Trade-offs:-
It is a technique or a situation in which you have to balance two opposing situation or qualities or we can say forgoing one or more desirable outcome in exchange for increasing other desirable outcomes.
For example:
1.After my under graduation, I wanted to purse you a PGDM course. I faced a dilemma in choosing the right college. Out of the various colleges I opted for IBA. No doubt there were many colleges in my home town but I chose IBA and came out into a decision.
2.I remembered, one day I went to a restaurant and the waiter gave me the menu and went to the another table. My favourite dishes are Mutton rogan josh and Chilly panner. It was difficult for me to choose what to order because eating both that was not possible at that moment. So I opted for Mutton Rogan Josh rather than going for paneer and that was the kind of trade off which I made.
Substitute goods :-
It refers to one good that can be used instead of another that is two goods for which an increase in the price of one leads to an increase in the demand of the other.
For example:
1.Tea and coffee, if the price of coffee increases the consumers demand will shift to tea and the demand of tea will increase even without the price of tea being changed.
2. Activa and Fascino, if the price of Activa increases the consumers demand will shift to Fascino and the demand of fascino will increase even without the price of fascino being changed.
Principal of diminishing marginal utility:-
Marginal utility is the additional bit of satisfaction or amount of utility gain from each extra unit of consumption.Where as, the Diminishing marginal utility states that the more of a good that one obtains in a specific period of time, the less the additional utility derived from an additional unit of the good.
For example:
1.I really love biriyani..Each time I eat a spoon of biriyani I feel a certain amount of satisfaction. The second spoon of biriyani brings more satisfaction than the first, and the third is more satisfying than the second.However by the time i eat the last spoon of biriyani,the amount of satisfaction is much less than the first few intakes.
2.Buffet is the best example on Diminishing marginal utility.For one price,you can eat all of the foods you want,the reason it works is that people reach a point where the utility(pleasure) gained from an additional plate of food isn’t worth the cost of eating that additional plate.
Price elasticity demand :-
The price elasticity demand measures the responsiveness of the demand towards the changes of price of the commodity in the market.
For example:
1. When the demand for petrol increases in the market, the demand for it increases because of petrol doesn’t have any substitutes in the market. Those people who have petrol motor can’t substitute petrol for anything .
2.Ola and Uber,many people shift easily from one cab service to another, even for a price difference of as little as Rs.30, if the waiting time for cabs is within five minute difference from each other
Law of supply:-
It is a fundamental principle of economics, it says that an increase in price results in an increase in quantity supplied.
For example:
1.If 10 people want to buy a pen, and there is only one Pen in the store, the sale will be based on the level of demand for the pen,the supply function requires more pens, which generates more production to meet demand.
2.During the Diwali season,price of clothes increases as a result, supply of clothes also increases
It is a technique or a situation in which you have to balance two opposing situation or qualities or we can say forgoing one or more desirable outcome in exchange for increasing other desirable outcomes.
For example:
1.After my under graduation, I wanted to purse you a PGDM course. I faced a dilemma in choosing the right college. Out of the various colleges I opted for IBA. No doubt there were many colleges in my home town but I chose IBA and came out into a decision.
2.I remembered, one day I went to a restaurant and the waiter gave me the menu and went to the another table. My favourite dishes are Mutton rogan josh and Chilly panner. It was difficult for me to choose what to order because eating both that was not possible at that moment. So I opted for Mutton Rogan Josh rather than going for paneer and that was the kind of trade off which I made.
Substitute goods :-
It refers to one good that can be used instead of another that is two goods for which an increase in the price of one leads to an increase in the demand of the other.
For example:
1.Tea and coffee, if the price of coffee increases the consumers demand will shift to tea and the demand of tea will increase even without the price of tea being changed.
2. Activa and Fascino, if the price of Activa increases the consumers demand will shift to Fascino and the demand of fascino will increase even without the price of fascino being changed.
Principal of diminishing marginal utility:-
Marginal utility is the additional bit of satisfaction or amount of utility gain from each extra unit of consumption.Where as, the Diminishing marginal utility states that the more of a good that one obtains in a specific period of time, the less the additional utility derived from an additional unit of the good.
For example:
1.I really love biriyani..Each time I eat a spoon of biriyani I feel a certain amount of satisfaction. The second spoon of biriyani brings more satisfaction than the first, and the third is more satisfying than the second.However by the time i eat the last spoon of biriyani,the amount of satisfaction is much less than the first few intakes.
2.Buffet is the best example on Diminishing marginal utility.For one price,you can eat all of the foods you want,the reason it works is that people reach a point where the utility(pleasure) gained from an additional plate of food isn’t worth the cost of eating that additional plate.
Price elasticity demand :-
The price elasticity demand measures the responsiveness of the demand towards the changes of price of the commodity in the market.
For example:
1. When the demand for petrol increases in the market, the demand for it increases because of petrol doesn’t have any substitutes in the market. Those people who have petrol motor can’t substitute petrol for anything .
2.Ola and Uber,many people shift easily from one cab service to another, even for a price difference of as little as Rs.30, if the waiting time for cabs is within five minute difference from each other
Law of supply:-
It is a fundamental principle of economics, it says that an increase in price results in an increase in quantity supplied.
For example:
1.If 10 people want to buy a pen, and there is only one Pen in the store, the sale will be based on the level of demand for the pen,the supply function requires more pens, which generates more production to meet demand.
2.During the Diwali season,price of clothes increases as a result, supply of clothes also increases
No comments:
Post a Comment