Economic Terms with Life examples.

OPPORTUNITY COST- In economics opportunity cost is simply the alternative cost, It is the value of the choice we make will buying one commodity. we chose the best alternative in terms of profit.

Example-

1-One day I went to a shopping mall for buy a jeans pant. But during my search of a jeans. I came saw  a very nice shirt, which really I liked of fit me, so I bought the shirt instead of jeans.

2-During my class test 11^th, my friends in my locality a plan for small trip .So, I confusion which want to go for I decided to exam and got successful marks. So, in this case trip was opportunity coast that I append for the exam.

CONSUMER SURPLUS- when ability of customer purchasing power increases from the entire income , called surplus.

Example-

1-I was willing to pay ₹ 1000 for jeans there for I went to the store and found that some jeans was a valuable for ₹700,there for I can save ₹ (1000-700)=300 is my consumer surplus.

2-According to my market research the smart phone I chose was coasting ₹  20000 but I when to the store purchasing some smart phone is coasting around ₹1800 .so ,I can say          ₹ (20000-18000)=2000 is my consumer surplus.

PRODUCER SURPLUS- when ability of producing goods increases from the customer demanded, called producer surplus.

EXAMPLE-

1-I once owned a Bajaj Pulsar. I had used it for around 2 years. Now I want to buy a new one. So, I decided to sell my old bike. So, selling price I set was ₹30000.But that I found a customer who was willing to pay ₹37000.I was very happy to know that I had a profit of ₹  7000.

2-I had a Samsung mobile. I thought I could sold this mobile ₹8000 but one customer came saw this mobile. He also very liked it and willing to pay me ₹8500.I was very happy to know that I had profit of ₹  500.

DIMINISHING MARGINAL UTILITY-It is the utility or satisfaction one gains while consuming one commodity .

EXAMPLE-

1-First time when I bought a bike, I was very excited because I riding the bike regularly. But after months later my excitement was low because was my regularly habit.

2-My favourite food is noodles. When I order noodle, I liked it very much. when I started order regularly ,I started disliking the noodles.

ELASTICITY DEMAND-  when the price of goods increases and the demand of good decreases this situation is called, elasticity of demand.

EXAMPLE- 1-I went in KFC weekly 2 days. I eaten chicken items like chicken fry ,chicken roast etc. But later I found KFC hike the price of chicken fry so, that onward I visit KFC in a week.

2-I always use to recharge pack of airtel  ₹ 199 but in a few month the paid of recharge of airtel increased to ₹299 then I used to recharge of jio pack of ₹199.