University:
California State University, Northridge
Course:
ECON 101 | Economics for Everyday Life
Academic year:

2023
Views:

491

Pages:

2
Author:

Jithin J. I.

Financial Businesses Concerns Affecting 1. Initialization The need, supply, demand, production, distribution, consumption, and consumption possibility; price, value, competition, monopoly; profit; development; average and marginal; elasticity; and micro- and macro-analysis are just a few of the economic concepts that will be covered in this lecture. 2. Needs - Needs serve as the impetus for all economic action. They speak of the unhappiness that everyone seeks to leave behind. - The three types of needs are essentials, comforts, and luxuries. It's possible for needs to be permanent, essential for effectiveness, or just habitual. - There are many needs. No need can ever be completely and permanently met. Needs also tend to repeat themselves. - The allocation of limited resources that may be used for other purposes in order to satiate our insatiable demands is how Lionel Robbins characterized the economic challenge. 1) There is no end to the wants, which leads to the economic issue. 2) Resources are limited. 3) There are other purposes for means. 3. Utility Utility is the highest level of human desire a thing can satiate. Utility is a relative and individualized idea. It varies from person to person, season to season, and location to location. Total utility and marginal utility are the two different forms of utility. Total utility is the total of all the benefits a consumer has received from all the units of an item they have consumed. Marginal utility is the extra benefit that the customer receives from consuming one more unit of the product. TU = MU1, MU2, MU3,..., and MUn MU = TU(n-1) - TU As a customer eats more of the product, the marginal utility of the good declines. The Marshallian Law of Diminishing Marginal Utility governs this situation. The law makes the assumptions that the customer will act rationally, that all units of the product will be identical, and that they would be consumed continually. 4. Demand Demand encompasses more than simply needs, wants, or desires. Demand in economics is supported by buying power. The cost of the item and the consumer's income determine purchasing power. Demand is the consumer's capacity and desire to purchase an item at a certain price and point in time. Want to Buy plus Ability to Pay plus Willingness to Pay = Demand Detailed information in a statement of demand must include: 1) The market element. 2) The cost element. 3) The matter of time. For instance: Family A wants milk, costing Rs. 23 per litre per month. Summary Some of the fundamental economic ideas that are pertinent to business are covered in this lecture, including: - Needs: the level of unhappiness that fuels economic activity. Needs are limitless, rare, and may be met in other ways. - Utility is the fulfilment a thing gives to a need. Utility is subjective and individualized. Utility comes in two flavours: total and marginal. As consumption rises, marginal utility falls. - Demand is the ability and desire to purchase a product at a certain price and time. Demand is influenced by buying power, which is influenced by income and price. The market, price, and time components must all be included in a full explanation of demand.