Economics is the research that handles the production, syndication, and consumption of goods and services, or the materials welfare of humankind. It is the review of how individuals and societies choose to use the scarce resources that mother nature and previous years have provided. Because of scarcity, choices need to be made on a regular basis by all consumers, organizations and governments. That's, economics is the study of the trade-offs engaged when choosing between alternate pieces of decisions.
Opportunity cost is the price of forgone benefit i. e. the expense of choosing one alternative/thing over other. Samuelson (1989) points out it as the value of another best use (or opportunity) for an financial good, or the worthiness of the sacrificed option. Thus, say that the inputs used to mine a ton of coal have been used to develop 10 bushels of whole wheat. The chance cost of a ton of coal could have been used to develop 10 bushels of whole wheat. The opportunity cost is thus the 10 bushels of wheat that could have been produced but weren't. Opportunity cost is particularly helpful for valuing non-marketed goods such as environmental health or basic safety. Opportunity cost can't continually be measured in financial or material products, but also in form of anything which posses any value. In economics, there are a famous saying that, "there are NO free lunch for anyone". If one is not asked to cover eating a good or a service, there should be some opportunity cost included, another best alternative that might have been produced using those resources, because of the scarce resources that are used up in the creation of those goods or services. Opportunity cost asses the expense of next best alternative foregone by any financial choice made by the average person or society. There is also the chance cost of deciding not to work that is the lost pay foregone
Difference between Macroeconomics and Microeconomics:
Microeconomics and macroeconomics will be the two major categories of economics:
Microeconomics- examines the behaviour of individual economical entities: companies and consumers regarding the allocation of resources and prices of goods and services. It displays and studies the demand-supply system at individual level, effect of income and saving behaviours, costs of creation, maximizing revenue, and the various market set ups. Microeconomics handles the effect of macroeconomic factors and shifts on individual's life.
Macroeconomics- is the study of the behaviours and activities economy as a whole, not only of specific areas, but complete sectors and economies. It offers the functions and characteristics related to the Government Reserve System, unemployment, money supply, inflation, interest rate, international exchanges rate, gross home product, business cycles etc
It also include the result that unemployment brought to the economy like upsurge in unemployment decrease the gross home product of economy, reduces purchasing electric power parity. Its good impact is the decrease in inflation rate which is because of reduced money source followed by increased interest rate. It involves the study of the most prominent economic issue which is inflation. Central lenders usually increases the interest rate (loaning rate) to reduce the money supply which results in less financing, less money deposition (money supply), less income, less purchasing ability hence less inflation. But as a counter effect it also decreases the speed of employment of an country which results in low over-all GDP of this country.
Fluctuations altogether monetary activity are known as business cycles, and macroeconomists are concerned with understanding why these cycles arise. Most unemployment and inflation are caused by these fluctuations. (enotes, 2. 011)
Demand curve is a visual or diagrammatic representation of the agenda of demand. It is a graphical representation of the relationship between price and amount. Individual demand curve decides the highest price at which an individual is willing to pay for (different levels of) the commodity. Whereas, every single point on the market demand curve depicts the maximum level of the item which all consumers will collectively be willing to buy, under given demand conditions, at every price level.
Demand curve has a negative slope. It slopes downwards from left to right advocating that the number demanded falls with increase in price and v