Question

Write two-page paper including your list of sources about your favorite economic concept and its application in everyday life

Answer 1

Human beings always endeavour to flourish in leaps and bounds. The world is rowing through a compact and technologically drenched millenia that has rendered ourselves to that of a slave to various theories around us. Economics has a lot of importance in our everyday lives. The theories of economics are indispensable in almost everyone's lives. Everyone around us makes sure to think about economic benefits while demanding for any good or service. Therefore, Economics has been of immense help.

For instance, when we buy a good, we somehow make a cost-benefit analysis in our mind before buying it. We buy a bigger amount of the product if we realise that our demand for the product is huge so that a lot of amount bought at a time will result in discounted price. Similarly, when we create a bank account we calculate the inflation rate and rate of interest and interest rate so as to calculate our profits accordingly. Therefore, theories of economics truly prove to be a blessing.

There's a theory of marginal utility theory. According to wikipedia, it examines the increase in satisfaction of consumer's gain from consuming an extra unit of a good. Utility serves as a measure of satisfaction/happiness/benefits a person derives from consuming a good. This theory can be used in everyday life to a great extent.

For instance, to buy milk daily, we have to make sure about the amount we buy, such that the consumption rate and benefits hence, prove to be useful. If we buy extra in order to not buy again for a few more days, and take more than the quantity we normally consume, it may have certain side effects as well like the milk may not remain fresh for a longer time to be used later. Similary, the breakfast we take, we either have to decide that we make it and then take it or just have it outside. However, the marginal utility comes into action and we start thinking about consuming what would make us healthy as well as satisfied. We then decide whether to take the public transport or our own vehicle. Similarly, to buy vegetables we need to decide whether to buy it from the local grocery or go to the weekly market where you get ut fresh. Again perishable items like fruits need to be decided whether to be bought in dozens or simply in numbers. All of these require a knowledge of marginal utility theory so that the consumption of a particular good would result in customer's satisfaction. The demand and supply in this theory need to be decided against pros and cons so that they are effectively utilised.

Thus, the marginal utility theory is one of my favourite concepts as it helps us to realise what is desired of us based on the satisfaction of consumption.