...the country. The effect that this will have on the demand for fuel is explained in this report, using the demand and supply model and also the priced determinants of demand. The report also explains the effect the removal of the subsidies will have on the revenue of the people supplying the fuel. The increase in fuel prices has a flow on effect increasing the prices of other goods which use fuel in their production. Question 1 The supply and demand model shows that when supply and demand quantities are balanced we have an equilibrium price. Once the price increases over this equilibrium price the demand decreases and supply increases which results in a surplus of good. When the price drops and demand increases it results in a shortage of goods. This is shown in diagram 1 below. Diagram 1 (Word Press 2011) The removal of the subsidy will mean there is an increase in the price of fuel making it too expensive for many consumers and therefore decreasing demand which may result in a surplus of fuel. Question 2 A “Elasticity of demand is a measure of how responsive consumers demand is to a change in the price of a product” (Jackson et al 2012, page 61). Inelastic demand occurs when the change in the price of a product has little impact on the quantity demanded. The price elasticity of demand for fuel in Nigeria is inelastic, as the increase in price from the removal of the subsidy would have little impact on the demand for petrol. I have reached this answer based on the...
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...Economic Supply and Demand Analysis Tammy Costello MBA 502 April 20, 2014 Hector Morales Economic Supply and Demand Analysis Novo Nordisk has offered a significant amount of data involving their manufacturing of insulin to the general public. They have estimated that as populations change and diabetes is moving more into the cities we will find that two out of three people that have diabetes will reside in the city. “By 2030, it is estimated that more than half a billion people will suffer from diabetes with nearly two-thirds of everyone with diabetes living in cities, and those who move to cities are significantly more likely to develop diabetes than those who remain in rural settings” (Novo Nordisk, 2013). Census now show that more people now reside in the city than in the rural areas of the country. Now the population is at 52% and is thought to rise to 70% by the year 2050. Because of the economic strength and higher consumption, to inactive lifestyles and the inability to obtain good health care has given rise to the higher numbers of diabetes in our country. One of the main concerns of diabetic patients remains how they will pay for the necessary medications and supplies needed. In my research I have found that without insurance it can be relatively expensive especially for those on fixed incomes. The estimated prices for a vial of novo log insulin ranges from $143.00 to 200.00, 3 flex pens of novo log $207.00 to $250.00, and 3 cartridges $203.00 to...
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...Key Assignment (2) – Economic Growth and Supply Side Policy 1. Evaluate the use of supply side policies to achieve economic growth Supply side policies are polices designed to improves an economy’s productive potential and its ability to produce, which contributes to a faster rate of growth of real national output. Governments believe achieving sustained growth without causing a rise in inflation is dependant on improving supply-side performances. The perks of supply side policies are that it helps economies to develop labour productivity, reduce unemployment, and improve trading to help achieve economic growth. A key aim for supply-side policies is to decrease the level of unemployment in an economy. The policy is designed to improve the quality and quantity of the supply of labour available to the economy. A growth in labour supply increases the productive potential of an economy. Increased quality will improve the productivity of labour. A reduction in unemployment can be achieved through cuts in Income tax, providing an incentive to work. As income tax is paid directly from an individuals earned income, a lower income tax will act as an incentive for unemployed workers to join the labour market, or for existing workers to work harder. This is as result of them being able to keep a high proportion of the money they earn. An increase in national output can be accomplished as lower corporation tax provides an incentive for entrepreneurs to start a business or organization...
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...Phase 1 IP – Intro to Economic Thinking Frank K. Chadmon Colorado Technical University Online Professor Olanrewaju November 25, 2013 The mixing of supply and consumer demand is very important to consumers because the combination of these two typically sets the price of a good or service. The final market price is dependent upon both of these components of a market. When buyers and sellers agree on a price, that’s called the equilibrium price. For consumers and sellers, the law of supply and demand is a rule of thumb that holds true in the market. With other things being equal, price and the quantity demanded are inversely related; this means the greater the demand for a product or service, the higher the price and lower the demand for a product or service, the lower the price. Other things being equal, refers to factors that can affect demand, such as the availability of substitute goods or changes in consumer tastes. This analysis will provide a discussion of how supply and demand affects consumers, especially with respect to price, availability of goods or services. In the law of supply and demand, the quantity demanded is distinct from demand, which refers to the entire relationship between price and quantity demanded. There are a number of factors that affect both supply and demand and, as a result, consumers. When demand or supply for a good or service changes, the equilibrium price for the good or service changes also, so changes in demand or supply always have...
