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  1.What is an indifference map? What an indifference map indicates? An indifference map is the collection of indifference curves possessed by an individual. To describe a person’s preferences for all combinations of two goods i.e food and clothing, we can graph a set of indifference curves called an indifference map (Figure B12). Each indifference curve in the map shows the market baskets among which the person is indifferent. The graph below shows three indifference curves that form part of an indifference map (the entire map includes an infinite number of such curves). Indifference curve U3 generates the highest level of satisfaction, followed by indifference curves U2 and U1. indifference map 2. What are the four basic assumptions about individual preferences? Explain the significance or meaning of each. (1) Preferences are complete: this means that the consumer is able to compare and rank all possible baskets of goods and services. (2) Preferences are transitive: this means ...

  2. Scarcity brings in the problem of choice’- Explain. Our resources are limited; however, desires are unlimited. Economics is concerned about how to meet our unlimited desires with limited resources. We would always like more and better housing, more and better education more and better of practically everything. If our resources were also unlimited, we could say yes to each of our wants and there would be no  economics. Because our resources are limited, we cannot say yes to everything. To say yes to one  thing requires that we say no to another. Whether we like it or not, we must make choices.  Our unlimited wants are continually colliding with the limits of our resources, forcing us to pick  some activities and reject others. Scarcity is the condition of having to choose among alternatives.  A scarce good is one for which the choice of one alternative use of the good requires that another  be given up.  A free good is one for which the cho...

Defining Economics  Economics analyzes human behaviour scientifically. It explores the economic interactions between consumers and producers. Economics evolves continuously as current observations and experience provide new evidence about economic behaviour and relationships. Economics examines how people choose among the alternatives available to them. It is social because it involves people and their behaviour. It is a science because it uses, as much as possible, a scientific approach in its investigation of choices. Adam Smith, who is regarded as Father of Economics. He defined economics as “a science which inquires into the nature and cause of wealth of nations”. • He emphasized the production and growth of wealth as the subject matter of economics. 1.Meaning: Microeconomics is the branch of Economics that is related to the study of individual, household and firm’s behaviour in decision making and allocation of the resources. It comprises markets of goods and services and ...

  Reading Materials JAIBB Governance in Financial Institutions (GFI) Monetary and Financial System (MAFS) Principles of Economics (POE) Laws and Practice of General Banking (LPGB) Organization Management (OM) Business Communication in Financial Institutions (BCFI)