Some concepts of economics

1.Opportunity cost

Opportunity cost is defined as the cost of alternative opportunity given up or surrendered.

It is clear that the question of opportunity cost arises whenever resources have alternative uses. The resources are not always physical resources they may be monetary resources or time.
For eg every month I get some pocket money from my parents. This months I have purchased some new clothes with that money so I have to sacrifice outing plans with my friends. The opportunity cost of spending in new clothes may be the outing that I could have enjoyed.

2.Law of diminishing marginal utility

It states that as the consumer has more and more of a good the marginal utility that he derives goes on diminishing.

For eg. In the beginning when I joined IBA food that is given in hostel has a certain positive utility with each passing day the marginal utility from hostel food goes on diminishing.

3.Law of demand.

If the price of a product rises the quantity demand of that product goes down all other factor held constant.

For eg when Starbucks reduces the coffee price from 200 to 99 there was a huge demand people were seen standing in big lines.

4. Demand and consumer tastes.

Favorable change in tastes will increase the demand for the goods & vice versa.

For eg. Few years back I love to watch horror movies but now I only watch action movies so there is change in my taste with respect to movies.

5. People responds to incentive.

One obvious source of incentive is price of goods and services.
For eg. I spend lot of money when filpkrapt give huge discount during big billion days.