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...inelastic demand Elastic and inelastic demand Task A 1. Elasticity of Demand measures sensitivity of the demand for a good to a price change. If the price of a good matters little, a change in the price of that good will have a small impact on one’s willingness to sell or buy and this would indicate an inelastic situation. However, if a small change in prices causes substantial changes in one’s willingness to buy or sell, the good is said to be elastic. McConnell, Brue, and Flynn (2012) note that when demand is elastic a decrease in price will increase total revenue because even though the price is less the additional goods sold make up the difference. Conversely, if the demand is inelastic, price decreases reduce total revenue. When the percent of increase or decrease in the price of a good is equal to the demand percentage the case is unit elastic. 2. Cross-price elasticity of demand measures the sensitivity of quantity demanded of a good when the price changes on another good. When two goods are substitutes, the price of one good increases the demand for another good. Airlines A and B have routes that are the same. As airline, A raises the price of their tickets consumers will likely change to airline B. This is a simple explanation of substitution. A good is considered a complement to another when the demand of product A is increased after the price of product B is decreased. 3. Income elasticity measures the relationship between a change in demand for a...
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...Assignment 1 Explain the difference between the law of demand and the law of supply. What does the phrase ‘other things equal” mean? Why do we need that? Answer: The difference between the law of demand and the law of supply is that they both move into opposite direction. The law of demand states that the consumers will demand more of goods or services if the price goes down. The variable of the price drop creates an incentive to increase the demand for the goods and services. The law of supply moves in the opposite direction with its main focus being the suppliers of goods or services. There will be a larger incentive for the increase of goods supplied if the price increases. Both of these laws use the “other things equal” assumption or ceteris paribus. This assumption is used when identifying the relationship between two variables like a price and quantity. By using this assumption, economists can isolate the variables so other factors will not affect the development of the theory. When we see the term other things equal we know that this assumption is made to indicate that other variables are not changing or affecting the variables of interest. Without this assumption it would be impossible to develop theories about the relationships and make a causal connection between two variables that can be identified. 2 In your own words, explain the difference between a movement along the demand curve and a shift in demand. Then, provide an example from your own personal life where...
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...Introduction to Economics BS1547 Introduction to Economics Macroeconomics Assignment- 1 Neo-Classical and Keynesian “The study of how society, and those in society allocate scarce and hence valuable resources between competing uses can be defined as Economics”(Jones, 2013) which was founded by Adam Smith in 1776. “The field of Economics that deals with the aggregate economy and changes in its level of unemployment, national income, growth rate, GDP, inflation and price level is called Macroeconomics.”(www.investopedia.com) As economics developed two distinct approaches were seen to immerge the Neo Classical which stated that Macroeconomics = ∑Microeconomics and the Keynesian which stated the opposite. Both these approaches are still followed in the managing of the present world Economies. Figure 1. As seen above, Neo classical approach lasted several years before the Great Depression, but was revived once again after the period of stagflation when the Keynesian approach failed to improve the economic condition. The Neo Classists approach influenced by Adam Smith and others with reference to the ‘invisible hand theory’ (Jones, 2013) stated that the “market is best left alone and that it will adjust and clear itself and hence finding its own macro-equilibrium.” (Jones, 2013) Keynes suggested that this is not realistic approach and that “government intervention is needed for the market to reach its macro-equilibrium.” (Jones, 2013) The Neo Classical approach towards Economic production...
