Promotion of Sunsilk
BEC 1034
Microeconomics
GROUP ASSIGNMENT
Lecturer’s Name: Madam ONG HWAY BOON
Section: BC 177
Article: The Malaysian Insider (27 July 2012)
List of members:
NAME
ID NO
Tan Hui Juin
1122701693
Lai Zhi Wei
1122702253
Felicia Mah Phui Mun
1122701689
Toh Han Lin
1131120643
Koh Kai Bin
1131119181
a) Will there be an increase or decrease in demand?
There will be an increase in demand of car because the tax of car has been cut for public, it cause the price of cars decrease, so the demand of car increase. The increases in demand cause the demand curve shift to rightward. The decreases of tax will increase the disposal income of individual, so that they have more income that can use to buy other things. Besides that, tax decreases also can decrease the debt of individual because they pay less tax, so they can use their extra money to buy car.
Price D1 D
0 Quantity
b) Will there be an increase or decrease in supply?
In the article that we choose, it is talking about a cut in car duties. When the car duties cut down by the government, this will affect the price of car decrease. For example, let say the car duties is set at 65 per cent, when a Malaysian purchase a car of RM 100 000 has total RM 65 000 is goes to the government and the price before duties actually is only RM 35 000.When the car duties cut down to 20 per cent this means consumer only need to pay RM 55 000 to get the same car. So this show a cut in car duties will decrease the price of car. When the price of car decreases the demand of car will increase, but the supply of car will remain unchanged this is because, the change in price of car does not affect the revenue for selling each car. Let related back to the example that had given above the car seller is still remain the same revenue that is RM 35 000 for each car. In conclusion when the car duties cut down the supply of
Microeconomics
GROUP ASSIGNMENT
Lecturer’s Name: Madam ONG HWAY BOON
Section: BC 177
Article: The Malaysian Insider (27 July 2012)
List of members:
NAME
ID NO
Tan Hui Juin
1122701693
Lai Zhi Wei
1122702253
Felicia Mah Phui Mun
1122701689
Toh Han Lin
1131120643
Koh Kai Bin
1131119181
a) Will there be an increase or decrease in demand?
There will be an increase in demand of car because the tax of car has been cut for public, it cause the price of cars decrease, so the demand of car increase. The increases in demand cause the demand curve shift to rightward. The decreases of tax will increase the disposal income of individual, so that they have more income that can use to buy other things. Besides that, tax decreases also can decrease the debt of individual because they pay less tax, so they can use their extra money to buy car.
Price D1 D
0 Quantity
b) Will there be an increase or decrease in supply?
In the article that we choose, it is talking about a cut in car duties. When the car duties cut down by the government, this will affect the price of car decrease. For example, let say the car duties is set at 65 per cent, when a Malaysian purchase a car of RM 100 000 has total RM 65 000 is goes to the government and the price before duties actually is only RM 35 000.When the car duties cut down to 20 per cent this means consumer only need to pay RM 55 000 to get the same car. So this show a cut in car duties will decrease the price of car. When the price of car decreases the demand of car will increase, but the supply of car will remain unchanged this is because, the change in price of car does not affect the revenue for selling each car. Let related back to the example that had given above the car seller is still remain the same revenue that is RM 35 000 for each car. In conclusion when the car duties cut down the supply of