Economy

Opportunity Cost:

              It is the next best alternative cost. Alternative cost means the price which we get by giving out the other cost. As we yield some more benefits from the next one  as compared to the given up cost.

Ex:

       1. Today I want to go to yelchenahalli so I opened ola its showing a fare of Rs.125 for a auto but at the same time it is showing Rs.140 for a car. So here for Rs.15 I am getting some comforts like AC, Pollution free etc., This is opportunity cost.

      2.  When I purchased a book there he shown a book with100 pages at Rs.25 and also a book with 200 pages at Rs.32 then here I get the opportunity to get 100 more pages at Rs.7 paying extra. This is my opportunity cost.

Complimentary Goods:

             The goods which can be consumed together were known as complimentary goods.

Ex:

      1.  Mobiles and SIM as when there is no SIM then the mobile cannot get operated for calling  

      2.  Computer and Operating System. When there is no OS then the computer will not work.

Substitute Goods:

              Goods which can be replaced with the other goods were known as Substitutes.

Ex:

     1. Every time I used to drink sprite if it is not available then I will drink 7 up.

     2.  I used to brush my teeth with Closeup if it is not available then I prefer to take Colgate or Pepsodent.

Consumer Surplus:

         It is the difference between what the consumer is willing to pay and what he actually pays.

Ex:

      1. When I want to buy a trouser I fix certain amount to pay for it i.e., Rs.700(willingness to pay) and what he said is Rs.900 but the actual what I paid is Rs. 600.Here Rs.100 (700-600) is consumer surplus.

       2.  I want to buy a gift I think to spend 500/- on it but the amount demanded by the seller is 700/- but what actually I pay is 450/-. Here 50/- is consumer surplus.

Producer Surplus:

            This is the difference between the price for what producer was willing to sell and what he actually sells.

Ex:

      1. When I was selling guava I decide to sell it for 50/-per kg but when a person comes to buy as I recognised that he will buy compulsorily then I sell it at 75/-.Here 25/- is producer surplus.

      2.Producer wants to sell a cloth at1200/- but he sold it for 1400/- here the difference 200/- is producer surplus.