Class 12 Microeconomics Definitions PDF

Here are all the important **definitions** from the Class 12 Microeconomics syllabus, simplified and tailored for your Bihar Board final exam preparation: **Chapter 1: Introduction to Microeconomics** 1. **Microeconomics**:\ The branch of economics that studies individual economic units, such...

Here are all the important **definitions** from the Class 12 Microeconomics syllabus, simplified and tailored for your Bihar Board final exam preparation: **Chapter 1: Introduction to Microeconomics** 1. **Microeconomics**:\ The branch of economics that studies individual economic units, such as households, firms, and industries, and how they make decisions about allocating limited resources. 2. **Macroeconomics**:\ The branch of economics that studies the economy as a whole, including national income, inflation, unemployment, and economic growth. 3. **Economy**:\ A system that organizes the production, distribution, and consumption of goods and services in a society. 4. **Scarcity**:\ A situation where resources are limited in relation to the unlimited wants of people. 5. **Opportunity Cost**:\ The value of the next best alternative that is forgone when a choice is made. 6. **Central Problems of an Economy**:\ The fundamental issues of deciding what to produce, how to produce, and for whom to produce due to scarcity of resources. **Chapter 2: Theory of Consumer Behavior** 1. **Utility**:\ The satisfaction or pleasure a person derives from consuming a good or service. 2. **Total Utility (TU)**:\ The total amount of satisfaction obtained from consuming a given quantity of a good. 3. **Marginal Utility (MU)**:\ The additional satisfaction gained by consuming one more unit of a good. 4. **Law of Diminishing Marginal Utility**:\ As a person consumes more units of a good, the additional satisfaction (marginal utility) derived from each additional unit decreases. 5. **Indifference Curve**:\ A graph showing different combinations of two goods that provide the same level of satisfaction to the consumer. 6. **Budget Line**:\ A line that represents all the combinations of two goods a consumer can purchase with their given income at prevailing prices. 7. **Consumer Equilibrium**:\ A situation where a consumer maximizes their satisfaction, given their income and the prices of goods. 8. **Demand**:\ The quantity of a good that a consumer is willing and able to purchase at different prices during a given period. 9. **Law of Demand**:\ There is an inverse relationship between the price of a good and the quantity demanded, ceteris paribus (other things remaining constant). 10. **Elasticity of Demand**:\ A measure of how much the quantity demanded of a good changes in response to a change in its price. **Chapter 3: Production and Costs** 1. **Production Function**:\ A mathematical relationship that shows the maximum output that can be produced with a given set of inputs. 2. **Law of Variable Proportions**:\ As more units of a variable input are added to a fixed input, the marginal product initially increases, then decreases, and eventually becomes negative. 3. **Fixed Cost**:\ Costs that remain constant regardless of the level of output produced. 4. **Variable Cost**:\ Costs that change with the level of output produced. 5. **Total Cost (TC)**:\ The sum of fixed and variable costs at a given level of output. 6. **Marginal Cost (MC)**:\ The additional cost incurred by producing one more unit of output. 7. **Average Cost (AC)**:\ The cost per unit of output, calculated as Total Cost divided by the quantity of output. **Chapter 4: The Theory of the Firm under Perfect Competition** 1. **Market**:\ A place where buyers and sellers interact to exchange goods and services. 2. **Perfect Competition**:\ A market structure with a large number of buyers and sellers, homogeneous products, free entry and exit, and perfect knowledge. 3. **Revenue**:\ The income earned by a firm from the sale of its goods and services. 4. **Total Revenue (TR)**:\ The total income earned by a firm, calculated as Price × Quantity sold. 5. **Average Revenue (AR)**:\ Revenue per unit of output, calculated as Total Revenue divided by Quantity sold. 6. **Marginal Revenue (MR)**:\ The additional revenue earned by selling one more unit of output. 7. **Producer's Equilibrium**:\ A situation where a firm maximizes its profit by equating Marginal Revenue (MR) with Marginal Cost (MC). **Chapter 5: Market Equilibrium** 1. **Market Equilibrium**:\ A situation where the quantity demanded equals the quantity supplied at a given price. 2. **Excess Demand**:\ A situation where the quantity demanded exceeds the quantity supplied at a given price. 3. **Excess Supply**:\ A situation where the quantity supplied exceeds the quantity demanded at a given price. 4. **Price Ceiling**:\ A government-imposed maximum price that can be charged for a good or service. 5. **Price Floor**:\ A government-imposed minimum price that must be paid for a good or service. **Chapter 6: Non-Competitive Markets** 1. **Monopoly**:\ A market structure where a single seller controls the entire market for a good or service with no close substitutes. 2. **Monopolistic Competition**:\ A market structure with many sellers offering differentiated products and some control over price. 3. **Oligopoly**:\ A market structure with a few large firms dominating the market, often with significant barriers to entry. 4. **Cartel**:\ A group of firms in an oligopoly that colludes to control prices and limit competition. These definitions are concise, easy to understand, and cover all the essential terms from the Class 12 Microeconomics syllabus. Let me know if you need further explanations or examples!