Accounting Economics and Business 11 Nov

ACCOUNTING, ECONOMICS &
BUSINESS
AFTERSCHO☺OL
– DEVELOPING CHANGE MAKERS
CENTRE FOR SOCIAL ENTREPRENEURSHIP
PGPSE PROGRAMME –
World’ Most Comprehensive programme in social
entrepreneurship & spiritual entrepreneurship
OPEN FOR ALL FREE FOR ALL
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

ACCOUNTING, ECONOMICS &
BUSINESS
Dr. T.K. Jain.
AFTERSCHO☺OL
Centre for social entrepreneurship
Bikaner M: 9414430763
tkjainbkn@yahoo.co.in
www.afterschool.tk, www.afterschoool.tk
WHAT IS GRESHAM’S LAW?
• Bad currency will throw out good currency
from circulation.

What are the functions of money?
• Store of value
• Exchange value
• Security
• Measurement

Draw production possibility curve
with the following information . .
• There are 2 goods –
one from 0 to 5 and
another from 30 to 0.
if we increase
production of first 0 1 2 3 4 5
from 2 units to 4 units,

what is the
opportunity cost?
• It is 14 units of 2nd
item. 30 28 24 18 10 0

There are two types of products, what is the opportunity cost of
producing 10 units of first unit instead of 0 units?
• Answer 5 units of
0 105
second unit.
10 100
• If we have 30 units of
first and 45 units of 20 90
second unit, would you 30 75
go for it?
• Solution: No as we can 40 55
get 30 + 75 so why
should we go for 30+45. 50 30
answer.
60 0
Solve the following?
• Sudha quit her job at a private company
where she earned Rs. 2,90,000 a year. She
withdrew Rs. 4,00,000 in a savings account
that earned 10% interest annually to buy a
second hand mini bus to commune
passenger between Cannaught Place and
Noida. There arc 1000 passengers who will
pay Rs. 4000 a year each for commuter
services; Rs. 2800 from each passenger goes
for petrol, maintenance, depreciation etc.
Find opportunity cost of Sudha?
• The opportunity cost of Sudha is : Rs.
2,90,000 which she was getting in a
company.

What is the accounting cost of
Sudha?
• The cost is :
• Interest : Rs. 40000
• Plus petrol / diesel / other expenses
• @ 2800 per pessenger (this is variable
expneses = as it depends on route etc.)
• 2800*1000 = 28,00,000 answer.
• Income = 4000*1000
• =4000000 answer.
What is the economic cost of
Sudha?
• Economic cost = opportunity cost +
accounting cost
• = 290000 +2800000 answer.

What should a developing economy
do ?
• It should initially promote heavy industries
– because they can help in providing
infrastructure, basic facilities, services etc.
thus they will create a base for rapid
industrialisation
• It should initially build infrastructure so that
FDI flows in and industries are set up thus
employment generation takes place.

In the previous PPC (production
possibility curve) if production of
second unit is increased from 10 to
24, what is the opportunity cost?
• Two units of first units.

We make DahiBada and cost structure is
as under?
Qty TC FC VC AVC AFC MC TC
0 100
10 210
20 300
30 400
40 540
50 790
60 1060
If price of DahiBada is Rs. 14 each,
what is the best output?
Qty TC FC VC AVC AFC MC TC TR Profit
0 100 0 -100
10 210 140 -70
20 300 280 -20
30 400 420 20
40 540 560 20
50 790 700 -90
60 1060 840 -220

Solution
• The best output is at 30 unit and 40 unit
level. We may explore further and the best
out put may be at 35.

What is VC when 60 DahiBada
are made?
• VC = TC – FC
• =1060 – 100
• =960

A contracts with B to buy jewellery
made of pearls whereas in fact it IS
made of imitation pearls of no
value. B knows that A is mistaken
and takes no steps to correct the
error. NOW A wants to cancel the
contract on the basis of fraud. what
should he do?
Solution
• There is no proof that B had committed
fraud. He didn’t give any false information.
Let the buyer beware – and therefore it
was the duty of A to inquire about the
product.

what is AFC?
• Average fixed Cost
• = Total fixed cost / total number of units
manufactured
• Suppose total fixed cost is Rs. 500, and
we have made 200 units, the AFC is 2.5
• If suppose we make 500 units AFC will
come down to only Re. 1.

If this is the cost schedule, what is the AFC
& AVC when we make 6 units?

Solution
• Fixed cost = 240
• 240/6 = 40 per unit. (AFC)
• AVC = TotalVariable cost / Total no. of
units
• Variable cost = TC – FC
• =690 – 240 = 450
• AVC = 450 / 6 = 75 per unit answer.

