...dwindling number of cattle and growing export demand have tightened the supply and caused the average retail cost of fresh beef to climb. This article describes how the drought and extreme weather over the last year has caused such a decrease in cattle that consumers on all scales are feeling the impact in prices. Restaurants are forced to change the portion sizes and menu items to adapt to the rise in prices. It’s estimated that prices on beef have risen ten to twenty percent in the last year. The average retail cost of a pound of fresh beef in January 2014 was $5.04, in the next month it rose a significant 24 cents per pound. They are expecting demand and prices to increase in the summer. This year has been the highest in beef prices since 1987. I looked at the average of beef prices for the last five years; the average price for this time frame was $4.02. Beginning January 2014 we are already up a dollar a pound over the last five year average. The average beef consumption in the US is approximately sixty-seven pounds per year per person. There are a lot of things that affect the cost of beef, with these things raising the drought and weather is not the only things to blame. Cost of feed, gas to transport, exporting from other countries are all things that can affect the prices of meat. As the prices go up, the demand from the consumer goes down, as we have other food options. This causes a downward slope in the demand curve, moving the shift to things like poultry and produce...
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...ECO204-Principles of Microeconomics Ashford University Prof. Evelyn Bolden Supply and Demand Curves Do you agree or disagree with each of the following statements? Briefly explain your answers. 1. The price of a good rises, causing the demand for another good to fall. The goods are therefore substitutes. Substitute goods are those that can be used in place on one another -- Pepsi and Coke, for example. Substitutes are different goods that compete with the one under consideration. Therefore is the price of Pepsi goes up, it caused for Coke to increase its demand not fall. As a result, I disagree with the above statement. Increase in the price of a complement for X P Q 2. A shift in supply causes the price of a good to fall. The shift must have been an increase in supply. I agree with the above statement, because a change in supply affects the price and quantity of the product. a. An increase in supply (a shift rightward of the supply curve) causes the price to fall and the quantity to increase. b. A decrease in supply (a shift leftward in the supply curve) causes the price to rise and the quantity to decrease. 3. During 2007, incomes rose sharply for most Americans. This change would likely lead to an increase in the prices of both normal and inferior goods. When individuals have more income, they are normally more likely to purchase a good at...
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...Economics Report and Demand & Supply curve Of cigarettes in Australia Introduction: Recently, there has been a new trend in the tobacco industry in Australian society due to the increased prices of cigarettes, mainly for the reason that “with more than 3.1 million people still smoking today, tobacco still being the leading cause of death by a wide margin… “ (Scollo & Winstanley, p.xiii, 2008). Therefore, this report will illustrate the market structure of Australia tobacco industry, and then make analysis about the price chances on the demand and supplies for cigarettes. The third and the fourth part of the report are about the impacts of this change and some government policies for the tobacco industry, respectively. The market structure: Table 1: Tobacco companies operating in Australia: summary table for 2006-07 | BATA | PMA | ITA | Total revenue ($m) | 1476.7 | 623.3 | 386.5 | Net profit after tax ($m) | 410.7 | 172.6 | 2.7 | Shareholders’ funds ($m) | 632.6 | 403.4 | 25.1 | Total assets ($m) | 2962.1 | 627.5 | 176.7 | Number of employees | >110019 | 691 | 299* | Approximate market share in Australia (%) | 4619 | 34* | 1820 | * Figure for 2006 ** Figure assumed on the basis of market share reported by BATA and ITA, and assuming that a small percentage of the Australian market is accounted for by imported brands. Source: The BRW 1000, BAT website, BATA website, Imperial Tobacco Group Website. The tobacco industry in Australia has been considered...
