Theories of economics and human life is related in various ways. In this article we shall explore the same.
In economics the point where the 2 curves intersect results in the optimum quantity to be produced in the market. In human life the point where happiness and sadness meets its where you lead a balanced life.
In economics you have business cycles such as Boom, Normal, Recession and Depression whereas in our lives we have mood swings- broadly good and bad.
In economics there are various markets - perfect competition, monopoly, monopolistic and oligopoly whereas In human life there are various social groups that one interacts with - Close friends, family and relatives, Interest or hobby groups, sports groups, social club groups, etc. As in monopoly there is only 1 player, so in real lives there is monopoly of relations when there exists no real relation except for 1 close friend. Few friends and a nuclear family represent oligopolistic structure of human life with few players in the market. People who are highly social and have numerous social contacts are similar to players in the perfect competition where there are large no. of buyers and sellers; they have perfect knowledge (information), and sell similar products. Such people have good networking skills and live on trust and acceptance of others.In real life there are people who have everything in life, a perfect married life, a perfect family, a satisfying job, enough money to satisfy everyone's needs yet there is an emptiness inside. They depict the players in monopolistic competition as they have products which are highly differentiated, large no. of sellers, no entry and exit barriers yet they aren't as profiatble as firms in other markets.
Going beyond various market structures we have various concepts in economics such as the Isoquants which is a depiction of production at various levels. Isoquant curve is a graph of all possible combinations of inputs that result in the production of a given level of output. Used in the study of microeconomics to measure the influence of inputs on the level of production or output that can be achieved. In real life the Iso-quant is the line where we stand as today. It is a result of what we did in the past. The combination of the past actions results in the Isoquant of the present and also that of the future.
In economics all costs are classified as fixed and variable costs. in real life all your capital expenditures such as house loan, renovation, car, office, etc are fixed costs and daily expenditures such as food, clothing, entertainment, education fall under variable costs.
As we have learnt under the law of Diminishing marginal utility that with the increase in every marginal unit of consumption, the satisfaction derived goes on decreasing in the smae way love between married couples, in general, etc goes on decreasing with age. At the age of 20-25 when most people get married the utility is at max, at 25-40 years of age the utility goes on decreasing with lesser sexual desires, increased responsibility of kids, growing work pressure and conflicting career and personal needs. At the age of 40-60 the utility is almost nil wherein the existence of relationship is nominal, dependence is natural as it has developed over time, feelings are neutral and personality clashes are rampant. In some cases the marginal utility is also negative resulting in divorces but this can occur anytime irrespective of the age.
As per the law of demand, other things remaining constant, the quantity demanded of a good falls as the price of the good raises. In life as a person becomes sucessful his social acceptance decreases as most people at the top today are loners. Rekha, the famous Bollywood actoress, Albert Einstein - the world renowned scientist, Napolean Bonparte the French Emperor- are all loners in their lives. As there are exceptions to every law, even in real life there are people who have reached the pinnacle of sucess with a strong public support to back them like the superstar of the millennium- Amitabh Bacchan.
