Economic Concepts That Must Be Known

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Hello fellow steemians!

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Simple Economics Concept For Life Easier. You need it, because sometimes in the economy there are many problems that must be overcome properly and correctly. To overcome these problems, the economy has several theories that are reflected in everyday life.

Economics may sound like a science hard to learn for some people. Like other science, not everyone is interested in this one topic or maybe even never touch it. Like other sciences also, the economy also has its own role in life.
You yourself do not really need to explore the economy if you want to prove it. Because without realizing it, actually the various concepts and theories even reflected from our daily lives.

Here's the review!

• Opportunity Cost
  One of the most popular concepts in this economy is actually faced by us almost every time, what, This one concept is one of the main components in the process of defining a decision (decision making) in which in the process you are faced with various options. Opportunity Cost is nothing other than what you have to sacrifice (cost) if you choose an option.

Example: You have to attend two different events on the same day and at the same time. The first event is your girlfriend's birthday, while the second event is an organization meeting on your campus, If you choose to attend a meeting, then the opportunity cost is that you miss the chance to be able to attend your girlfriend's birthday.

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• Marginal Utility Theory
  This one theory provides an overview of our behavior in determining how we spend. By connecting it with the level of customer satisfaction (utility), this theory argues that consumers will compare the costs required with the level of satisfaction to be gained. In other words, we will choose to buy goods or services that provide the most satisfaction that can be obtained from the money we have.

Example: You have money worth $ 25, -. With that money, you can buy movie tickets at the movies at the same price, or buy a T-shirt for $ 9, - and the rest you can use to buy stationery. Watching in theaters can give you only two hours of satisfaction, but with new clothes and stationery you can still use them for longer periods of time.
Based on this theory, you will automatically choose the second option, because the level of satisfaction is clearly higher.

• Risk-return trade off
  this principle explains that profit does not escape risk, and both are directly proportional to each other. To obtain high profits, automatic risks to be faced also higher, and vice versa. This economic principle is one of the most common principles and is also reflected clearly in various forms of investment.

Example: Entrepreneurship tends to be more profitable than regular office work. But to be successful entrepreneurship required a lot of capital and a variety of resources that must be deployed. As a result, if the loss, the risk of loss is also large, worth the capital issued or maybe m

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• Game Theory
  Discussing cooperation, conflict, and competition, this theory is one of the most popular theories because its application can not only happen in the economic sphere even to politics. This theory determines the steps in strategic decision-making by examining the various factors involved. From this way will be known the various possible impacts that can occur if a decision is taken, so that found the most appropriate step in making a choice.

Example: You want to buy an item in the seller and want to bid it. You know if the seller put a high price. To get the cheapest price, you are telling the price that other sellers are installing against the seller where the price is much cheaper at other sellers. You do it because when the seller realizes the price sold by the other seller is cheaper, he will compete and put the lowest price in order to seize the customer. That way, you can get the cheapest price for the goods you want to buy.

• The Law of Diminishing Returns
  Another popular principle in economics also proves that to increase the output (output) should be required to increase the factors of production (input) as a whole. If only one factor is improved, while others are stagnant, output is expected to decrease.

Example: You are thirsty and buy two bottles of cold drinks. Although you spend both bottles, but in the end you only enjoy the first bottle because when you eat the second bottle you are already bloated. So the pleasure and satisfaction of drinking the drink you only feel in the first bottle just because you consume too much.

Well .. it is the truth of economic concepts and theories in everyday life. If you already know and learn it, you can definitely feel the benefits. Because these concepts and theories can help you make decisions in your life when you.

Thanks to attention fellow Steemians!..