Economics for kids ☺️

I have taken this photograph from the internet. Do you know who he is? This gentleman is called Dr Paul A Samuelson, often referred to as the Father of Modern Economics. He called Economics the Queen of Social Sciences. He used to write tough concepts in a simple language so that children like you and me could understand it :)

On the one side we have demand, which can only be met by something on the other side: supply. When I think supply, the first thing that comes to my head is the water supply. We won't be able to survive if there is no water. We need it for drinking, bathing, watering the plants, washing our clothes and utensils, cooking, cleaning our homes and so much more. There is no surviving without water, which makes me want to discuss the water-diamond paradox! What is the water diamond paradox? A paradox is something which is puzzling, in fact, one would think something of high use will also be priced at a higher rate. Diamonds are one of the most expensive jewels on the planet yet they have very little use. No one gets sick from not having diamonds but we are sure to feel sick if we do not drink water for a few hours. Yet water is not expensive at all. Even though it has so much use. This is called value-in-use. Water has high value-in-use yet diamonds have high value-in exchnage. I would...

"Mom, I want a chocolate" "Dad, I want an Ipad" "Teacher, I deserve more marks" These are all examples of demands made. They may or may not be fulfilled but they are demands of some kind! Of course, the first demand of chocolate can be fulfilled if you are within your ration of chocolates, which could be 1 chocolate per week as allowed by your mom. It will also be constrained by the budget of your household spending, also called expenditure. The second demand of an Ipad will be fulfilled if there is any use of the device for you, referred to as utility. You might want to attend online classes on the Ipad, you might even want to read on it. So if this is justified, your father might give in to your demand given the budget constraint of the household in a particular month. He might need to save for it, just like Sarthak needed to save for his mother's birthday present. Marks! Well, you need to work hard. The effort you put in will be rewarded by yo...

Let us start with trying to learn about what this term "budget constraint" means. A constraint is anything that restricts you. IF one stays at a hostel (when one is older or at a boarding school), there is a curfew of being in your room at a particular time, that is a constraint. If one is at home, there is a curfew of sleeping at a particular time or watching TV say for only an hour, this is another constraint! When one receives pocket money, maybe many of you do, then there is a limit on how many toffees or chocolates you can buy with that money. A budget constraint is related to pocket money in a way. Just like kids have a constraint about how they can spend or save their pocket money, adults in a household have the same constraint about their income. There is only so much that one can spend or save. Let us try to undertand the concept with pocket money. Suppose, Sarthak gets Rs 100 per week as pocket money. He needs to use this money to buy some drawing pencils (be...

Introductions first. Hello, my name is Priya and I am a kid inside in a grown up body 😊 My plan is to make concepts of Economics as easy as possible and try and relate them to everyday life. Stay tuned!