Relation With Economics In Our Daily Life..!

Economics is derived from the greek word 'Oikonomia' . Oikos means household and nomos means management called as household management. Economics in simple words can be define as the study how society uses its limited resources available them

Famous Economic Laws & Concepts With Real Life Examples

1. Law Of Demand
2. Law of Diminishing Marginal Utility
3. Opportunity Cost
4. Ordinal  Utility
5. Cardinal Utility  

Law of Demand:

The law of demand states the relationship between the price and demand.When the price of a commodity increases the demand for product decreases and vice versa 

Example-1: Suppose the price of an apple is 70/- Rs kg then the consumer will purchase only 1 kg but when the price fall to 45/- Rs then the same consumer will buy 2 kg

Example-2: In past when the price of the data packs where almost 250 Rs per GB/Month the demand for it was very limited but when the price for the data packs were decreased to 150 Rs 28 GB/Month the demand for the mobile data increased rapidly

 Law of Diminishing Marginal Utility:

The law of diminishing marginal utility explain the relationship between the quantity of a commodity and its utility. The law states that if the consumer increases the consumption of any particular commodity, the marginal utility or the satisfaction derives from that commodity decreases continuously.

Example-1: Suppose a consumer a brought a new car the satisfaction derived from it would be at high and if he/she brought same model car second then the satisfaction level from the second car is not as much as first car and it goes on decreases from third and fourth etc.,

Example-2: A person watched a movie the utility and the satisfaction he/she get from watching first time is much more than watching it second and third time.

Opportunity Cost:

Opportunity cost can be reffed as the value what you sacrificed or give up in order to get something else.

Example-1: Suppose you have 150000 lakhs  you can have the to option either to invest the money in the form of saving and earn profits from it and an other option of buying a SUV. By choosing in the SUV you should have to give the profit from the investments

Example-2: Two movies is been released at one day and   first movie is of your favorite actor and second movie is of your favorite actress.Their is only possibility to watch one movie and if you choose first movie then you should give the chance to another.

Ordinal Cost:

Ordinal Utility states that the utility or satisfaction of the customers cant be expressed in numbers.It is been the qualitative way.

Example-1: The utility or the satisfaction derived from driving a car cant be expressed numerically

Example-2:The utility or the satisfaction derived by purchasing a house cant be expressed numerically.

Cardinal Utility:

Cardinal Utility states that the utility can be measurable in number such as 1,2,3, etc. Which means the customers can express his/her satisfaction in quantitative way

Example-1:Suppose you went to a service center of a car from their you can measure your satisfaction level in terms of the numbers by rating them.

Example-2: The services given by the mobile operators can also been measure in term of the number by rating them from the satisfaction level you got from it.

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