CONSUMER’S EQUILIBRIUM

CONSUMER’S EQUILIBRIUM:

           Consumer’s equilibrium or optimum is achieved when consumer ends up on the highest indifference curve possible with his given income. The optimum position is attained at the point where the consumption possibility line (budget line) is just tangent to the highest indifference curve from below.

INFERIOR:

        When with increase in income of a consumer, the demand for a certain good decreases, that good is called inferior good. Inferior of good is in respect of the income of the consumer. It has no relation with physical property of goods. For example, pulses, bread or course cloth are inferior goods. In case inferior good, there is negative relationship between income of a consumer and the quantity demanded of the good, in case of inferior good, the demand curve shifts to the income of the consumer leads to increase in demand for good. In case of normal good, the demand curve shifts to the right.

ZAKAT:

           Zakat is one of the five pillars of Islam. It means purification of soul character and wealth. It is an obligatory payment of certain percentage on a prescribed portion of wealth held b y a Muslim. So it is obligatory on all the Muslim who possesses on amount of wealth prescribed by Shari at.

WELFARE:

     Welfare is the satisfaction derived from the possession of wealth.

WEALTH:

        It means economic goods. It includes physical and financial assets which are owned by an individual or a firm or a nation minus liabilities.

WANTS:

         Human wants are the things which people would buy if  their income were unlimited. These wants also called needs are unlimited. They are also recurrent. They also change overtime.

WAGES:

         Wages are the money payment made for the service of labor for a certain period.

TAX:

        Tax is a compulsory contribution to the public authority for covering the cost of services rendered by it for the general benefit of its people.

VARIABLE COST:

              Variable cost is associated with the level of production. It increase when the level of output is increased and decreases as output is fuel, power charges etc. are variable costs.

UTILITY:

           Utility is the satisfaction which an individual derives from the consumption of a good. it is the want satisfying quality of a commodity. Utility is measured as the number of utile e,g. 5 units of utility.

TOTAL UTILITY:

           Total utility is the total satisfaction which a consumer derives from the consumption of a given amount of good

THEORY OF FACTOR PRICING:

     The theory of factor pricing deals with the determination of share prices of four factors of production i.e. land, labor, capital and enterprise.

TRANSFER EARNING:

       Transfer earning is the amount which a factor must earn if transferred to its second best use.