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...In economics, derived demand is demand for a factor of production or intermediate good that occurs as a result of the demand for another intermediate or final good.[1] In essence, the demand for one is dependent on that whose demand its demand is derived from. For example, if the demand for a good such as wheat increases, then this leads to an increase in the demand for labour. For another example, demand for steel leads to derived demand for steel workers, as steel workers are necessary for the production of steel. As the demand for steel increases, so does its price. The increase in price means manufacturers of steel can gain more in revenue if they produce more steel, thus leading to a higher demand for the resources involved in producing steel.[1] Demand for transport is another good example of derived demand, as users of transport are very often consuming the service not because they benefit from consumption directly (except in cases such as pleasure cruises), but because they wish to partake in other consumption elsewhere.[1] Derived demand applies to both consumers and producers. Producers have a derived demand for employees. The employees themselves do not appear in the employer's utility function; rather, they enable employers to profit by fulfilling the demand by consumers for their product. Clearly, the demand for labour is a derived demand from the demand for goods and services. Another example is farm production and the demand for fertilizer. The demand for...
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...Entry/Exit Demand Analysis [ to cite ]: Peter R. Dickson and Alan G. Sawyer (1984) ,"Entry/Exit Demand Analysis", in NA - Advances in Consumer Research Volume 11, eds. Thomas C. Kinnear, Provo, UT : Association for Consumer Research, Pages: 617-622. Advances in Consumer Research Volume 11, 1984 ENTRY/EXIT DEMAND ANALYSIS Peter R. Dickson, The Ohio State University Alan G. Sawyer, The Ohio State University ABSTRACT Past methods of measuring consumer response to the price of a branded good are reviewed and critiqued. A new approach- Entry/Exit Demand Analysis--is described. The method borrows from and improves past methods. Some initial evidence about the technique's test-retest reliability is presented. INTRODUCTION One of the most troublesome problems that confronts management is estimating the responsiveness of demand to changes in price. In the past, experienced managers may have been able to intuitively assess price elasticity based on a history of strategic price increases and decreases. However, over the last decade, many of the street-wise managers may have lost their touch because consumer demand has become much more volatile. Inflation, recession and cultural trends are three factors that have made the tracking of demand curves and price elasticity an even more elusive exercise. Inflation has changed the real purchasing power of the dollar and consequently required consumers to frequently change their reactions to price. Consumers have to adjust to both changes in...
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...This assignment provides an economic analysis of South African Maize. The objective of the assignment is to find a non –governmental price regulated commodity and examine the determinants of demand and supply, as well as prices, and elasticities of the commodity Table of Contents Introduction: 2 The determinants causing shifts in demand and supply: 3 Price movements: 4 Price and/or income elasticities: 4 Conclusion: 5 References: 5 Introduction: In Africa, South Africa’s economy is one of the largest (one-quarter) contributor’s to the nation’s economic Gross Domestic Product. Even though the manufacturing sector is now a sizeable donor to the South African economy, commodities do still provide an ample section to the economy (Simpson, 2012). A commodity is known as a raw material this is exchanged (bought and sold) by trade partners. It can also be a primary agricultural product (Parkin et al., 2008: ). South Africa’s agricultural sector does not have a large impact on a global scale upon the world’s agricultural trade. Although does export cereal grains in large quantities as well as stocks the country with cereal grains’ seeing as it is one of South Africa’s staple foods (Simpson, 2012). In economics, questions result from people wanting more than they can get. What is available for individual’s consumption is limited by time; incomes received; and by the prices of the goods and services people must pay. The goods and services available are constrained...
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...Australia’s economic growth relies on Asia’s continuing demand for resources Nadhira Prisari PRIND1203 MME101 Business Academic Skill Christopher Notsis Assignment 2 January 21st 2013 Australia’s economic growth relies on Asia’s continuing demand for resources Many countries in Europe and US are dealing with fiscal crises, banking sector instability and serious downside growth risk. Fortunately, Das (2012) point out that Australia has a great probability in the future to face global economy problems. Australia is rich in natural resources, and because of their natural resources, it helps Australia to show a great performance in economic sector (Das, 2012). Australia’s economy activity keeps increasing, also added by the amount of demand for exports from China. With the large demand of exports from China, it proposes new opportunity in diversifying trade relations from European Market. Unfortunately, Australia is too depending itself on Asian demand. If decreases happen in demand from China, it will affect headline GDP growth. From now on, the intention of this discussion is to Australia’s economic growth, which relies on Asia’s continuing demand for resources. Nowadays, Australia’s growth is really depending itself to china’s demand. Plumb, Kent, and Bishop (2012) mention that the boom in the resource sector is one of the sectors that got an effect from strong growth in Australia. Plumb, Kent, and Bishop (2012) say that...
