Few principles of economics we come across daily

There are some principles of economics that we come across daily, in one way or the other. They are unavoidable, like the following:

People face trade-offs

We all have heard of the phrase, "there is no such thing as a free lunch" i.e. ,to get one thing, we have to give up something else. Lets go back to our childhood days, when we use to get just ₹10 as pocket money.We would spend hours thinking if we want that new Chacha Chowdhary comic book or want to spend it on the game store, playing games using it. That was a trade-off. If we bought the comic we had to sacrifice the game and if we chose the game we had to sacrifice the comic book.

Another example could be from the shopoholic people. We all have that one friend who can shop all day long and has major difficulties in choosing between an expensive dress and her savings. If she gets the dress, her savings get disturbed and if she looks after her savings, her heart is broken. Obviously, the dress wins majority times which is a different aspect.

Rational people think at the margin

Rational people are the ones who purposefully do the best they can in order to achieve the best of their objective. And margin is the small increment we make in a plan of action to get the best we can.
Many of us think marginally. For example, when a tournament rolls around, a professional badminton player like PV Sindhu would go for an extra hour of practice. That extra hour is the margin she will incorporate to her 3 hours of training. Lets take another example, a person who is working in a BPO has a choice of finishing the target or work extra and go beyond the the target given to him.

Demand

Demand is the amount of good that a buyer is willing and is able to purchase. One of the most important determinant of demand is the price of the good. For example, when the price of potatoes go down, we fill our places with 2-3 kgs of potatoes, i.e. as the price decreases the demand increases.
And when the price goes up, we try our best to avoid the healthy vegetable, i.e. as the price increases, demand increases. Another example is the cosmetics we use, like the face cream. As the price increases, people shift to another brand face cream, therefore, reducing the demand.

Supply

Supply is the amount of good that sellers are willing and are able to sell. One of the most important determinant of supply is the price of the good. For example, when Honda launches a new bike model, the availability of that model is less and demand is more. This increases the price of the bike, i.e. with increase in demand the price also increases. This was from buyer's perspective. Lets have a look at the law of supply from seller's side. If the cost of the bike lowers down, he will not sell the bike model at all. But as the price of the model rises, the seller starts to sell it again. i.e. with increase in price, the quantity of demand increases.

Elasticity

Elasticity is the measure of responsiveness of demand to a change in one of its determinants. The price elasticity of demand measures how much the quantity demanded responds to a change in price. If the demand of the good changes with the change in price, the good is said to be elastic. And if there is slight change in demand with change in price, the good is said to be inelastic.
We all love shopping when there are exciting discounts available in our favorite outlets. We tend to buy more than required just because it fits in our pocket. Thus, the clothes are said to be elastic, as with reduction in price, quantity demanded increases.
Lets look at an example of inelastic goods. Imagine how our food will taste without salt, tasteless. Thus, salt is a necessity for everyone. Now, no matter how much the cost of salt changes, goes up or down, its demand will remain constant.

Marginal Utility

Marginal Utility is the additional benefit which a person derives from a given increase in the stock that he already has. Take example of the family dinners we all enjoy. After a delicious meal if the restaurant gives us a complimentary dessert, we get a bit of additional satisfaction which is marginal utility. To take another example, think of the situation when you go to buy a new phone. If the shopkeeper gives you free accessories, you will get additional satisfaction of cost benefits.