Saturday, August 11, 2018

5 concepts of economics

Demand is the quantities of a commodity or a service that people are willing and able to buy at various prices over a given period of time.
E.g: 1.few months ago due to low low production of tomatoes the price of tomatoes grew and the demand decreased.

2.The price of Airtel offers grew after introducing 4g so the demand of Airtel went down.


Supply is the amount of something that consumers provides of financial assets and are willing to provide the market place.
E.g:1. when the prices of onions went down the producers stopped the supply and waited till the price grew.

2.When the price of petroleum went down the producers stopped the supply and waited till the price grew.


Elasticity is a measure of the sensitivity of one variable to another.
E.g:1.when the price of tea increases the demand of coffee goes up because we can substitute tea with coffee.

2.When the price of sugar increases the demand of gur goes up because we can substitute sugar with gur.


Utility is the satisfaction derived by the consumer from the consumption of a good.
E.g:1. last night my friend Preety was hungry so she went to near by restaurant and ate biriyani and satisfied her hunger.

2.During festival we buy new cloths to satisfy our needs.


Consumer surplus is defined as the difference between the total amount that consumers are willing to pay for a good and the total amount they actually do pay.
E.g:1.when I went shopping for my sister’s wedding I saw a dress which I liked but the price of the dress was 2500 but I was willing to pay only 1800 so I started bargaining it for 1000 ta and finally the seller sold me the dress for 1500 rs, so the difference between 1800 - 1500 is my consumer surplus.

2.I am a student of IBA so on Saturday night I  went to dinner at NH209 with a budget of 500 rs. But when I reacheed their I got to know that IBA students are getting 10% on Saturday night dinners so after having my dinner the bill was 500 but I had to pay 400for the discount so the difference between 500 - 400 is my consumer surplus.

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