Opportunity Cost
The benefits we
give up in order to get something else is called opportunity cost. If you want
something of you want you have to sacrifice something.
B-C=Net
Benefits.
Example: A girl went to
shop to buy ice cream. The ice-cream man offers her 2 flavour vanilla and
chocolate after thinking she choose vanilla flavour. So chocolate flavour ice
cream is her opportunity cost.
People
Response to Incentive
Incentive is an Add-on benefits that induced a person to
act, by giving some rewards who change their behaviour.
Incentives = Price: Quantity (P:Q)
Example: Raj
hotel offer free tea whenever you order food.
Diminishing
Marginal Utility
The more of the good that one contains in a specific period
of time, the less the additional utility derives from an additional unit of
good.
Utility diminishes over time the shorter the time period
the quickly the marginal utility diminishes.
Example:
Rahul
take a challenge of eating 20 gulab jamun he starts eating very fast then other
and finishes 10 gulab jamun in 1min after 10 gulab jamun he started losing his
interest and eaten only 13.
Trade-off
When people think what to buy what not to buy and end up
buying nothing or noy satisfied with his buying is called tradeoff.
Example: A
boy has 500rs he go to the market to buy clothes but he buy books because he
have to study for exam.
Supply
Willingness and ability of the producer to offer the goods
in the market for sales at various prices is called supply.
source Google
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