has zero slope. Explain. 4. What does ceteris paribus mean? Why is the concept useful to economists? 5. Why does the distinction between a positive and a normative state matter for economics? 6. What is a model? Why do economists use models. 7. Why is the shape of the economy’s production possibility curve concave? 8. The following data show the production possibilities for a hypothetical economy during one year: Output of X Output of Y 1000 0 800 100 600 200 400 300 200 400 0 500 (a)
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Price Elasticity of Demand is used to measure the responsiveness of the quantity demanded to the change in price. It is measured by the percentage of change in quantity over the percent change in price [% ∆ in quantity demanded/ % ∆ in price]. Price elasticity of demand (PED) does not have any units as all the units cancel out while calculating it. Also‚ │PED│ is usually negative because the value of quantity demanded will always be inverse to its price (i.e. when price gets high‚ quantity demanded
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(i) What is meant by ’cross-price elasticity of demand’? It is a measure of the responsiveness of demand for a good to a change in the price of another good. This good can either be a substitute good or complementary good. (ii) Comment on the cross-price elasticity of demand between platinum and gold. When the price of platinum rises demand for gold rises. Because gold can be a substitute for platinum people will want to buy gold more when the price of platinum increases. (b)
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Price Elasticity Of Demand is a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price elasticity of demand is a term in economics often used when discussing price sensitivity. The formula for calculating price elasticity of demand is: “Price Elasticity of Demand = % Change in Quantity Demanded / % Change in Price”. If a small change in price is accompanied by a large change in quantity demanded‚ the product is said to be elastic
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STUDY The topic is selected for the project is the Gold price fluctuations and gold as a investment. I selected this topic because of the change in the price of gold and people’s interest in investing in gold as an investment. This topic is selected due to the fluctuating nature of gold and changing trend of gold price. Nowadays people tend to invest their money in gold so as they can increase their investment according to the price of gold at that particular period. Of all the precious
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Price Sensitivity Model In the 1970s‚ Dutch economist Peter H. van Westendorp introduced a simple method to assess consumers’ price perception. It is based on the premise that there is a range of prices bounded bya maximum that a consumer is prepared to spend and a minimum below which credibility is indoubt. The Price Sensitivity Meter (sometimes called the Price Sensitivity Measurement) is based on respondents’ answers to four price-related questions. A simple and easily executable
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Price elasticity of demand (PED) is a measure of how much the quantity demanded changes when there is a change in the price of the product. It can be calculated using the formula: PED= Percentage change in Qd of the product/ Percentage change in price of the product. When determining the price elasticity of demand‚ there are many possible outcomes which range from zero to infinity. If the PED value is between zero and one‚ then elasticity is said to be “Inelastic”‚ meaning there would be less
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after the 8:30 AM CST opening. If you took the first entry which was one tick below the arrow‚ then it was a good trade all the same and it was not wrong to go short there. By waiting on the 2nd entry we got a 2nd entry short off a double top with a lower higher indicating that buyers were getting weaker and sellers were getting stronger. This was an easy short and any runners were safe as well and worth as many as 7 points depending on where you exited. 2) This was a 2nd entry short following
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Price Elasticity of Demand T ’s Jean Shop sells designer jeans. The latest trend setter has been Capri cuffed blue jeans. The demand for the Capri jeans has been very high with teenagers and young women. The business has increased its supply of Capri jeans due to the high demand. The owner‚ Terri Johnson‚ contemplates increasing the price from $9.00 to $10.00. Ms. Johnson needs to know the response of the consumers to the increased price. According to McConnell and Brue (2004)‚ the Price Elasticity
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Based on the research data provided in the case study‚ Fisher- Price should initiate the production of the ATV explorer. Fisher- Price has an industry wide reputation of producing high quality toys with strong construction‚ good engineering and attractive design. Fisher-Price is the best-known brand for preschool toys (64.7%) with a market share of 74.7%. Moreover Fisher Price was also ranked highest at 82.7% in the brand loyalty measure for toys purchased most often. Observing their sales
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