What will happen if utility obtained
in first unit is 10, 2nd unit 7, 3rd unit
3, and 4th unit = -4. show total utility

In the previous question, how
many units will the consumer
consume and what will be his total
utility?
• The consumer will consumer 3 units and
his total utility will be 20. (the consumer
will not use fourth unit). Marginal utility will
be 3 at that time.

When do you find marginal return diminishing?
units TC
0 240
1 330
2 410
3 480
4 540
5 610
6 690
Solution
units TC MC
0 240
1 330 90
2 410 80
3 480 70
4 540 60
5 610 70
6 690 80
Solution …
• As in the previous graph we can see that
the marginal cost (MC) is reducing initially
- but it starts increasing when we make 5th
unit. Marginal returns decrease when MC
starts increasing. Thus marginal returns
start decreasing from 5th unit. Answer.

What do you understand by
equilibrium of a firm? Explain your
answer.
• The firm is said to be in equilibrium when

MR = MC. There are different market
conditions like perfect market, monopoly
or monopolistic competition, in each of
these conditions the equilibrium is when
MR = MC and MC curve cuts from below.

Example:
EQUILIBRIUM
OF THE FIRM

Clarify the statement that a firm
is a price taker under perfect
competition but not so in monopoly
or monopolistic competition. Give
reasons for your
answer.
• In perfect market, the prices are
determined purely by industry and not by
individual firm. The firm has no role in
price decision. There are very large
number of firms and no firm can alone
influence price.
Illustration . .as we can see in the graph below :
(there are different firms, each trying to match
industry..

Detailed explanation
• Perfect market is the market condition
where the aggregate demand and
aggregate supply decide the price. Purely
the market forces work (all the goods are
homogenous) and they determine price,
which has to be followed by the firms.

Graph of perfect market.

Explain the concept of optimum
output. Under what conditions is it
achieved by a firm ?
• Optimum output can be achieved in the

long run. In short run the firm can only
vary only one factor = labour. It cannot
change the other factor of production.
Thus in short run only one factor is
variable.
• MC curve of the firm is also taken as
supply curve AFTERSCHO☺OL's
www.afterschoool.tk
for the firm.
MATERIAL FOR PGPSE PARTICIPANTS
Solution
• Optimum output is achieved when the firm
is having MC = MR and has minimum cost
of production. It is the condition when the
firm is able to use its resources to the
best. Conditions:
• MR = MC
• The factors of production can be adjusted
to have the best utilisation of factors of
production.
Graph

What will happen if prices increase
and income of the people also
increase. Presently you are at 1.

Solution
• If price increase, demand should fall,
however, income also increase therefore
demand curve will again increase thus
demand curve will remain constant.
Supply curve will remain as it is (as there
is no information about cost or supply).
We will remain at 1.
• Answer.

Explain the determination of long
term equilibrium of a firm under
perfect competition. Show, inter
alia, that it will produce at the least
possible average
cost of production.
• In the long run, no firm is able to earn
super normal profit. The MR= AR and at
this point MR = MC (equilibrium) and in
long run MC = AC (at the point of
equilibrium) – no firm earning profit / loss.
Graph…

A shopkeeper sells gel pen at Rs. 10 per pen.
At this price he can sell 120 per month.
After some time, he raises the price to Rs. 15
per pen. Following the price rise:
• Only 60 pens were sold every month.
• The number of refills bought went down from
200 to 150.
• The number of ink pen customers bought
went up from 90 to 180 per month.
The Cross elasticity of monthly demand for

refills when the price of gel pen increase from
Rs. 10 to Rs.15 is equal to:

Solution
• Change in demand / change in price
• Change in demand =
• = 50/200 *100 = 25%
• Change in price = 5/10*100 = 50%
• Thus solution = 25/50 = - .5 answer.
• (it is always negative)

The cross elasticity of monthly
demand for ink pen when the price
of gel pen increases from Rs.10 to
Rs. 15 is equal to:
• Change in demand / change in price
• Change in demand =
• = 90/90 *100 = 100%
• Change in price = 5/10*100 = 50%
• Thus solution = 100/50 = 2 answer.
• (it is always positive)
ABOUT AFTERSCHO☺OL
Afterschoool conducts three year integrated PGPSE
(after class 12th along with IAS / CA / CS) and 18
month PGPSE (Post Graduate Programme in Social
Entrepreneurship) along with preparation for CS / CFP /
CFA /CMA / FRM. This course is also available online
also. It also conducts workshops on social
entrepreneurship in schools and colleges all over India –
start social entrepreneurship club in your institution
today with the help from afterschoool and help us in
developing society.

