Economics concepts

Opportunity cost :-

Example :  One day it so happened,I was feeling very bored during my summer holidays,so I decided to go Shimla with my friends, but at the same time  my family also planned to visit Jammu & Kashmir.Then I got confused as I am very imotionally attached to my parents,I opted to go to ‘J & K’ with them . So, here Shimla trip is an opportunity cost.

Law of Diminishing marginal utility :-

Example :  When  I visited the Art of Living for the very first time, I felt very happy to see the peace in the environment .After 2 days I again went there with my friends,I felt happy but not so much which I felt first time and after that my happiness started to decrease every time I visited the place. This happened because of the Law of Diminishing Utility.

Law of Demand :-

Example :  Few years back I wanted to purchase one flat in royal place in Mumbai  but it’s price was so high that I could not afford it. As time went by, other  flats also started coming up in that locality and gradually the prices went down , this led me to purchase the flat I wanted to.

People response to incentives  :-

Example : As I am a very big shopaholic one day,I went to Shopper stop to shop some new trendy cloths but I was willing to spend only Rs.2000,but when I reached there I saw that there was an offer stating that "If you buy 2 T-shirts you will get one T-shirt free at Rs. 2500". As shopper stop gave me an incentive I increase my budget to Rs. 2500 and bought those T-shirts.

Law of Supply :-

Example :  Last year  during summer season I wanted to buy One AC  due to the hot temperature, as I went to the shop I saw that the quantity of Mitshubishi branded air conditioners were more in quantity as compared to the others.On inspecting about it i got to know that the prices of Mitshubishi branded ac’s were more than other brands and that is why the shopkeeper kept its quantity more in number. This happens because of the “law of Supply”.