SIMPLE LEARNING FROM ECONOMICS

Factors that affect demand curve:

  

FACTORS	EXAMPLES
Average income: if income increases ability to buy of consumer increases	1.As income rise, people increase car purchases 2.As income rise, increases apple purchases
Population : if population increases want also increases	1.A growth in population increases car purchases 2.A growth in population increases mobile phone purchases
Price of complementary goods: if price of complementary low demand of the product increases	1.Lower gasoline prices raise the demand for cars 2.if a price of milk the demand for most of the milk bi-products increases
Tastes: we buy product that we like	1.we bike sedan car if we like sedan 2.i bought Samsung even it is higher price because I like Samsung
Price of substitute goods: if price of substitutes increases demand of a product will increases	1.price of public transport increases increases car purchases 2.oneplus is selling phones with flagship specifications at a comparatively cheaper price than the flagships provided by Samsung and apple

 Factors that affect supply curve:

FACTORS	EXAMPLES
Technology: if technology increases we can increases supply in less time	1.if AI come in to production then supply of robots increases 2.if
Inputs prices: if raw materials price decreases supply increases	1.price of engine decreases supply of cars increases 2.price of ram and rom decreases supply of mobile increases
Prices of related goods: if price of related goods increases supply increases	1.if price of truck fall, the supply of car rises 2.if price of laptop fall, the supply of mobile rises
Government policy: removing quotas and tariffs on imported automobiles increases total automobile supply	1.if government removes tariffs on apple then supply increases 2.if government removes tariffs on sony tv then supply increases

Difference between cordinal and ordinal utility:

Cardinal utility	Ordinal utility
Satisfaction which a consumer derives from the consumption of good or service can be expressed numerical units	Satisfaction which a consumer derives from the consumption of good or service can be expressed numerical units
EX :1.I bought my phone for 25,000        2.I bought my bike for 1.5 lakh	EX: 1.Kohinoor diamond        2.vintage cars

Trade off: 

               It is dilemma, when we have give up something to get something 

example:1. I have 2000 rupees, i have choice to buy earphones or headphones, i decided to buy                             headphones, that's when i face trade off

               2. planing to go on a tour, dilemma is Goa or Mumbai, i decided to go Goa, it is also a trade                     off 

Opportunity cost: 

                                             Trade of creates a opportunity cost, it is the value of choice giving for next best alternative while making decisions, it is also called as alternative cost

sacrifice what we made is opportunity cost.

    extra benefit-cost =opportunity cost(cost of next best alternative)

    examples: 1. The opportunity of going to Goa is not going to Mumbai

                     2.  The opportunity of buying headphone is not buying earphones