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...ECON-112 Principles of Microeconomics Problem Set #8 (Practice Only)-SOLUTIONS Posted: Wednesday, December 4th, 2013 Due Date: None 1. Mankiw (6th edition), Chp17, Problem 6 (page 370) a. The payoffs are: Your Decision Work You get 15 units of happiness Work Classmate gets 15 units of happiness You get 5 units of happiness Shirk Classmate gets 30 units of happiness Shirk You get 30 units of happiness Classmate gets 5 units of happiness You get 10 units of happiness Classmate gets 10 units of happiness Classmate’ s Decision b. The likely outcome is that both of you will shirk. If your classmate works, you’re better off shirking, because you would rather have 30 units of happiness rather than 15. If your classmate shirks, you are better off shirking because you would rather have 10 units of happiness rather than 5. So your dominant strategy is to shirk. Your classmate faces the same payoffs, so he or she will also shirk. Best responses are in bold. c. If you are likely to work with the same person again, you have a greater incentive to work, so that your classmate will work, and you will both be better off. In repeated games, cooperation is more likely. d. The payoff matrix would become: Your Decision Work You get 15 units of happiness Work Classmate gets 65 units of happiness You get 5 units of happiness Shirk Classmate gets 50 units of happiness Shirk You get 30 units of happiness Classmate gets 25 units of happiness You get 10 units of happiness Classmate gets...
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...In business decision making most useful tool is demand and supply. Demand and supply are very broad area in economics. It will talk about very thing in the business. If do not know about the demand and supply, then cannot make a decision on the business. In this easy will discus about the demand and supply and other tools of business decision making. A market is a set of arrangement by which buyers and seller exchange goods and services. Let us look about demand. Demand can be described as the relationship between quantity demanded for a particular good or service in specific circumstance. Also demand is define as the quantity of a good or service that consumers are willing and able to buy at a given price in a given time period. Each of us has an individual demand for particular goods and services and the level of demand at each market price reflects the value that consumers place on a product and their expected satisfaction gained from purchase and consumption. The following example gives a demand curve. Price | | | | | | | | 30 | | | | | | | | | | | | | | | | 20 | | | | | | | | | | | | | | | | 10 | | | | | | | | | | | | | | | | 0 | 2 | 4 | 6 | 8 | 10 | 12 | Quantity | The demand curve shows an estimate about the relationship between the price of any particular product or service and the quantity of that product that will be demanded by consumers. It is usually assumed to slope downward, in the general...
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...Exchange and Demand Individuals engage in four fundamental activities which reduce the burden of scarcity: exchange, production, specialization, and entrepreneurial activity. Markets and prices facilitate these activities and these activities form the basis of market activity which we study using supply and demand analysis. We will examine voluntary exchange along with a detailed development of the demand curve. We will also, see exactly how pure exchange reduces the burden of scarcity. I. Introduction We will see that the demand curve is the result of individuals making choices constrained by scarcity. Individuals are assumed to be rational, that is, to make choices which maximize their utility, where utility is defined as the want-satisfying ability of the goods consumed. A rational individual chooses from among the possible combinations of goods, that particular combination which maximizes her utility—that which makes her as well-off as possible. The possible combinations from which the individual can choose are limited because of scarcity. In a market economy the individual confronts scarcity in the form of prices, the fact that time is scarce and in the form of limited quantities of goods he or she owns which can be sold to buy other goods. Prices here are the prices of the goods the individual buys and sells, and they include not just prices of consumption goods but also wages, interest, rents, and profits. For most of us the primary good we sell is our labor services,...
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...the commodity which in simple terms referred as demand. For most of the commodities if prices soar high then people purchase less good hence reducing demand in the same way if supply increases prices go down increasing demand. This basic principle is the basis for the ‘law “of demand which can be described as quantity demand plummets as prices go upward, other variable factors constant. To understand the demand and price relation economists refer demand as schedule of quantities of commodity people want to buy at various prices, other factors constant (Colander, Rockerbie, & Richter, 2006, p.73). Whereas quantity demand is referred as demand of goods at certain price in the demand curve. Ursinus College in Pennsylvania in the year 2000 increased their tuition fee 17.6% to $23,460 in order to increase college revenue and funds to support financial aid which also in turn increased their admissions (Brickley, Smith, & Zimmerman, 2009, p.110). The conjecture of college president is increase in demand is against the law of the demand because of college going student’s snob mentality and their comparison of quality with respect to price. He speculated student’s presumption of costly colleges will have better quality education compared to cheap colleges so demand for their admissions increased. Soon after Ursinus College doing well with their strategy many other colleges increased their tuition fee according to the demand curve it fetched them more admissions as it did in Ursinus...
