...215220 0 176 220 Q, Million kg of pork per year Q, Million kg of pork per year and a reduction in quantity. © 2009 Pearson Addison-Wesley. All rights reserved. But equilibrium quantity does not change since consumption is not sensitive to price 3-4 Figure 3.1 How the Effect of a Supply Shock Depends on the Shape of the Demand Curve (cont’d) p, $ per kg When demand is very sensitive to price… a shift in the supply curve to S2… has no effect on the equilibrium price and a substantial effect on the quantity (c) 3.30 D3 S2 S1 e2 e1 0 176 205 220 Q, Million kg of pork per year © 2009 Pearson Addison-Wesley. All rights reserved. 3-5 Sensitivity of quantity demanded to price. Elasticity – the percentage change in a variable in response...
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...CollegeofAgriculture Bachelor of Science in agribusiness COURSE SYLLABUS IN social science 4 first semester, a.y. 2013-2014 I. COURSE CODE: SOC.SCI 4 II. COURSE TITLE: GENERAL ECONOMICS WITH TAXATION AND LAND REFORM III. Course Description: This course provides a comprehensive coverage of all major topics in economics. Attention is given to establish student understands of key economic principles with particular emphasis on the Philippine Economic system, its growth and development. The course covers the foundation of economics, demand and supply analysis, the concept of elasticity, the theory of production and the fundamental concept of micro and macroeconomics with the use of simple graphical and mathematical illustrations. Likewise, the course involves topics on taxation and agrarian reform with discussion on issues and problems related to its implementation. IV. CREDIT UNIT: 3HOURS V. TIME ALLOTMENT: 54 hours/ 3 hours per week VI. GENERAL OBJECTIVE: At the end of the course, the students are expected to know the fundamental principles of economics, and their application to everyday life. SOCIAL SCIENCE 4 – GEN. ECON WITH LAND REFORM AND TAXATION Time Allotment |TOPICS/ CONTENT |SPECIFIC OBJECTIVES |TEACHING STRATEGIES |VALUES INFUSED |INSTRUCTIONAL MATERIALS |LEARNING OUTCOMES |EVALUATION TOOLS | |3 |Reflection of LSPU Vision, Mission, Goals and Objectives • Orientation...
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...prescription drugs and also how it is an important. I will be discussing increasing-cost industries as well as reviewing a perfectively competitive market. Impact of Economics An economics perspective of alcohol abuse would be that, even with significant harm is caused; they feel it should not be restricted. Economics assume that people, usually, are the best judges of themselves. Economist have also come to the conclusion that consumers tend to drink less alcohol, and have fewer alcohol-related problems, when alcoholic beverage prices are increased or alcohol availability is restricted. A possible solution to the alcohol abuse problem could be limiting which stores are able to sell the alcohol products. It is very easy to obtain alcohol and if it was not as easy to access, the sales would go down, causing the number of alcoholics to decrease. Another possible solution to alcohol abuse could be to enforce tougher penalties for alcohol related crimes and or alcohol related traffic violations. By doing this, the consumer might realize that the crime might not always be worth the time. Prescription drugs affect the supply and demand of other products and services in this country by the demand for over the counter drugs decreasing as the demand for prescription drugs goes up. More people are visiting physicians as opposed to self-diagnosing and almost expect to receive a prescription when they leave. With this...
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...Principles of Economics April 24th 2012 Economists use four basic elements when deciding on an outcome for an analysis. Those elements will help determine how to approach the problem of alcohol abuse. Often they will use cost to approach the problem of alcohol abuse. Economist would start to decide what roles alcohol abuse plays on our society. Alcohol affects us in many ways such as crime and things associated with crime for instance drinking and driving. This abuse could also lead to medical related issues such as illnesses like kidney failure or alcohol poisoning. These issues lead to costs to us as tax payers. Prosecuting someone convicted of a crime and treating them for medical related problems, cost money, which comes out of our pockets. Each year drinking while driving causes many accidents which lead to injuries and death. Thirty people a day die in alcohol related accidents, which is about one every 48 minutes. In 2009, 10,839 deaths were from alcohol impaired driving accidents, accounting for nearly one-third (32%) of all traffic-related deaths in the United States (Dept. of Transportation). About one out of three of the crashes range from drivers aged 21 to 24. Adults in the U.S. that drank too much got behind the wheel about 112 million times in 2010 which leads to the result of those 10,839 deaths. All the drivers had a blood alcohol concentration of at least 0.08% which is the maximum legal limit. About 1.4 million drivers were arrested for driving while...
