MICROECONOMICS IN OUR DAY TODAY LIFE

VARIOUS CONCEPT OF MICRO ECONOMICS

PEOPLE FACE TRADE OFFS:

Desire of some attributes in product but missing some attributes, this is were people face trade-offs. Taking decision for an item requires trading off against the another item. Trade off is often termed as opportunity cost, which is the most preferred possible alternatives. A trade off involve a sacrifice that must be made to get a certain product experience.

Examples:

1. I went for shopping took 2 dresses one costing Rs.2000 and the other for Rs.3500, tried those thought of buying both of them, but didn't had so much money to buy, so i had to sacrifice 1 of those dresses.

2. I have a choice for vacation either Goa or Shimla, I cannot travel both the places so, I have to sacrifice one of the places.  

UTILITY

The quality of the goods that satisfies human wants is called utility. Utility is that satisfaction level through a commodity by virtue of which human wants get satisfied. All the economic goods that satisfy human wants they posses utility.

Examples:

1. I went to a Mercedes Benz car show room to buy Mercedes cla costing 32lacs, the features in the car where satisfying my wants so, I spended that much amount of money and bought it, because according to me it was worth spending.

2. I have to buy iphone X, the features in it are satisfying my wants so,I think its worth spending 1lacs on it.

LAW OF DEMAND

The Law of Demand explains the relationship between the price and demand. when the price of a commodity increases the demand for the product decreases and vice versa..

Examples:

1. I went to buy banana which was of Rs.100/kg, I bought 1kg, but when the price decreased to Rs.50/kg I bought 2kg of banana.

2. I use to recharge my data pack once in two months because the rate was very high Rs.600 of 1GB a month, but now now the price decreases for Rs.400 unlimited for 2months so the demand also increased. 

LAW OF SUPPLY

The Law of Supply explains that keeping other things constant ,an increase in price results in increase in quantity supplied. The is direct relation between price and quantity. 

Examples: 

1. I have a vegetable shop once there was a need of onion, even though the price of the onion was high the supply of onion increased , as in the near by shop onions were not available on that day,

INDIFFERENCE CURVE:

Indifference curve connects two curve representing different quantities of two goods at which a consumer is indifferent. Indifference curve shows combination of two goods providing equal utility to the consumer.

Examples:

1. Soap and boby wash both products gives us the same utility but are different in presence. I prefer body wash because it satisfies me more.