Some Examples of Economics Relating to My Life

1. People Face Trade off:

To get something which we needed, we give up something else.

• When I was studying engineering I want to buy Xtreme bike but due to its high cost and low petrol efficiency I ended up buying Discover 150cc bike. In which the mileage is high and cost is also average to compared to other bikes.
• Me and my friends went to watch a movie and in the break we were planning to have something but due to high cost over there. We just had some food like samosa and cool drink. After completion of the movie, we directly went to a restaurant and had meals. We thought that better to go a restaurant rather than having some light food in movie complex.

2. Elasticity of Demand:

As the price of good increases, the demand of that good may come down.

• I used to eat momos near college for 50rs per plate but after getting him the demand, for that food. He had increased the price to 80rs. I had decreased to eat the momos near him because of high cost.
• Near my home, there was a new shop which were selling clothes. At first, the prices where cheap. But after few days, the demand has increased for that shop. So, the manager increased price of clothes. Then, I started to buy clothes from an another shop.

3. Opportunity Cost:

It is the value of something when something else is chosen.

• Once I went to ice cream shop. I had to choose between Chocolate and Butterscotch. I ordered Chocolate. Here, the opportunity cost is the enjoyment is Butterscotch.
• One day I planned to go a movie but ended going to a restaurant. The opportunity cost is going to a movie rather than having food.

4. Indifference Curve:

All combinations of goods they yield the same level of utility.

• One day, I went to bakery to buy Coca Cola cool drink. But it wasn’t available so I took Sprite. I feel the same satisfaction with same drinks.
• I went to buy a dress in Brand Factory. At first, I had chosen a shirt of Lee Cooper brand then I liked an another shirt of Levis. I bought that shirt, there is no difference for me because I liked both the shirts.

5. Law of Diminishing Returns:

If one of the variable is increased in the production process there will be decrease in output with respect to marginal per unit output with other factors as constant.

• Sometimes I used to have tiffin outside of my home in the mornings. There was a huge rush over there with many consumers but only few people could be serving the food. The management can recruit more people to serve food for better efficiency but their cost of returns will go down. So, they operate the rush with only few labour.
• For an exam time, I need to study a three hundred papers book. I started to read, in 1hour I read 100 pages, as the time is less I completed the book in 2hours. The time required to study the same number of papers is increased due to less time. But, the amount of understanding is also decreased. So, with increasing unit of input, output is increasing at a decreasing rate.