Economics In Daily Life

Law Of Demand: Other things remaining constant, when the price of a commodity increases the demand of that product decreases.

Examples: There is a milk manufacturing companies naming Amul. Suppose customer A consumes a product of Amul. When the price increases, the consumers decreases using it and may transfer to another product.

People Respond To Incentives: It can be in point of the buyers and sellers. In both cases price and quantity is the main thing.

Examples: When I went to D-Mart, for buying biscuits and snacks. I always go for products which offers low price and the quantity is more, i.e my incentive as a buyer.

Utility: When people derive satisfaction when consumption of any product or service.

Examples: When I bought a MI phone, I was satisfied using it and its features overwhelmed me. The satisfaction I derived using the phone is my utility.

Marginal Utility: Marginal utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service.

Examples: I went to a restaurant for having a pizza and after having the first slice the satisfaction I derive is the marginal utility.

Rational People think at a margin:  People want to derive most for the amount they are spending.

Examples: I went to a shop for buying an apple juice, and Tropicana was offering juice and a biscuit of RS.5, and the total price was RS.99 and Real was offering only juice for Rs.99. I bought Tropicana because it was offering something extra than Real, so as it was offering more I bought it.