INTRODUCTION TO ECONOMICS Exercise 1 1. What determines that a resource be scarce? Why is scarcity important in defining Economics as a science Resources are seen as being scarce‚ when the wants exceed the resources. The fundamental problem of economics relates to the choices made in the face of limited resources and unlimited wants. 2. Read your local newspaper and economic magazines. Explain the difference between Microeconomics and Macroeconomics. From your research‚ give three examples
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PRICE STABILITY 1’’Price stability is the economic term used to refer to a situation where the general price level covering consumer goods remain unchanged or if it does change‚ it happens at a low rate so that it is not strong enough to make any significant influence on economic decision of participants in a economy. We encounter prices in different forms in our daily life activities as buyers or sellers when we get engaged in consumption‚ investment or trade. In market economy‚ price changes
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ABBE 1013 MICROECONOMICS TUTORIAL 5 SECTION A: MULTIPLE-CHOICE QUESTIONS 1. If an increase in income results in an increase in the demand for chicken‚ then chicken is a/ an ___________________________. A. neutral good B. luxury good C. normal good D. inferior good 2. Two goods are complements if the ____________________. A. cross elasticity of demand is negative B. income elasticity of demand is negative C. cross elasticity of demand is positive
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University of Phoenix Material Supply and Demand Curves Answer the following questions Write the definition for each of the following: 1. Law of Demand Demand is the “wants” that consumers are willing to pay for. The quantity demanded is related to price. As the price falls people demand more‚ if the price rises people demand less. People may want many things‚ however only what they are willing to purchase is demand. It is important to realize the other variables that affect demand‚
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Tutorial 3 Solutions 1) In a world of two goods‚ will the fact that one of the goods is normal have any implication regarding whether the two goods are gross substitutes or complements? Y Io 0 PY X normal Yo • A BN • C S •BN Complements ↓Px → Y↑ U0 U1 Gross substitutes ↓Px → Y↓ c • X0 X1 Io 0 PX Io 1 PX X 2) In a world of two goods‚ when the demand elasticity of good X is greater than unity‚ X and Y must be gross substitutes and X is more likely to be a normal
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Econ 1011 Study Guide Opportunity Cost The opportunity cost is the cost of the forgone alternative. (If you have many alternative it is the one which has the highest value) Total opportunity cost / economic cost = Explicit cost + Implicit cost Production Possibilities Frontier - Points inside the PPF vs. outside the PPF - Shape of the PPF - Economic growth and PPF Law of Demand Other things remaining constant‚ the quantity demanded of a good rises when the price of the good
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Macroeconomics- Study of large decision making units Types of economics Health economics‚ sports‚ national resources‚ labor‚ economic history‚ money‚ trade‚ etc. What do economists do? Economists engage in “positive analysis” Objective use of facts‚ theory‚ data‚ and models (math and stats) to make conclusions about what is or what might happen if… Objective- Unbiased‚ lacking personal opinion Might involve professional opinion Contrast this idea with “normative analysis” Opinion-based statements
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exchange market): the place where international currencies are traded Stock markets: the shares in companies are bought and sold. Demand Demand is the quantity of a goods or services that consumers are willing an able to purchase at a given price in a given time period. It is not enough for consumers to be willing to purchase a good or service; they must also be able to purchase it. The law of demand As the price of a product falls‚ the quantity demanded of the product will usually increase
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diversified; it consists of 4 major sectors in Pakistan: distributive‚ producer‚ personal and social services. Distributive services is further distributed into subsectors i.e.‚ transport‚ communications and trade sector. It provides convenience to consumer‚ household and profits for traders. Producer services consist of financial sector which provides the capital for industrialist and business community. Personal services provide public goods and shelter to citizens. The social services sector is
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Demand and supply Demand is defined as the amount of the products and services which buyers ready to buy at all price. It has been observed that most interesting of point buyer’s General response towards price when the price goes down consumer tend to buy products. Therefore when we think about Supply means there are other sellers in the market who is willing to sell their product in the market at the price. (C. Klein‚ 2010).Demand and supply both are play very important role in economics filed.
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