REAL LIFE APPLICABILITY OF ECONOMICS

PEOPLE FACE TRADE-OFF:

TRADE OFF is often said as opportunity cost that is the best thing is given more preference.

Trade-off involves matter of scarifies for a product to acquire another product

Example 1: this weekend of me  involves tradeoff that I have made for my classes,that is I am having live project this week for the sake of that I have sacrificed my classes for a week

Example 2:last week going out with friends involves tradeoff,  I liked to roam with friends and enjoy the Sunday  as my assignments are there so I sacrificed that time in completing my assignment

Rational PEOPLE THINKS AT MARGIN:

Rational people are those people who do their best to satisfy there objectives .

Decisions in their life are rarely successful and failures but usually involves happiness

Example 1: I am coming from Chennai to chitoor and I am waiting for bus at midnight one cab with only 3 persons was going to chitoor with cost 300 per person but I  am having only 150 in my hand so I said the same to him after some time he accepted that 200 from me and I came to my place in that cab ,by this he don’t want to leave that margin amount

Example 2:  I went to purchase a bike paying 65k for only bike and the supplier told me to add few extra fittings that cost around RS5000 but we refuse them and purchase the same from outside for less money as to save that margin of money

Complementary Goods:

Complementary goods are those goods which are consumed simultaneously,without one good the other wont survive

Example 1: the best example of this is mobile phone and its battery as increases in demand for mobile phones increases demand for batteries

Example 2: printer and ink fillers are complementary goods as the demand of printers increases then demand for ink fillers also increases.

BUDGET LINE :

The entire product purchased by the customer from the total income, then the budget line forms.

 Example1: one day I have to purchase jeans and shirt and I was having rupees 5000, which is being spent on purchasing jeans and shirt.

Example 2 : one day I went to market with my mummy to purchase some kitchen utensils and their we have spent the total money of rupees 4000.

Utility :

After consuming the product the total satisfaction which we get from the entire product called UTILITY.

  EXAMPLE 1: ONE DAY I WAS PLAYING FOOTBALL AND AFTER PLAYING FOOTBALL I WAS FELLING HUNGRY AND I WENT TO HOTEL THEIR WAS SAMOSA , I ATE 5 SAMOSA THEN I GET Satisfy.

EXAMPLE 2: one day I was in office and I was feeling to consume 1 cup of coffee . then I went to canteen and I consume 1 cup of coffee which gives me satisfaction.