COMMON ECONOMIC TERMS

1) UTILITY- Utility of goods and  service means, the rate at which a consumer is satisfied from the product or service that he/She is getting.

Example 1.  I went to Big Bazaar and bought 3-4 Lays packets thinking that I will have it at one go. After coming to home, when I had one packet I couldn't have more that that, that level of satisfaction is called Utility of goods.

Example 2. Last 2 months ago, I gave my car in serve as many problem were there, after 3 days, the service man, repaired every single thing that was not working and many other that would not work in future. When I went had my ride, It was smooth. I was highly satisfied by the service, this level of satisfaction is called Utility of service.

2) DEMAND CURVES-
Demand curve shows how the quantity of a good demanded depends on the price of the product.

Example 1. When I went for a live project of Bagrry's I saw that earlier when Bagrry's  price was high people would hardly referred that brand, and choosed Kellogg company product, but when there was a offer of Independence day,people came and took the product of Bagrry's as it has very low cost, here we can see that as the price of the product decreased the demand increased. Here the demand curve slopes downwards.

Example 2. The price of IPhone 5 was very high when it was launched. People hardly bought it. But after 4 months the price of it drastically decreased, and there was a huge demand of it. Here,we can see that, as soon as price of the product decreased the demand increased. Here the demand curve slopes downwards.

3) ELASTIC GOODS- for every elastic demand there is a substitute goods.

Example 1. We can take the example of Kelloggs and Bagrry's,
Kellogg company have  higher price and Bagrry's have lower price, people use to go for Bagrry's product, but the movement Kellogg lowered its price, people moved to Kellogg, here we can see that because we consumers get same product in lesser price we switch to the lower one. This is elastic goods.

Example 2. I went to have ice cream yesterday, I usually preferred Amul Ice cream, then I looked forward to Celeste ice cream I saw it has same quality and price was low as compared to Amul,that's why I choosed Celeste. Here, this is Elastic goods.

4) CONSTANT RETURN TO SCALE -It means the amount of increase in input is equal to the amount of increase in output.

Example 1. When patanjali invested more in his products,the supply also increased to the market.

Example 2. Mobile phone store, the more quality equipment he invested in repairs the more output he got in it ( increase in customers )

5. Consumer Behaviour- it means to know how the customers think of a product, at what time he wants it, what exactly a person wants in a product,understanding it and produce any product.

Example 1. When I went to buy a slipper, I saw that some companies have more comfort level, and some have less price but less comfort level in the eyes of customers, here customers don't get satisfied as price is low but comfort is not there, we have to understand the consumers behaviour.

Example 2 . When I went to a shop I always preferred a classmate note book, for next 6-7 visit I always got disappointed as I didn't get it in time. Here, the producer should understand the consumers behaviour and price in time.