Economic concepts in our lives

Law of Demand

Do you think that If a vegetable vendor sells his items at a cost less than his competitor’s (but still maintains his profit margin), will he be able to take advantage?

The answer is a yes, he will be able to take advantage and sell more than others, we can relate this to the ”Law of Demand”. As the price of the items of the concerned vegetable vendor goes down the demand for his products goes up.

Changing Tastes and Preferences

When I was a kid I loved to watch cartoon, as I grew up my interest shifted from cartoon to friction serials, and gradually when I started having less spar time, my interest moved to movies, and I also found them more convenient.Finally now I watch short skits, short films and s mall stand-up comedy routines as a source of entertainment. These incidents can be related to the concept of ”Changing Tastes and Preferences of Consumers”.

Law of Diminishing Marginal Utility

I did my graduation in Kolkata and one or twice a month, while returning home from college, I used to visit The Victoria Memorial which was on the way. Initially I really liked visiting the place, but as time passed by, the satisfaction I derived from an additional visit went on decreasing. This happened because of “The Law of Diminishing Marginal Utility”.

Opportunity Cost

During one of my aunt’s engagement ceremony ,I and my family had to go to Delhi. We had the option of going by train or by boarding a flight. I really love the feeling of travelling by train, but on that journey we had selected the option of boarding a flight as a lot of time would be saved. This loss of the experience of a train journey in order to spend more time during the engagement by boarding a flight is called as the “Opportunity Cost”,

People respond to incentive

This often happens with me during shopping. Once during such an encounter I was shopping at an outlet looking out for casual t-shirts. The price quoted per t-shirt was Rs.700, but there was another offer stating that if I would buy three t-shirts, the overall discounted price would come down to Rs400 per t-shirt. After looking at the offer I instantly made a decision of purchasing . This change in my decision happened because “People  Respond to Incentives”.