Archive for category Economics
Micro Economics | Economics Related to Building Industry
Micro Economics Related to Architecture and Engineering
The study of Economics can be broadly classified into two categories:
In this article, we are going to discuss various terms related to Micro Economics. Check out the brief on “Macro Economics and Micro Economics“.
Here is the list of terms we are about to discuss in this article:
- Budget Constraints
- Choice
- Demand and Supply
- Uncertainties
- Equilibrium
- Technical constraints
- Profit maximization
- Cost minimization
- Monopoly
- Oligopoly
- Production
Budget constraints
For individuals, the budget for acquiring property depends in the earning capacity of the family per annum, the ability to raise loan, savings, repaying capacity (in 5year/ 10year/ 15year loan periods).
Choice
Depends on the budgetary capability, savings, willingness to invest, optimum level to spend, location of the property etc, choice of the specifications, reputation of the builders, quality of construction, timely completion of projects, proximity to public amenities like transport, railway station, airport etc.
Read the rest of this Article » » »
Micro Economics and Macro Economics | Engineering Economics
The study of economics is broadly divided into two categories:
In our previous article “Introduction to Building Economics as related to Architecture“, we discussed certain important terms relating to Building Economics. This article is the continuation of the study of Micro Economics and Macro Economics. This article will give you a brief idea of Macro Economics and Micro Economics.
Micro Economics
It is a small part of whole economics which deals with individuals, their needs, their behaviour, individual firms and its activities. This deals with studies like incomes, capital spending on building, individuals who are engaged in various products for building construction.
Micro-economics is also called Price Theory.
Importance of Micro-economics
It analyses how millions of consumers and producers in an economy take decisions about products and services offered. It also deals with how buildings and services are distributed belonging to different economic status.
Limitations
- It cannot give an idea of the function of the economy as a whole.
- It assumes full employment which is a rare phenomenon in developing countries or even developed countries which is quite unrealistic.
Read the rest of this Article » » »
Public Versus Private Participation | General Economics
Public Sector and Private Sector
Public Sector is controlled by government to manufacture Power, Steel, Aluminium, copper, mining etc to provide employment to common man and control the country’s economy.
The Public Sector Unit tends to overstaff resulting in the increase in cost production.
Due to the lack of modernisation, they do not use their surpluses in the form of Capital.
PSU provides employment to the millions of people around the country.
They monopolise the market.
The PSUs could not survive due to so many controls and overruns.
- Navratnas in PSU
- IOC
- Petrochemical Corp. (IPCL)
- ONGC
- BP Corporation. Ltd
- HPCL
- NTPC
- SAIL
- BHEL
- Mahanagar Tele. Nigam Ltd (MTNL)
Read the rest of this Article » » »
Macro Economics | Economics Related to Building Industry
Study of Macro Economics
Study of Economics can be divided into two parts:
In this article, we are going to discuss various terms related to Micro Economics. Check out the brief on “Macro Economics and Micro Economics“.
Here is the list of terms we are about to discuss in this article:
- Demand and supply
- Inflation
- Interest rate
- Employment
- Savings and Investments
- Monetary Policy
- Fiscal Policy
Demand and Supply
At national level, this depends on the government policies. How different building activities and infrastructure are planned and budgeted. Taxation polices, direct and indirect tax, allocation of funds for housing for the weaker sections in Five Year plans.
Inflation
This aspect depends on how effectively the government can control inflation by exercising control over general price rise and building materials, effective tax collection both at central and state level, maintaining equilibrium in demand and supply, earning foreign exchange. The increase in oil prices invariably increase the cost of living in all walks of life including building industry.
Read the rest of this Article » » »
Introduction to Building Economics as related to Architecture
Introduction to Building Economics
Building economics is concerned with production and consumption and services and the analysis of commercial activities –
As it is related to architecture and building activity – all types of buildings for all types of functions by the builders (production) and consumption i.e., the ones who either buy or hire those buildings for various functions with the services offered by professionals like architects, planners, engineers etc.
Ends – scarce means
The scarce means like land, building materials, and allied services result in failing to meet the deman in housing sector.
Basic concept – any activity (legally permitted) which shall result in building activities to serve people for which the people are ready to pay the price directly or indirectly by buying or hiring the spaces can be treated as an economic activity.
Read the rest of this Article » » »
Basic Inputs into Building Construction | Engineering Economics
Building Construction Economics
We will be discussing Inputs into Building Construction in terms of four important factors:
- Land
- Labour
- Capital
- Materials
Land
Marshall defines Land “Land means the materials, and the forces which nature gives us freely for the human beings (other creatures as well), in land, in water, in air, light and Heat”.
- Land is nature’s gift
- Land has no supply price (supply remains same) whether price of land is high or low
- Land is permanent (lack of mobility)
- Land lacks mobility in geographic sense
- Provides infinite variation in fertility, utility, situation etc
Read the rest of this Article » » »