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...Without determined economic policies and strong political will, the United States may have never recovered from the many economic crises it has faced. Economic policies encompass a wide range of government measures to change the economy, and are extremely important for reversing downturns in the economy. The goals of economic policy are economic growth, stable prices, and full employment of the workforce. In general, an economic policy is successful if it reduces unemployment, reduces inflation, and encourages economic growth although these are not the only metrics. There is debate among economists over whether supply-side or demand-side are best for economic growth, coupling these with monetary policy are key for maintaining a healthy economy....
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...deals and increasing profits, the ECB has faced increased pressure from County Clubs and the associated Test Match venues to alter its previous ticketing and test match venue selection policy. From 2017 ticketing costs and revenue will no longer be the sole responsibility of the Test venue and instead the venue and the ECB will share ticket revenue. The remainder of this essay will therefore focus on commercial revenue, notably the sale of England Team Test match tickets. It will introduce economic theories relevant to the sports market and will attempt to assess the usefulness of economic theory in analysing demand for these products. It will discuss the response made by the sport market to an increase in the price of these products and will examine strategies the ECB can use to increase its market share. Critically assess the usefulness of economic theory in analysing the demand for the products / services offered by your chosen organisation Before examining economic demand theory it is important to establish several key characteristics of sport as a commodity. It is possible to classify sport under three headings. First, sport can be described as a non-durable consumption good....
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...Containers Markets in China: Industry Growth, Economic Trends, Demand, Capacity, Analysis Report" Report Overview China's demand for Food Containers has grown at a fast pace in the past decade. In the next decade, both production and demand will continue to grow. The Chinese economy maintains a high speed growth which has been stimulated by the consecutive increases of industrial output, import & export, consumer consumption and capital investment for over two decades. This new study examines China's economic trends, investment environment, industry development, supply and demand, industry capacity, industry structure, marketing channels and major industry participants. Historical data (2004, 2009 and 2014) and long-term forecasts through 2019 and 2024 are presented. Major producers in China are profiled. Browse Complete Report at: http://www.researchbeam.com/food-containers-in-china-market The primary and secondary research is done in China in order to access up-to-date government regulations, market information and industry data. Data were collected from the Chinese government publications, Chinese language newspapers and magazines, industry associations, local governments’ industry bureaus, industry publications, and our in-house databases. Interviews are conducted with Chinese industry experts, university professors, and producers in China. Economic models and quantitative methods are applied in this report to project market demand and industry trends. Metric system is...
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...Latatsha Keeten Eco / 561 July 28, 2014 Genevieve Turano Introduction The United States health care system relies heavily on private health insurance, which is the main source of coverage for most Americans. According to the Center of Disease Control, approximately 58% of Americans have private health insurance. The primary public programs are Medicare, a federal social insurance program for seniors and certain disabled individuals and Medicaid, also referred to as Medical. These two are funded jointly by the federal government and states but managed at the state level, which covers certain very low income children and their families. Health advocacy companies initiated to become visible to assist patients muddle through the complexities of the healthcare system (Wikipedia, 2014). In 2010 President Obama signed into law the Patient Protection and Affordable Care Act. This Act includes individual mandate that every American must have medical insurance or pay a fine at tax time (Obama Care Facts, 2014). Before the enhancement of medical expense insurance, patients were presumed to pay health care costs out of their own pockets, which is known as the fee-for-service professional standard. Hospital and medical expense policies were introduced during the first half of the 20th century. During the 1920s, individual hospitals began offering services to individuals on a pre-paid base, eventually leading to the development of Blue Cross organizations. The predecessors...
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