ECONOMICS

Hello everyone, I hope you are doing well. Well I am again back with some concepts of Economics. This time I will be giving some general examples, and we will find economics concepts in those examples. Economics is all around us, what we have to do is identify them. So let get started.

1^st- Suppose, you mother purchase vegetables daily, say you take potato daily (1kg @40). Now if price of potato got down, what you mother normally do. (take a movement and think). Of course she will purchase more in given price.

So are you able to find any economic concepts in above examples.

Let me tell you, that example is based on LAW OF DEMAND.

LAW OF DEMAND says, when price of a product decrease, quantity demand of that particular product decrease and visa-versa.

2^nd- Me and my friend went for dinner last Saturday, we ordered chicken and noodles.

But my friend ate chicken more than noodles.

So which economics concept above example make you remind.

Its INDEFFERENCE CURVE

In order to consume one product more, we need to reduce consumption of other product. (here both product give same level of satisfaction)

3^rd-  samosha is my every time favourite, one day i went to eat samosha at a shop, I ate first samosha, it was yummy I got higher level of satisfaction. But as I kept eating my level of satisfaction start decreasing and a point came where I stopped eating.

This example is about LAW OF DIMINISHING MARGINAL UTILITY

When a consumer keep consuming a particular product, satisfaction derived from each additional unit get reduce.

4^th-  I still remember that day when I was in D-Mart, I was shopping for my house. i showed fair handsome packet and deo was free with that packet. I immediately bought that packet.

This examples is about PEOPLE RESPONDE TO INCENTIVES

When a consumer get extra thing with limited money they response quickly.

5^th-  Last sunday i missed to go for dinner at santripti at time, so decided to go grocery to eat somethings. i had 50 rupees with me that time and i decided to spend total money.
so instead of purchasing same things i went for different items, which had same marginal utility for me. hence i spend my total money and i got higher satisfaction.

LAW OF EQUE-MARGINAL UTILITY

According to Alfred Marshal,"if a person has thing which he can put in two uses,then he will divide between both in such way that it has same marginal utility in all.

In simple words we cam can say, when get a chance to purchases two or more things we usually purchases in such way that we get same  satisfaction in all.