and Supply:
- Law of Demand: Inverse relationship between price and quantity demanded.
- Law of Supply: Direct relationship between price and quantity supplied.
- Equilibrium: Occurs at the price point where quantity demanded equals quantity supplied.
Elasticity:
- Price Elasticity of Demand: Measures how quantity demanded responds to price changes.
- Classifications of elasticity: Elastic (responsive), Inelastic (less responsive), Unitary (proportional).
Consumer Behavior:
- Utility: Satisfaction derived from consuming goods and services.
- Marginal Utility: Additional satisfaction gained from consuming an extra unit of a product.

Analyzes the economy as a whole, focusing on national metrics such as national income and price levels.
National Income:
- GDP (Gross Domestic Product): Total value of all goods and services produced within a country.
- GNP (Gross National Product): GDP plus net income earned from abroad.
Inflation: A rise in overall price levels, eroding purchasing power.
- Types include demand-pull (excess demand) and cost-push (increased production costs).
Unemployment: Measures the proportion of the labor force that is without jobs but actively seeking work.
Monetary and Fiscal Policy:
- Monetary Policy: Central bank’s strategy for regulating money supply and interest rates.
- Fiscal Policy: Government initiatives regarding taxation and spending to steer the economy.

Indicators:
- HDI (Human Development Index): Measures achievement in health, education, and income.
- Poverty Line: Defined minimum income level necessary for basic living standards.
- Sustainable Development: Economic growth that fulfills current needs while preserving resources for future generations.

Trade Theories:
- Comparative Advantage: Encourages countries to produce goods with lower opportunity costs.
- Balance of Trade: Calculated difference between a nation’s exports and imports.
- Globalization: Process of increased economic interdependence among countries.

Impact of COVID-19 on Economy: Shift in consumer habits and government responses affecting economic conditions.
Digital Economy: Expansion of online commerce influencing traditional business models.
Climate Change and Economics: Need for policies that support sustainability and environmental conservation in economics.

Prioritize understanding key definitions and core economic concepts.
Engage with past exam papers for familiarity with formats and question styles.
Comprehend and practice interpreting demand/supply graphs and macroeconomic indicators.
Stay informed on contemporary economic developments and policy changes for relevance in discussions.