Price Elasticity of Demand (PED) measures how much the quantity demanded of a product changes when its price changes

Formula

PED= %CHANGE IN QUANTITY DEMANDED

% CHANGE IN PRICE

if the

price ⬆ demand ⬇

Microeconomics (Individual Level)

It studies the economic behavior of individuals, households, and firms.

Topics in Microeconomics

• Demand

• Supply

• Price determination

Objectives of Economics

The objectives of economics are the goals that an economy tries to achieve to improve the standard of living of people.

1. Economic Growth

• To increase the production of goods and services in a country.

• Higher production leads to higher income and better living standards.

2. Full Employment

Levels of Government: Local, National and International

Government exists at different levels because one authority cannot manage everything from a small village to the whole world. Each level has its own responsibilities and helps people in different ways.

1. Local Government

Local government looks after the needs of a particular village, town, or city. It works closely with people and solves local problems.

Functions:

• Maintains roads and street lights

The role of government is to organize society, maintain order, and promote the welfare of its citizens. Key functions include:

1. Maintaining Law and Order – Making and enforcing laws, protecting citizens, and ensuring justice through courts and police.

2. Providing Security – Defending the country from external threats through armed forces and ensuring internal security.

3. Protecting Rights and Freedoms – Safeguarding citizens' fundamental rights and ensuring equal treatment under the law.

4. Providing Public Services – Offering essential services such as education, healthcare, transportation, water supply, and sanitation.

5. Economic Management – Regulating businesses, collecting taxes, creating employment opportunities, controlling inflation, and promoting economic growth.

Definition:Merging (or merger) is the process in which two or more businesses combine to form one single business organization.

Why do businesses merge?

• To grow bigger.

• To reduce competition.

• To increase profits.

• To share resources and technology.

🔹 Meaning

Economics is important because it helps us understand how money, goods, and services work in daily life and society.

🔹 Key Points Explained

1. Used in daily life

   We use economic ideas like:

   • Goods (things we buy)