Economic Concept and Its Implications in Our Life Research Paper

Economic Concept and Its Implications in Our Life - Research Paper Example Economics is useful in each and every aspect of life. Economics mainly deals with choice and decision making. Understanding of economics concepts is helpful for our lives and existence in today’s world and to understand the functions of the business world. Here we will discuss the economic concept and its implications in our life. The law of demand defines that when the price of product rises and every other thing remains constant then the quantity demand of the product will fall. It means when the price rises then the quantity demanded declines. Every other remains constant is known as â€Å"Ceteris Paribus† assumption. It means that wealth; income, population, preferences and price of other goods are constant and remain the same. Shifts in Demand or change in demand happens at the time when any one of the components of demand changes other than the price. It can also be said as a shift in demand occurs when the situation is not ceteris paribus. The Law of Supply defin es that when the price of the product rises and every other thing is constant (Ceteris Paribas situation) then the quantity of product supplied will also increase. It means that when the price of the product is increasing then the quantity of supply of the product is also increasing. Shifts in Supply or changes in supply happen when any one of the components of the supply changes other than the price. It means when ceteris paribus doesn’t occur. The concept of demand and supply is also applicable to our daily life. For example- Rice is the staple food in most of the Asian countries.