Macro Economics In Day to Day LIfe

INDIFFERENCE  CURVE  THEORY:-

                                                  It is an alternative combination of consumption of two goods which gives same level of satisfaction or utility. In other words, it is a curve which represents about the various combination of two goods, which give the same satisfaction.

                                                                          

                       (SOURCE:  https://www.google.co.in/search?q=indifference+curve&source)

IN the above diagram (A=B=C) in terms of satisfaction.

Example: - one day I went to mall to buy a Lee jean. but there is no stock of Lee jeans in that mall so I bought a spykar jeans. I got the same level of satisfaction by wearing the jeans.

LAW OF DIMINISHING RETURNS: -

                                                        It is related to short run production. “A s we increase the quantity of only one input(variable), keeping other factor constant(fixed), then the total product initially increases at an increasing rate, then at a decreasing rate, and finally at a negative rate”.

( SOURCE:- www.google.co.in/search?q=law+of+diminishing+returns)

Example:-  I wanted to read my books. When i started reading, i read 20 pages in the first day. Then i read 15 pages in the second day. i realized that if i keep reading, i can read less than 50 pages. So i decided to watch a documentary instead of reading. Because according to utility, their comparison is like that 20pages reading > 1 hour documentary > 50 pages reading
HERE time is input and number of pages read is output.

3.LAW OF DEMAND: -

                            Consumer's desire, ability and willing to purchase goods at various price.  And   THE LAW OF DEMAND stats the inverse relationship between quantity demanded and price of that goods that is quantity demanded for a goods rises as the price falls, and vice versa, with all other things remain constant.

Example: -               As we know PGDM is the best PG programme to get a better job profile. So after complete the graduation maximum graduates wants do PGDM in various business schools. Because the graduates more prefer to PGDM, So PGDM programme demand increases, so day to day the business schools are increasing and also the fees of course are increasing.

4.UTILITY:-

        After the consumption of good or service the satisfaction we get from a good or service is called UTILITY. Utility is mainly 2 types

                                                                       TOTAL UTILITY

                                    MARGINAL UTILITY

TOTAL UTILITY; - The total satisfaction from a good  after consuming that good is called, Total utility.

   

Example: -   yesterday I went to king’s burger. Which is very much testy. the total satisfaction I got from that burger is called total utility.

MARGINAL UTILITY: -  The additional satisfaction a consumer get by consuming one more unit of good is called marginal utility.

Example: - As I told before yesterday I went to kings burger. After I ate one burger I ordered a another burger. The 2^nd burger is called marginal utility.

5.OPPORTUNITY COST:-

                                  The opportunity cost means to choosing the best alternative from different option and to sacrifice the other alternative to get more benefit.

EXAMPLE: -  Sunday we planned to go some visiting place.so we choose 2 places.one is Nandi hills and another is sibasamudram. after that we cancel the Nandi hills plan . Because on the way of sibasamdram we can cover two more places.so we left the plan for Nandi hills.