Economics mainly depends on the behaviour and the theories and ideologies based on those behaviour and around the behaviour.
When you study interaction between two people or a small group of people all this is called microeconomics. Ground level or small interaction is related to microeconomics. for example employees interaction with managers or interaction between a group of workers. Microeconomics deals with internal view.
Top down view or external view can be called as macroeconomics. ( Bird eye view )
Foundation principles of Economics :-
1.People face trade-offs – ( what to buy what not to buy ) as simple as a shopping experience, are going to watch a movie. when we can't decide what we should do so we trade-off and choose our choice of what we should do. Not deciding in a situation and trading of to a suitable situation is trade of how would you not exercise the situation for resolving trade-offs we approach for apply or cost benefit analysis.
For applying cost benefit analysis we need to find a boat cost and find out the benefits.
2.The cost of something is what you give up to get it :- Sacrifice you make is the cost you obtain for it. The cost of the next best alternative ( opportunity cost )
3.Rational people think at margin :- It means to think about your next step beforehand. The word marginal means additional.For example A guy goes with a budget of ₹ 10000 to a mobile store but instead he takes a phone worth ₹12000.
4.People respond to incentives :- if a person needs to sell his products he needs to provide incentive because people are always looking for incentives and where the incentives or discount or value is good they will respond to that . If we do not offer incentives then people can shift to the place where incentives are being offered. Incentives can be both monetary and non-monetary
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