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...level (VOA news 2007), and alcohol related social problem is more and more severe in Australia recently. Many scholars put up with the idea to levy more tax to reduce the consumption of alcohol. The article ‘cheap wine the biggest culprit’ is focus on wine consumption to illustrate the call for tax reform. This essay is to explain three questions mentioned following by the article. Specifically, it further examines the suggestion for heavy tax on alcohol concerning the elasticities of demand for alcohol. Question 1: Using the data provided in the article, calculate the price elasticity of demand for alcohol. According to Jackson, McIver and Wilson (2012, p.153), own-price elasticity of demand which is simply know as elasticity of demand is a way to measure the sensitiveness of consumers’ demand to a change in the product’s price, and the formula to calculate it is the percentage change in quantity demanded of a good divided by the percentage change in its price. The law of demand illustrates that the price and quantity demanded are inversely related verifying from the down-sloping demand curve, therefore the own-price elasticity must be negative. However, it is conventional to ignore the negative sign, and simply use the absolute form of the elasticity of demand. In this article, it shows that for a 10 percent increase in price of alcohol could have about 5 percent decrease in consumption. According to above formula, the price elasticity of demand for alcohol is 0.5 (5%/10%)...
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...Compute the elasticities for each independent variable. Note: Write down all of your calculations. P= 500, M= 5000, A= 10,000, I = 5,500, C=600 QD= - 5200 – 42(500) + 20(600) + 5.2(5500) + 0.20(10000) + 0.25(5000) = 17,650 Price Elasticity (Ep) = (P/Q) (∆Q/∆P) ∆Q/∆P = -42. Price Elasticity (Ep) = (P/Q) (-42) (500/17650) = -1.19 Ec = 20(600/17560) = 0.68 EA= (P/Q) (0.20) (10000/17650) = 0.11 EI = (P/Q) (5.2) (5500/17650) = 1.62 EM = (P/Q) (0.25) (5000/17650) = 0.07 Determine the implications for each of the computed elasticities for the business in terms of short-term and long-term pricing strategies. Provide a rationale in which you cite your results. Price Elasticity is -1.19, a 1% increase in price reduces quantity by 1.19%. The demand for this product is elastic and higher revenue may discourage consumers. Cross-price elasticity is 0.68, a 1% increase in the price of the competitor’s product will result in an increase in the quantity demand of the product by .68%. This shows inelastic conditions between the product and the price of the competitors therefore the competitors is not an issue because their price will not affect sales Advertisement-elasticity is 0.11, a 1% increase in advertising expenditures increases the quantity of good sold by 11%. Therefore, demand is rather inelastic to advertising. Advertisement is not always a sure thing to increase revenue. It could have an adverse action and to lose customers Income-elasticity is 1.62, with...
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...Business Proposal Substance Abuse in the United States has a detrimental impact on society. Some estimates reported by NIDA (National Institute on Drug Abuse) state that the total overall cost in 2012 of substance abuse in the U.S, including productivity, health related costs, and crime related costs are upwards of $600 billion each year (NIDA, 2012). Illicit substances alone exceed $193 billion annually (NIDA, 2012). Illicit substance abuse carries with it significant destruction for the economy and society, including; unemployment, divorce, foster care for children in homes of addicted individuals, domestic abuse, child abuse, overcrowding of prison systems, and the list goes on and on (NIDA, 2012). This business proposal presents a new medication called Probuphine created to assist individuals fighting the battle against opioid addiction. The market structure and elasticity of the product is discussed throughout the proposal, with a specialized focus on the rationale for pricing related to the elasticity or non-elasticity of the product. Marginal cost and marginal revenue are analyzed as the proposal progresses and non-pricing strategies are evaluated to choose which strategy is the optimal choice for the success of the business. Last, the fixed and variable costs associated with the production of the medication are determined and discussed. Many people believe that addiction is something that can be controlled by will power or choices, but in fact, research shows that addiction...
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...to either tax cigarettes or airline travel. After thorough consideration, I decided to tax cigarettes because of the relative price inelasticity of cigarettes demanded, the minimized deadweight loss, and positive externalities afterwards. As a result, the state will maximize the utility of taxing cigarettes and collect enough revenue to achieve the budget balance. The main reason to tax cigarettes is that the demand of it is very price inelastic compared to that of airline travel. The price elasticity of demand measures the percentage change in quantity demanded due to the percentage change in price. In other words, price elasticity exhibits the responsiveness of a good or service to a change in its price. There are several factors that determine price elasticity of demand, such as the uniqueness, necessity of goods, the number of substitutes, and the percentage of income regularly spending on these goods. In this case, there are two reasons that determine cigarettes’ price elasticity. On one hand, buying cigarettes is habitual consumption, and addicted people are less sensitive to the price change. On the other hand, there are few close substitutes for cigarettes. So the demand of cigarettes is quite price inelastic. As a result, the demand curve for cigarettes is downward sloping with a steep slope (Rui I, 2011). And a change in price will only lead to a small change of the quantity demanded. However, the demand for airline travel is relatively price elastic. As there are...
