Suppose you have a budget of Rs. 10 per week. You can spend your money on potatoes at Rs. 2 per kg or tomatoes at Rs. 1 per kg or on some combination of the two. The consumption opportunity line or budget line shows all possible combinations.
Each point in the diagram stands for a basket of meat and ghee (cooking oil) A, B, C, D are all baskets among which a certain consumer is indifferent. All give equal utility. These points and all others on a smooth curve connecting them constitute an indifference set. An indifference curve is a graphical representation of an indifferent set. Indifference curve properties are:
Capitalism is that part of economic systems where productions are owned and managed by private individuals and institutions. They are at liberty to use any technique of production and produce anything they like. In capitalism, State is to take care of only internal and external security of the country.
International politics may be defined as “the pattern of political interaction between and among states.” Interaction in the international system ranges from conflict to co-operation. At one extreme is pure conflict as when the interests of non-state actors are opposed. If one actor realized its goals, the other can not achieve its objectives.
Political concerns shape economics policies oriented policies are economic oriented. It has become an explicit tool of national strategic and diplomatic policy.Oil embargo of 1973 by Arab was to pressurize European countries to maintain good relations with Arab world France applied an embargo to weaken UK during Napoleonic wars
In this modern geo-economic world, economics is the battle field for political conflicts. Through out the modern history production, distribution and consumption have been affected by diplomatic and strategic factors. During 15th and 18th Centuries (Mercantilist period), economics interaction had two principal political characteristics.
The interaction of politics and economics is an old theme in the study of international relations. From 17th century mercantilists to 20th century Marxists students of relations among states deal with the problems of international political economy age, any kind of separation between them is impossible.
Indifference curve adopted the concept of ordinal utility instead of cardinal utility. Indifference curve implies that the consumer is capable of simply comparing different levels of satisfaction. Indifference curve approach, as presented by Hicks-Allen is the basic tool of ordinal analysis of demand.