The principal problem of economics is the integrated study of the activities of consumption, production and distribution. The agent that undertakes consumption activity is known as the consumer and the agent involved in production is the producer. Distribution is principally the responsibility of government. In reference to the total social system that we have studied in Chapter 2, consumption and production activities are endowed to all sub-systems in their own ways. Distributive activity is endowed to the benevolent and integrative sub-systems. Since we are interested in the integrative sub-system in our economic study, therefore, we will study these activities in the light of preferences generated in this sub-system. Yet by our earlier explanation, the integrative preferences encompass the preferences of the benevolent and malevolent sub-systems in an equilibrating way, thus establishing social consensus at large. Hence, our integrated study of the principal activities of consumption, production and distribution can look at these within a pure economic and an institutional approach with a flavour of socio-economic equilibrium.
KeywordsPrice Level Demand Function Demand Curve Supply Function Supply Curve
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