Law of diminishing marginal utility:
As a customer consumes more and more units of particular
commodity, the utility for every successive unit derived from it goes on
diminishing.
Example: on winter, I started taking creatine supplement at
first I had 1 scoop but after 3 scoop my satisfaction from it starts decreasing
.
People face trade offs :
It defines as to get something or fulfil a need we have to
give up something we like inreturn. We have to sacrifice the most liked thing
in order to get another one.
Example: one day
I went to buy shoes in the market. there was a pair of puma shoe of 3000 and
others were also in a range of 3000 but their quality was not that good so, I
choose puma shoe for 3000.
Law of supply:
When the cost of good or product rises(increase), other
various things remaining the same, its quantity also rises which is for sale
and when the cost of product falls respectively its quantity for sale also
falls(decreases).
Example: during
rainy season I have gone to purchase umbrella it cost me little high because
when the supply of the product increases price also increases.
Opportunity cost:
It refers to the estimated returns from the second best
alternative use of resources that are foregone due to lack of resources such as
cash in hand, wages, property.
Example: every 2 months I used to get some pocket
money from my elder brother.one day I have spent that money to buy a phone so I
have to sacrifice my trip with my friends. the opportunity cost is the trip
with my friends.
Utility:
It refers to the satisfaction obtained or expected to obtain
from consumption of goods or services.
Example: imagine
a boy is consuming 3 coke . from that the total number of satisfaction that he
obtained is known to be utility.
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