Micro economics Essay Example | Topics and Well Written Essays - 1000 words - 1

Micro economics - Essay Example Choice and revealed preference are two important factors affecting consumer demand Economic aspect looks at decision making of households. It is more concerned with demand and supply and the effect of changing prices on the former two. Marketing approach looks at not just the impact of price but also of promotions, advertising, distribution, branding etc. Economic concepts hold the condition of cetrus paribus (all else held constant). They assume that the consumer is rational and will not make un practical decisions. The marketing aspect includes the effect of emotions, feelings, point of purchase advertising material etc. They assume that the consumer can be affected something as small as the music being played in a shop. They assume that consumers can even make irrational decisions as according to the concept impulse buying. Economics is all about making choices. People make choices because they cant have everything they want. Whenever a choice is made, something is given up. The opportunity cost of that choice is the value of the best alternative given up. People whose wants are satisfied by using goods and services are called consumers. To make efficient decisions - decisions that provide the greatest possible return from the resources available, people and society must weigh the benefits and costs of using their resources to do more of some things, and less of others. The Economic approach goes into the demand and supply details. It looks at household buying power and savings. It also looks at spousal control in household buying decisions. The decision making framework (under uncertainity) is characterized as Consumer economics is also included in this area of economics. It is a broad field, principally concerned with microeconomic analysis behavior in units of consumers, families, or individuals (in contrast to traditional economics, which primarily government or business units). It sometimes also encompasses family financial planning and