TERMS IN ECONOMICS.

UTILITY

It is the ability of something to satisfy  needs or wants. It represents the satisfaction experienced by the consumer of a good . One cannot directly measure , benefit , satisfaction or happiness from a good or service.

TOTAL UTILITY is the aggregate sum of satisfaction on benefit that an individual gains from consume a given amount of goods and services. The amount of total utility corresponds to the persons level of consumption.

EXAMPLES:-

•  Imagine you started eating cookie , the pleasure of eating the first cookie is much greater than the pleasure receives from eating the 10th or 11th cookie . 
• Total utility :- After eating one chocolate bar will be quiet high. But if you eat more chocolate bar it will be less as compare to first one.

DEMAND

Demand means desire . A man may be willing to get a thing but he is not able to pay the price (this is not demand) . Demand means the willingness as well as ability to purchase the commodity by paying its actual price . Demand is related to price.

EXAMPLES:-

• Imagine a new restaurant open up in your town and great reviews but there are only twelve tables in the restaurant but everyone wants to reserve the table. The demand for reservations goes up.
• We get the Diwali vacation , and have to go our hometown , but at that time fare of  tickets goes up because the demand is also high due to Diwali.

ELASTICITY OF DEMAND 

Elasticity of demand means change in quantity demanded due to change in price.

                             = %change in quantity demanded.         

                                         %change in price

It measures how much the quantity demanded of good changes when its price change.

 When the price of good is high, then the goods has "elastic" demand.

                             = Q.D respond>Price change 

When price elasticity of goods is low it is "inelastic"

                             =Q.D respond<price changes.

EXAMPLES:-

• If your doctor prescribed you some medicine and the price of medicine goes up and you cannot substitute that medicine.
• If you want to purchase some clothes online, and you make a mind that you should buy that clothes and you see that suddenly price goes up, then you may not buy that clothes.   

SUPPLY

It is defined as a quantity of commodity offered by the producers to be supplied at a particular price and at the certain time.

EXAMPLES :-

• If we see the demand of frozen pea has increased (when it season is out) , then we increases the supply of frozen pea .
• If there are less  home maid near your locality, then the wages of the remaining  home maid increases.

 ELASTICITY OF SUPPLY

The price elasticity of supply is the percentage change in quantity supply divided by percentage change in price.

                                   =% change in quantity supplied

                                         % change in price

The price elasticity of supply as the responsiveness of the quantity supplied of a good to its market  supply. supply elastic or inelastic depend upon whether the percentage change of quantity is larger or smaller than the percentage change in price. 

EXAMPLES:-

• I decided to purchase a gallon of milk. a few stores will discount me significantly to have me shop in their store.
• You listen from your friends that their is momos corner near your college, you went their you buy the momos probably he may give you more momos, that you can go again.