Micro Economics- Everyday Applications of Some Concepts
MICROECONOMICS – ‘Applying concepts of Microeconomics in Daily Life and Profession’ I would like to put forth a daily life applications of fundamentals of Microeconomics, Demand and Supply and how we take decisions which are economic in nature, given limited resources. As is universally known, resources are scares and limited, like; time and money. Considering the Demand first, it appears we are always making decisions in how to spend time. Now various activities in our life on a daily basis will compete for this limited resource. With only 24 hours a day there are some activities for which there is predefined amount of time that is to be spent (it’s like a Fixed Cost), say for eg.: freshening up and getting ready for the day, travel time to office and eight and a half hours that I need to clock everyday at office etc. Supposing I spend seventeen hours (8.5 hours in office, 2 hours in travelling and 1 hour for getting ready and 6 hours sleeping), I am now left with only 6.5 hours which various other activities will demand and I will have to strike a trade-off. I may spend these 6.5 hours in reading some books, talking to my family or friends, preparing for PG etc. I may do only one or a combination of these depending on how I perceive them to be satisfying my needs and wants. If I believe that by devoting more time for preparing for PG classes I will enhance my knowledge and do well in my profession leading to career growth, I would spend more time in performing this activity rather than talking to friends or socializing.
The same fundamental applies to money, which is another limited resource. In the way I or any of us spend the earned money is again decision making or trade-off decisions and for sure supply of money (salary in this case) is scares and not unlimited. I recently bought a Flat and made a trade-off decision between purchasing a Flat or purchasing a Car. At that point of time I considered the perceived benefits of investing in a Flat (Tax benefit,
The same fundamental applies to money, which is another limited resource. In the way I or any of us spend the earned money is again decision making or trade-off decisions and for sure supply of money (salary in this case) is scares and not unlimited. I recently bought a Flat and made a trade-off decision between purchasing a Flat or purchasing a Car. At that point of time I considered the perceived benefits of investing in a Flat (Tax benefit,