Economic concepts to my personal experience Essay

Economic concepts to my personal experience - Essay Example This paper looks at how some of the microeconomic concepts can be applied to personal life and how they relate to our everyday usage regarding the goods and services. Micro economics is mainly helpful for me in making the decision on switching between the alternatives available for a particular satisfaction. To draw a balance between my budget and prices of the commodity. It certainly helps in buying decision in my personal life. For starters, let us consider the simple fact of buying and selling goods and services. When we want to buy a particular good, there are a host of factors that determine our decision and influence our purchase right from the price of the good to the quality of the good and the competitors for the brand of the product. We measure the utility of the good against the price and then take a decision regarding whether to buy it or not. If we compare the utility value of a good against the price, we would come to a fairly reasonable conclusion about maximizing utility and thus contributing to our decision to buy the good. This applies in the case of many household goods and services and can be used to determine whether a particular good ought to be bought or not. The Microeconomic theory helps in finding answers to the three basic fundamental questions for any business entity in any economy–(1) what to produce, (2) how to produce and (3) for whom to produce in order to utilize the available scarce resources efficiently. That is why the Price theory, Demand concepts and theories of Market structure are the important elements of micro economics. Microeconomic theory studies the economic behavior of individual decision-making units such as consumers, resource owners (i.e. households who provide services to the business entities in exchange of the income) and business firms in a free-enterprise economy. Proper analysis of all these 3 areas of concern helps the business entity to perform efficiently. If the business