Concepts Of Economics With Justifications And Examples

• LAW OF DIMINISHING MARGINAL

 This law is fundamental law of economics .It relates to a man's behaviour as a consumer .This law  states that as a man's gets more and more units of commodity marginal utility from each successive unit will go on falling till it becomes zero and negative.

 EXAMPLE:- When I go for blowing for the first time I am very excited or happy to play a game                                but afterwards when I go to play for fourth time i was just bored from that game.

• LAW OF DEMAND

  The law of demand expresses the functional relationship between the price of commodity and its quantity demanded .Its states that the demand of a commodity tends to vary inversely with its price.This implies that the law of demand states -other things remaining constant, a fall in price of commodity will lead to a rise in demand of that commodity and rise in pricewill lead to fall in
demand.

   EXAMPLE:- I prefer to go KFC when it gives discount on price and on that day I see

                        crowd of people because decrease in price leads to increase in demand of  KFC.

• PRODUCTION FUNCTION

   Production function specifies the maximum output that can be produced with a given quantity of input .The relationship between the amount of input required and the amount of output that cane be obtained is called production function.

   EXAMPLE:- The output of fit body depends on exercise ,yoga ,zumba workout ,etc. So, the 

                         relationship between factor inputs(e.g. exercise ,yoga ,zumba workout ,etc) and

                         the output of fit body can be also shown with the help of production function.

• OPPORTUNITY COST

  Opportunity cost is the cost of next best alternative that has been forgone .The opportunity cost of anything is only the next best alternative forgone and not any other alternative.The opportunity cost of good should be viewed as the next best alternative good that can be produced with the same value of the factor which as more or less the same.

 EXAMPLE:- I have only ₹2000 either I can buy one pair of shoes or I can buy two tops .                                          Therefore, the opportunity cost of one pair of shoe is two tops.

• CONSUMER BEHAVIOUR

  Consumer behaviour  shows the behave of consumer ,group or organisation towards the                selection of buying ,using of goods and services to satisfy their needs .Its associated with the purchase use and disposal of good done by consumers.

  EXAMPLE:-I used only biotique products for my skin care it shows that I will select biotique 

                       brand for my preference because it fulfills my need.