Why such a programme?
• To promote people to take up entrepreneurship
and help develop the society
• To enable people to take up franchising and
other such options to start a business / social
development project
• To enable people to take up social development
as their mission
• To enable people to promote spirituality and
positive thinking in the world

Who are our supporters?
• Afterschoolians, our past beneficiaries,
entrepreneurs and social entrepreneurs
are supporting us.
• You can also support us – not necessarily
by money – but by being promotor of our
concept and our ideas.

About AFTERSCHO☺OL PGPSE – the
best programme for developing great
entrepreneurs
• Most flexible, adaptive but rigorous programme
• Available in distance learning mode
• Case study focused- latest cases
• Industry oriented practical curriculum
• Designed to make you entrepreneurs – not just
an employee
• Option to take up part time job – so earn while
you learn
• The only absolutely free course on internet
Workshops from
AFTERSCHO☺OL
• IIF, Delhi
• CIPS, Jaipur
• ICSI Hyderabad Branch
• Gyan Vihar, Jaipur
• Apex Institute of Management, Jaipur
• Aravali Institute of Management, Jodhpur
• Xavier Institute of Management, Bhubaneshwar
• Pacific Institute, Udaipur
• Engineering College, Hyderabad

Flexible Specialisations:
• Spiritualising business and society
• Rural development and transformation
• HRD and Education, Social Development
• NGO and voluntary work
• Investment analysis,microfinance and inclusion
• Retail sector, BPO, KPO
• Accounting & Information system (with CA / CS /CMA)
• Hospital management and Health care
• Hospitality sector and culture and heritage
• Other sectors of high growth, high technology and social
relevance

Salient features:
• The only programme of its kind (in the whole world)
• No publicity and low profile course
• For those who want to achieve success in life – not just a
degree
• Flexible – you may stay for a month and continue the rest of
the education by distance mode. / you may attend weekend
classes
• Scholarships for those from poor economic background
• Latest and constantly changing curriculum – keeping pace
with the time
• Placement for those who are interested
• Admissions open throughout the year
• Latest and most advanced technologies, books and study
material

Components
• Pedagogy curriculum and approach based on IIM Ahmedabad and ISB
Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad)
• Meditation, spiritualisation, and self development
• EsGotitial softwares for business
• Business plan, Research projects
• Participation in conferences / seminars
• Workshops on leadership, team building etc.
• Written submissions of research projects/articles / papers
• Interview of entrepreneurs, writing biographies of entrepreneurs
• Editing of journals / newsletters
• Consultancy / research projects
• Assignments, communication skill workshops
• Participation in conferences and seminars
• Group discussions, mock interviews, self development diaryng
• Mind Power Training & writing workshop (by Dr. T.K.Jain)

Pedagogy
• Case analysis,
• Articles from Harvard Business Review
• Quiz, seminars, workshops, games,
• Visits to entrepreneurs and industrial visits
• PreGotitations, Latest audio-visuals
• Group discussions and group projects
• Periodic self assessment
• Mentoring and counselling
• Study exchange programme (with institutions out of
India)
• Rural development / Social welfare projects
Branches
• AFTERSCHO☺OL will shortly open its
branches in important cities in India
including Delhi, Kota, Mumbai, Gurgaon
and other important cities.
Afterschooolians will be responsible for
managing and developing these branches
– and for promoting social entrepreneurs.

Case Studies
• We want to write case studies on social
entrepreneurs, first generation
entrepreneurs, ethical entrepreneurs.
Please help us in this process. Help us to
be in touch with entrepreneurs, so that we
may develop entrepreneurs.

Basic values at AFTERSCHO☺OL
• Share to learn more
• Interact to develop yourself
• Fear is your worst enemy
• Make mistakes to learn
• Study & discuss in a group
• Criticism is the healthy route to mutual support
and help
• Ask fundamental questions : why, when, how &
where?
• Embrace change – and compete with yourself
only
www.afterschoool.tk
social entrepreneurship for better
society

Accounting Economics and Business 11 Nov

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Accounting Economics and Business 11 Nov

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ACCOUNTING, ECONOMICS &

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

from 2 units to 4 units,

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www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

• Two units of first units.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

10 210 140 -70

20 300 280 -20

50 790 700 -90

60 1060 840 -220

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

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• The firm is said to be in equilibrium when

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• Optimum output can be achieved in the

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www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

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The Cross elasticity of monthly demand for

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www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

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www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

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