sellers‚ an easy entry and exit from the market‚ homogenous products‚ and price takers. Having no control over the product’s price‚ a price taker is a buyer or seller that possess minimum market power and must “take” or accept the ongoing price. Based on the price determined in the market‚ a perfect competition sets a production level. Market supply and demand conditions as well as the competition within the industry set the price of the goods sold. This causes a perfectly competitive firm to face a
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Assignment 1: Economic Basics (24.0 points) 1. Describe two examples of important things that financial planning skills can help you do‚ and explain why these things are important to you personally. (4-6 sentences. 2.0 points) One example of financial planning that could help me would be saving for a new car. Another example would be saving for college. Saving for a new car is important because I will need a car for work and college. Saving for college is important because I want to
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Q2: Problem 3 (Chapter 1 Appendix) on textbook pp. 34 (10%) Victor Fuchs (1996) lists the following questions in an article in The Wall Street Journal. Identify whether the following questions involve positive or normative analysis. All the questions deal with a Republican plan to reform Medicare‚ the public health insurance program for the elderly. A. How many Medicare beneficiaries will switch to managed care? B. How much should the younger generation be taxed to pay for the elderly? C. Should
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Case No. 2 : On Demand and elasticities in the Higher Education industry. Higher education has long been provided for by the governments at subsidized rates. But increasingly private players have entered this industry and are operating as profit seeking entities. With this drastic change in outlook the issue of pricing in this industry- that of tuition fee‚ is becoming a very important one. Mr. Harry Sabarwal president of Prime Institute of Higher Learning is very pensive because his institution
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strategies to make low-calorie microwavable food inelastic‚ we must understand the meaning of elasticity. Elasticity or price elasticity is a measure of quantity demand responded when price is changed‚ that is‚ it a measure of responsiveness of the consumer due to price change. It is measured as the ratio of the percentage change in the quantity demanded and percentage change in price. If the elasticity of demand is greater than one‚ we say that demand is elastics‚ if it is less than one‚ we
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Abstract The aim of this study is to investigate how depreciation could affect the export sector in selected Asian countries. Theoretically‚ depreciation will bring positive impact on trade balance. However‚ it is only possible when the sum of the elasticities of demand for export commodities and demand for import goods is greater than unity. Accordingly‚ this study found no evidence for the effect of depreciation to improve trade balance of about 14 Asian economies. This was perhaps due to the fact
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increase in the price of labor for making bicycles the supply would decrease because it would cost more to make the bikes and the supply curve would shift to the left. There would be no change in the demand for the bicycles. Instructor Explanation: Since a change in costs to produce the product is a supply factor‚ a decrease in costs would be expected to increase bicycle supply. Remember that supply is a schedule of how many units suppliers are willing to offer at different prices. When costs
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Chapter 1 Introduction Multiple-Choice Questions 1) The best definition of economics is A) how choices are made under conditions of scarcity. B) how money is used. C) how goods and services are produced. D) how businesses maximize profits. Answer: A Level of Difficulty: Easy 2) Managerial economics is best defined as the economic study of A) how businesses can make the most profits. B) how businesses can decide on the best use of scarce resources
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internationally active (at least in two different economic environments). Environment 1A Business: LUMOS Environment difference: Demand difference/ focus of a business to one country. Counties: Netherland – UK Methods: cause‚ solution(s)‚ ED ( Elasticity of Demand)‚ challenges‚ effects. Cause The main cause would be origin‚ LUMOS is based in the UK‚ has an British founder and aims on the British public. However this does not mean that all the marketing they produce is reaching British people
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I would say that when I think of a company that has inelastic demand on their products it would have to be Apple. Apple charges above average prices for their phones‚ computers and music players all with the marketing strategy of superior quality. When a company achieves inelastic demand it is because of two possible reasons. They have either developed highly differentiated products or brands or they have achieved a monopoly on a market or product category. (Tedesco‚ 2011) If you look at Apple they
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