5 concepts of econmics

1.law of demand

If the price of any product or service increases, the quality of consumption deceases and if the price of any product or services decreases, the quality of consumption is also decreases.

Example 1 . average price of tomato is 50 rupees per Kg, but when the price of tomato goes up 80 Rs per Kg , people start consuming less amount of tomatoes in opposite when the price decreases to 20 per kg people consume more tomatoes than consume normally .demand of the product inversly proportional to the product.

Example 2. During festive season buses fare get increase beacause of high demand of tickets , normal people who cannot afford the fair of ticket try to travel in train to save money . In this case we can see that increase in bus ticket result in people travelling othrt modes of transport so we can see that the demand of bus ticket is inversely proportional to price of bus ticket .

2.Law of supply

 if all other conditions are constant and if nthe price of goods or services increases then the quantity of supply of good or services from the producer also increases 

 the supplier will try to maximize the profit

Example:

we know the availability of air ticket during festive time is very low due to high demand and the price also increasses so to maximize the profit air lines company try to increase the number of flights so that they can generate more revenue by using the high price of tickets with more customers

3.Theory of utility:

 by utility we mean the extent of satisfaction obtained from the consumption of goods and services preferred by consumer given the availibility resources the level of income and the market price of various goods,and the rational consumer allocates his spendin is such a way that preferred cmobination gives the highest utility.

Example: 

 a person might get 30 utils of satisfaction from eating a bowl of chocolates while someone else gets only 10 utils of satisfaction this depends upon the satisfaction of the rational consumer.

4.Oppurtunity cost:

Oppurtunity lost is oppurtunity cost

Example 1 : i have to send the parcel to my home . i have two options here i can go directly or use courier services . here opportunity lost is if i go to home i lost my classes so this is opportunity cost.

5 production fuction :