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...w w w e tr .X m eP CAMBRIDGE INTERNATIONAL EXAMINATIONS GCE Advanced Subsidiary Level and GCE Advanced Level e ap .c rs om MARK SCHEME for the October/November 2013 series 9708 ECONOMICS 9708/42 Paper 4 (Data Response and Essays – Supplement), maximum raw mark 70 This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began, which would have considered the acceptability of alternative answers. Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for Teachers. Cambridge will not enter into discussions about these mark schemes. Cambridge is publishing the mark schemes for the October/November 2013 series for most IGCSE, GCE Advanced Level and Advanced Subsidiary Level components and some Ordinary Level components. Page 2 Mark Scheme GCE AS/A LEVEL – October/November 2013 Section A Syllabus 9708 Paper 42 1 (a) In what type of market structure is Unilever likely to be operating? Explain your answer. [3] It is a large multinational company so the size would indicate that it is in an imperfectly competitive market. This means it has some control over its price decisions, that it has branded products, which implies that it advertises. Allow 1 mark for market economy/mixed economy/diversified...
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...evening students. The assessment of the potential joint venture we will determine if there is enough demand as revealed from student surveys, to legitimize the proposal to sell pizzas on each campus each evening in a mutually beneficial fashion. For the university it would allow for students and faculty to dine and work together for the first hour of each class, and for Domino’s the potential gains include larger profits and expanded business opportunity. To collect information, every evening of the week students and faculty were asked to complete a survey to help determine if there is enough demand and how cost points may affect that demand. The demand and forecast for pizza will determine if it is justified to move forward with the proposed joint venture. When completing a demand analysis it is important to test and review the proper demographic and independent variables. In the proposed University-Domino’s joint venture the surveys collected many data points. The demographic variables included students age, number of people in the household, and approximate household income. The independent variables included number of fast food restaurants passed, distance of commute, whether the student is coming to class straight from work, number of times fast food is eaten weekly, amount spent when eating fast food, and if a drink was purchased. The demand function, also known as the curve will specify the relationship between the various price points of pizza and quantity demanded....
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...effects the budget forecasting had, management dived into the influential factors that affect sales. For example season trend alerts like decrease in sales in November and December due to low level of end of year inventory. As well as less sales, due to summer plant shut downs. These factor are all effecting the demand and shipment of Treat. The main problem identified was that end of year sales increased due to buildup of inventory, and the reaction to the buildup was as late as two months. We believe that Harman Food’s faces the same challenges that many manufacturers, distributors, wholesales, and retailers due. When manufacturing products there seems to always be tug of war element between production and sales. Pull to strong on one side and the supply demand curve shifts and the same for the other side. The important thing is to identify product and market variables. The variable will be consistent, as the product or market can fluctuate. This will allow for a steady balance. The manager did a good job of identifying all the steps for the product, as well as digging deep into the layers of the forecasting affects and redlining the elements that shift supply and demand. This is the primary step in creating a balance between forecasting and budgeting. Knowing your product trends and market fluxions will helps fill in the blanks for forecasting and budgeting. Aside from this, creating a product and market...
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...RESEARCH METHODOLOGY Topic:- Analysis of bandwagon effect on youth CHAPTER 1 1.0 Introduction 1.1 Statement Objective: To analyze the factors which create a bandwagon effect on youth and study their effects. 1.2 Why this topic? In 1999 a huge craze being described as Potter mania came into existence following the humungous hype created by the harry potter fans. This led to a huge demand for harry potter books, movies and goodies. Millions of fans waited in lines outside the book stores to get their first copies of the books. These people known as the ‘Potter heads’ created a huge fandom which included both children and adult alike, despite J.K Rolling original marketing the book for children aged 9-12. Thus, here in this research paper we are analyzing the various aspects and factors causing this bandwagon effect esp. among youth. • Why individuals make irrational choices based on the information they receive from others? • Why people decide to ignore their personal information signals and follow the behaviour of others? • What are the major drivers to propel this behaviour? • What common factors are found among such people? What differentiates them from other sections of population. • What are the pronounced effects to be seen? Are they good or not? Etc. In layman’s term the bandwagon effect refers to people doing certain things because other people are doing them, regardless of their own beliefs, which they may ignore or override....
