Engineering

Economics And

Management

Basic Economics
Problems
Introduction
Types of Economics Problems
Meaning & remedies of listed types

Introduction
Problems related to economy are termed
as Economic problem.
Economic problem is an integration of
four parts:
1. Problem of allocation of resources
2. Problem of full- utilization of resources
3. Problem of economical efficiency
4. Problem of economical growth

Different types of Basic economics

problems are as follow :
1. Poverty
2. Unemployment
3. Inflation

Poverty
As per the United Nations, Poverty is
fundamentally a denial of choices and
opportunities, and a violation of human dignity. It
means lack of basic capacity to participate
effectively in society. It means not having enough
to feed and clothe a family, not having a school or
clinic to go to, not having the land on which to
grow ones food or a job to earn ones living, not
having access to credit. It means insecurity,
powerlessness and exclusion of individuals,
households and communities. It means
susceptibility to violence, and it often implies living
on marginal or fragile environments, without
access to clean water or sanitation.
Povertyis general scarcity ordeath ,or the state

Poverty line
To measure the poverty , a central indicator in income and
consumption is defined , which is known as the poverty
line.
It is critical value below which an individual or household is
determined to the poor.
In India, the Minimum Calories intake of a Person has been
put at 2,400 in Rural Area & 2,100 in Urban Areas.
To convert this Calorie intake based Poverty Line into a
Monetary Measure of Poverty, the Cost of Minimum
Consumption Requirements of Food providing the
minimum calories is calculated at prevailing Price.
Thus, Government defined a Person with an Income of
Less than Rs.368 (Rural) & Rs.559 (Urban) per month as
living below Poverty Line.

Statistical Facts On
Poverty

Almost half of the world over 3 billion people

live on less than $2.50 a day.
According to UNICEF, 22,000 children die each
day due to poverty.
Nearly a billion people entered the 21st century
unable to read a book or sign their names.
Less than one per cent of what the world spent
every year on weapons was needed to put
every child into school by the year 2000 and
yet it didnt happen.

Absolute povertyrefers
Relative Poverty Absolute
Poverty
to a condition where a
Relative Poverty refers to the
Income or Asset Position of
one Class or Group of People
in comparison with the other
Classes or Groups, or of one
Individual
visavis
the
Others.
The essential point here is
that Poverty of One is
Relative to the Richness of
the other.
For Example, an Average
Middle Class Person is Poor
when compared to the Upper
Middle Class Person, who in
turn, may be poorer than the
Richer Person and so on.

person does not have

the minimum amount of
income needed to meet
the
minimum
requirements for one or
more basic living needs
over an extended period
of time.
It not only depends on
income but also depends
on services which are
needed.
For Example , People
below poverty line are
facing absolute poverty
and do not have enough
money to buy which is

Causes Of Poverty
1.
2.
3.
4.
5.
6.

Unemployment
Corruption
High population growth
Inflation
Land inequality and social justice
Less priority to agriculture sector by
Government
7. Neglecting the poor once
8. Lack of decent housing
9. Health among the main cause of poverty in India

Measures to Reduce
Poverty

1.
2.
3.
4.

Employment opportunities
Uplift of agriculture
Education
Establishment of Small Scale
Industries
5. Reduce Inflation
6. Proper Utilization Of Resources
7. Check Population Growth