Thread by @caswapnilkabra

I have seen people who are scared of the subject ‘Economics’. There are many others who find it boring!
But, I am sure everyone knows the basics of ‘Economics’. In our practical life, we apply them, unaware of the fact that it is ‘Economics’.
Here’s a thread. Read on. 👇🧵(1/n)

You go to a vegetable market, ask the vendor for the price of vegetable.
He says, he is willing to sell you at Rs.20/kg but you are adamant to buy at Rs.15/kg. You bargain and finally settle at Rs.18/kg. (2/n)

Hence, you both settle at Rs.18/kg where both are satisfied.
You have applied here the concept of 𝐞𝐪𝐮𝐢𝐥𝐢𝐛𝐫𝐢𝐮𝐦 𝐩𝐫𝐢𝐜𝐞 which is the intersection of demand and supply curve and it is the level where buyer and seller both are satisfied. (3/n)

You go to a market with Rs.1000 in your pocket. You need to buy a pen for writing your college assignments. You see a costly Parker pen worth Rs.500.
You don't buy it.
You know why? (4/n)

Not because you couldn't afford it (remember you had Rs.1000) but because you didn't feel it worth buying.
You have applied the concept of 𝐜𝐨𝐧𝐬𝐮𝐦𝐞𝐫 𝐬𝐮𝐫𝐩𝐥𝐮𝐬. (5/n)

Which means consumer will be at surplus when the price of the goods is less than the utility he derives from it. (6/n)

You have a knack of studying a day before exams. You wake up at 6 in the morning, determined to study at least 3 hours. After studying 2 hours you get bored.
You know why? (7/n)

This is because of 𝐋𝐚𝐰 𝐨𝐟 𝐃𝐢𝐦𝐢𝐧𝐢𝐬𝐡𝐢𝐧𝐠 𝐌𝐚𝐫𝐠𝐢𝐧𝐚𝐥 𝐔𝐭𝐢𝐥𝐢𝐭𝐲, which states that the more stock you have of anything, the lesser would be the utility derived from the additional unit. (8/n)

You have to attend Sunday morning extra classes for your exams and in the middle of the boring lecture you feel that it would have been a lot better if you had slept at home instead of attending the class. (9/n)

You have applied the concept of 𝐎𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐲 𝐜𝐨𝐬𝐭, which is the cost of next best alternative. (10/n)

You see Flipkart and other e-commerce giants earning a lot during their big billion sale. (11/n)

You have applied 𝐋𝐚𝐰 𝐨𝐟 𝐝𝐞𝐦𝐚𝐧𝐝. Price and Quantity demanded are inversely related other things being constant. (12/n)

If you are asked, what is the value of bottled water near a flowing river?
You would say zero because there is abundant water.
If you are asked- what is the value of bottled water in a desert with no water?
You would say huge because of the scarcity of water. (13/n)

You have applied economics again!
Price rise because of decrease in supply and falls with increase in supply.
Lesser the supply, more the price. More the supply, lesser the price. (14/n)

That is how one should understand this beautiful subject!
Everyone can therefore understand economics if taught well.
So open your eyes and observe. There is economics around you.
Until next time... :) (15/n)

Tagging @FI_InvestIndia, @kaul_vivek, @Vivek_Investor for better reach!
Let us break the stereotype that 'Economics' is boring!