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...Supply and demand are basic economic concepts that are usually applied in a market environment where there is a presence of a manufacturing firm and consumers. Both are also components of an economic model which is an instrument in determining the price and quantity of a particular product in a given time or place. “Supply” is defined as “the amount of goods or services that can be provided by a company to its consumers or clients in an open market” while “demand” is said to be “the willingness of the consumers or clients to buy or receive products or services from a firm in the same open market.” These concepts are always present in every economic activity – whether in business and anyplace where economic exchange is present. In economics, both concepts also adhere to their own respective laws. The law involves a particular concept and its relationship to the price and its counterpart concept. The law of supply states that the supply and price are directly related. If there is an increase in price, the same increase applies to the supply due to the owner’s increased production and expectation of profits. If the price goes down, there is no reason to increase production. On the other hand, the law of demand conveys the inverse relationship between price and demand. If the demand is high, the price goes down to make the product more available, and the reverse happens when the demand is low while the price goes up to make up for the product costs. Both laws only apply as there...
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...Supply and Demand Simulation Thomas Alejandro ECO/365 February 17, 2014 Mubarak Laminu Supply and Demand Simulation The supply and demand simulation is based on the management of rental apartments by GoodLife Management in the fictional town of Atlantis. Atlantis is a small city with open spaces, low population, and a low crime rate. There are plenty of sidewalks and street systems for easy access to the highway. The housing in Atlantis is detached homes and apartments. At the beginning of the simulation GoodLife had 2,000 two-bedroom rental apartments and is required to decrease the monthly vacancy from 28% to at least 15% to increase revenue. GoodLife has to find what rental rate to input so all expenses are covered. There are many changes to the simulation that affect supply and demand. There are also shifts in the supply and demand that affect the decisions made by GoodLife. Four key points emphasized in the simulation are; supply and demand, equilibrium, shifts in the supply and demand, and price ceilings. The concepts in the simulation can be related to the workplace of the author of this paper. Factors that affect supply and demand in the simulation are driven by the number of available two-bedroom rental apartments, the demand for the rentals, the number of available renters, and the price. According to the simulation, a demand curve is downward sloping, and as the price decreases, demand increases. The supply curve is the opposite of the demand curve...
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...Practice Questions and Answers from Lesson I-4: Demand and Supply Practice Questions and Answers from Lesson I-4: Demand and Supply The following questions practice these skills: Describe when demand or supply increases (shifts right) or decreases (shifts left). Identify a competitive equilibrium of demand and supply. Describe the equilibrium shifts when demand or supply increases or decreases. Describe how prices or gross substitutes or gross complements shift demand. Describe how input costs or production costs shift supply. Aggregate individual demand into market demand. Describe how effective price ceilings cause shortages. Compute some special demand curves and some special supply curves from verbal descriptions. Question: A survey indicated that chocolate is Americans’ favorite ice cream flavor. For each of the following, indicate the possible effects on demand, supply, or both as well as equilibrium price and quantity of chocolate ice cream. a. A severe drought in the Midwest causes dairy farmers to reduce the number of milk-producing cattle in their herds by a third. These dairy farmers supply cream that is used to manufacture chocolate ice cream. b. A new report by the American Medical Association reveals that chocolate does, in fact, have significant health benefits. c. The discovery of cheaper synthetic vanilla flavoring lowers the price of vanilla ice cream. d. New technology for mixing and freezing ice cream lowers manufacturers’ costs of producing...
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...Supply and Demand Simulation This paper discusses the Applying Supply and Demand Concepts simulation from the student website. First, it seeks to identify two microeconomic principles and two macroeconomic concepts presented in the simulation with explanations why they are categorized as macro or microeconomic. It also identifies one shift of the supply curve and one shift of the demand curve and the shifts’ cause. Additionally, impact on equilibrium price, decision making, and quantity are analyzed. Different ways are referred in which concepts about supply and demand can be applied in a real life/ workplace situation. Ways are shown in which concepts of micro and macroeconomics assist in understanding factors influencing movements in supply and demand, on the equilibrium price, and quantity. Finally, it explains the way in which price elasticity of demand has an impact on consumer’s purchasing, and on the pricing strategy of the company. Two microeconomic principles from the simulation are demand and supply. “The demand curve is downward sloping, and that quantity demanded increases as the price decreases, as you move down the demand curve” (University of Phoenix, n.d.). In the University of Phoenix simulation (n.d.), Good Life could increase the quantity demanded of its rented apartments only by reducing the rental rate. “The supply curve is upward sloping, and the quantity supplied increases with an increase in price, as you move up the supply curve” (University...
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