 Welcome to the session of microeconomics and the microeconomics. These are the learning outcome of the session. Before proceeding, let me ask you one question. What are the fundamental questions of the economics? You can pause the video, think about the question, write down your answer in your notebook. In order to see the answer, you can resume the video after writing the answer. So there are three choice problems have become three central problems of the economy. What to produce, how to produce and for whom to produce. The microeconomics. The microeconomics is a subsection of the economics that places attention to the behavior of individual within the market. It has been defined as the branch where the unit of study is an individual firm or the household. It studies how the individual make their choices about what to produce, how to produce and for whom to produce and what price to charge. It is also known as the price theory and is the main source of concept and analytical tool for managerial decision making. The various microeconomic concepts such as demand supply, elasticity of demand supply, marginal cost, the various market forms, etc are the great significance of the managerial economics. The microeconomics also engages with the idea of scarcity, quite often scarcity means a limited availability of the resources. The use of the microeconomics. As purely normative science, the microeconomics does not try to explain what should happen in the market. Instead of that, microeconomics only explain what to expect if the certain conditions changes. If the manufacturer raises the prices of the car, the microeconomics says that the consumer will tend to buy fewer cars than before. If the major copper mine collapse in the South Africa, the prices of the copper will tend to increase because of the supply is restricted. So what is the marginal utility? The marginal utility quantifies the added satisfaction that consumer garners from the consuming additional units of the goods and the services. The concept of marginal utility is used by the economics to determine how much of the item consumers are willing to purchase. The positive marginal utility occurs when the consumption of an additional item increases the total utility. While the negative marginal utility occurs when the consumption of an additional item decreases the total utility. How the marginal utility works? Economics has utilized the concept of marginal utility to gauge this how satisfaction levels affect the consumer decisions. Economics also have identified the concept known as the law of diminishing marginal utility which described how the first unit of the consumption of the goods or the services carries more utility than the subsequent units. These are the multiple kinds of the marginal utility. There are three most common ones which are as follows. A zero marginal utility, positive marginal utility and the negative marginal utility. A zero marginal utility is when having more of an item breaks no extra major of the satisfaction. For example, if you receive two copies of the same issues of the magazine that extra copy has a little added value to it. A positive marginal utility is when buying an extra version of an item is satisfying. For example, one such example could be a store promotion where the customer can walk out with the free pairs of the shoes if they buy two pairs of the shoes. Negative marginal utility is where too much of an item actually detrimental. For an example, while correct dose of the antibiotics can kill harmful bacteria, too much can also harm the person's body. So, under that condition the marginal utility will be negative. So, what is the equimarginal principle? The equimarginal principle is an important idea in economic subfield of the managerial economics. It is also known as equimarginal principle or a principle of the maximum satisfaction. The equimarginal principle state that the consumer will choose a combination of various goods in order to achieve the maximum total utility. In other words, the consumer will allocate spending their income across the goods or the services so that the marginal utility per dollar or rupees of the expenditure on the final unit of the each good purchase will be equal to the all other goods which are purchased. It explains the way in which the customer will spend a portion of their income across the variety of different goods in such a way that in order to maximize the overall satisfaction, it can be described like the marginal utility of the A divided by the price of the A equal to the marginal utility of the B divided by the price of the B. So, according to the equimarginal principle, when the consumer is making a purchase decision, they will consider both marginal utility of the goods along with the price of the goods. Taking both of this into the consideration, they will make a decision that balances each other. Let us see the macroeconomics. As the name implies, the macroeconomics look at the bigger picture. The macroeconomic is a study of entire economics and the economic system especially which is considered under the broad economic aggregates such as domestic product, economic growth, national income, employment, unemployment, inflation and the international trades. In general, the topic covered in the macroeconomics are concern with the economic environment within which the firm managers operate. For the most part, the macroeconomic focuses on the variables over which the managerial decision makers has little or no control, but may be considerably important in the making of economic decision at the micro level that is individual firms or organization or at the industrial level. The macroeconomic is a study of the aggregate economic behavior. The macroeconomic is a study of behavior of the national, regional economy as a whole. It is concerned with the understanding of economic wide events such as total amount of the goods and the services produced, the level of unemployment and the general behavior of the prices. Unlike the microeconomic which studies the individual economic as a actor such as the consumers and the firms make the decisions, the macroeconomic concerned itself with the aggregate outcome of these decisions. For that reason, in addition to using the tools of microeconomics such as a supply and the demand analysis, microeconomics also utilizes the tools such as gross domestic product, unemployment rate, the consumer price index to study the larger scale analysis of financial decisions. So, the microeconomics and the microeconomics if you consider, the microeconomics deals with the demand supply in between the individuals which are consumers, buyers and the vendors. Whereas, the microeconomics concerned with the total economical environment which includes a studies which is related to the local, national, regional and the global economics. So, the microeconomics deals with a study of entire economy. It consider the factors such as government policies, business cycles, national income, etc. Whereas, the microeconomics include the analysis of the small individual units of the economics such as individual firms, individual industries or the single individual person. So, let us see what is the gross domestic product. The gross domestic product is also called as a GDP. The gross domestic product is a total monetary or the market value of all finished goods and the services produced within the country borders in a specific time period as a broad major of the overall domestic production. It functions as a comprehensive scorecard of the given countries economic health condition. So, the GDP or the gross domestic product is a monetary value of all finished goods and the services within the country during the specific time period. GDP provides us the economical snapshot of the country and it is used to estimate the size of the economy and growth rate. The GDP can be calculated in three ways. Using the expenditure, production or income, it can be adjusted for the inflation, population to provide the deeper insight. Though it has a limitation, the GDP is a key tool to guide the investor's business in a strategic decision making policy. So, what is the consumer price index? The consumer price index measure the average change in the price over the time that consumer pay for the basket of the goods and the services. CPI is a most widely used a measure of the inflation by proxy of the effectiveness of the government's economical policy. The CPI that is a consumer price index is a statistics over the professionals, self-employed, poor, unemployed, retired people in the country, but exclude the non-metro or the rural populations, farm families, armed forces, the people serving in the prison and those which are present in the mental hospital. So, there are two factors CPIW and the CPIU. A CPIW measures the consumer price index for the urban wage earners whereas, the CPIU is the consumer price index for the urban customers. These are the references of the session. Thank you.