REFLECTION OF MICROECONOMICS IN EVERYDAY ACTIVITY

 

reflection of microeconomics in

 everyday activity

MICRO-ECONOMICS- Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions about the allocation of resources. It focuses on how these decisions impact the value of goods and services, and how individuals and businesses interact with each other.

Every day we go through various instances that is related with microeconomics , it impacts our life so much that we can’t even think of life without micro- economics. I would like to show the impact of micro economics in our daily life by listing my one day experience and observation of how micro-economics impact our life.

I would like to begin with my morning schedule, so everyday when I wake up I want some dry fruits and biscuits as a snack , but that day my favourite biscuits got over so I went for another biscuits, here it highlights that I have substituted my one biscuits for another , so it shows the substitution effect of micro economics.

Then I craved for a cup of coffee, so I decided to buy a coffee packet from my nearest coffee shop, he sells various type of coffee, of different companies and of different sizes, consequently the coffee cost has increased recently so I decided to buy the smaller packet of the coffee which cost me 30 rupees, so here it illustrated the LAW OF DEMAND i.e. as the price increases the demand decreases.

While deciding the breakfast, I looked into my wallet and I saw that I have 500 rupees, and I was having 2 options ,dosa of 150 rupees and uttpam for 120 rupees , so I opted for dosa , so uttpam became my OPPOTURNITY COST i.e. the forgone benefit that would have been derived from an option other than the one that was chosen.

I then had to travel to college I could have taken a cab or use the metro. Taking cab would be faster but more expensive, while the metro would be cheaper. The concept of *marginal utility* comes into play here. MARGINIAL UTILITY refers to the additional satisfaction gained from consuming one more unit of a good or service. If I take Uber every day, the added satisfaction from saving time might reduce over time, and I might shift to using the bus more often as the perceived benefit diminishes.

At lunch , I decided to have my favourite food, paneer and butter naan , the first butter naan which I ordered gave my the highest satisfaction , but as I ate the 2^nd and the 3^rd it didn’t gave me that satisfaction which highlights LAW OF DIMINISHING MARGINAL UTILITY which states as consumption increases, the marginal utility derived from each additional unit decreases. In other words, the more of an item you consume, the less satisfaction you get from each additional unit. 

In the evening, I went shopping. I found a very beautiful dress, I liked, its original price was ₹3000, but now it was on sale for ₹2500. Since I was willing to pay ₹3000, I gained CONSUMER SURPLUS the difference between what I was willing to pay and what I actually paid. This surplus reflects the additional satisfaction or utility I received from making the purchase at a lower price.

After shopping, I decided to go to watch a movie. The ticket prices made me reflect on PRICE ELASTICITY OF DEMAND. If the cinema had increased ticket prices, I might have decided not to go at all, as entertainment is often a luxury good with more elastic demand. When prices rise, the demand tends to drop sharply, as consumers can easily substitute movies with other forms of entertainment like Netflix or online streaming.

By the end of the day, I realized how deeply microeconomic concepts are embedded in our daily decision-making. From budgeting and making choices with limited resources to experiencing the diminishing satisfaction of overindulgence, every decision is a small-scale economic transaction.

These microeconomic principles not only shape individual choices but also influence broader market dynamics, helping to better understand how consumers behave and how resources are allocated in society.

In conclusion, microeconomics isn’t just a theoretical subject limited to classrooms — it's something we live and experience daily, often without even realizing it.

 

CIA-1

NAME- SWARA ARYA

REGISTRATION NO. 24215226

COURSE- 1BDA(BSC in data science and artificial intelligence)

SUBJECT- Market and Economy