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...of your calculations to get full marks. 1. End-of-chapter “Problems” # 2 of Chapter 4 of the textbook – Salvatore (7e). 2. End-of-chapter “Problems” # 3 of Chapter 4 of the textbook – Salvatore (7e). 3. End-of-chapter “Problems” # 4 of Chapter 4 of the textbook – Salvatore (7e). 4. End-of-chapter “Problems” # 6 of Chapter 4 of the textbook – Salvatore (7e). 5. End-of-chapter “Problems” # 9 of Chapter 4 of the textbook – Salvatore (7e). 6. End-of-chapter “Problems” # 10 of Chapter 4 of the textbook – Salvatore (7e). 7. End-of-chapter “Problems” # 12 of Chapter 4 of the textbook – Salvatore (7e). 8. End-of-chapter “Problems” # 13 of Chapter 4 of the textbook – Salvatore (7e). 9. End-of-chapter “Problems” # 15 of Chapter 4 of the textbook – Salvatore (7e). 10. End-of-chapter “Appendix Problems” # 1 of Appendix to Chapter 4 of the textbook – Salvatore (7e). 11. End-of-chapter “Appendix Problems” # 2 of Appendix to Chapter 4 of the textbook – Salvatore (7e). ANSWERS TO PROBLEMS 1. PC (the price of Chevrolets) is expected to be inversely related to QC (the quantity demand of Chevrolets) because of the law of demand. N (the size of the population) is expected to be directly related to QC because a larger population usually means more purchases. I (disposable income) is also expected to be directly related to QC because Chevrolets are normal goods (for most people). PF (the price of Fords) is expected to be directly related to QC because Fords are substitutes for Chevrolets. PG (the...
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...Principles of Economics Sharonda Thorpe, RN, BSN Professor Sarah Uhimchuk Principles of Economics-ECO 100 January 29, 2012 Suggest how an economist would approach the problem of alcohol abuse. Provide two (2) possible solutions to this problem. Include the four (4) elements of the economic way of thinking in your analysis. To suggest how an economist would approach the problem of alcohol abuse, one needs to understand the elements of the economic way of thinking. Four elements are: principle of opportunity cost, which means what you sacrifice to get something. Marginal principle is another element, which includes marginal benefits that result from a small increase in activity and marginal cost, which is the additional cost resulting from a small increase in activity. The principle of voluntary exchange is another element of the economic way of thinking, which is based on the notion that people act in their own self-interest. People won’t exchange one thing for another unless the trade off makes them better off. A forth element would be the principle of diminishing returns which means at a certain point (called the point of diminishing returns), additional input to a system of production will produce less and less output. O”Sullivan (2012). In other words, Scarcity: where economists study situations where needs or wants exceed means. Therefore, people have to make choices. Rationality is assumed to guide people's choices...
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...Principles Of Economics Strayer University ECON 100 March 12th 2012 Suggest how an economist would approach the problem of alcohol abuse. Provide two (2) possible solutions to this problem. Include the four (4) elements of the economic way of thinking in your analysis It is a real case of negative externalities both in consumption and production. production of alcohol causes pollution too. The two possible solutions suggested by economists are: Coase theorem-They can negotiate by themselves for compensation without any government intervention if the property rights are secured and the cost of negotiation is not high. Pigouvian- taxes or regulations. Drunk driving is included. An economist would increase cost through added tax and reduce availability. (answer.yahoo.com, 2012). When measuring the cost of alcohol abuse in any city in the U.S. we must understand what make the assumptions of alcohol abuse comprehensible and to focus on the relevant alcohol abuse. We have to think about such things as health services and medical expenses, premature death, loss of productivity, and alcohol related crimes. In total, the U.S. economy loses an estimated $185 billion each year to alcohol-related problems, according to the National Institute of Alcohol Abuse and Alcoholism. We use the assumptions to help explain, Economics is a discipline, but it is not an exact discipline. Economic theory simplifies situations because it would be nearly impossible to predict and...
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...ECON MIDTERM #1 Chapter 1: 1. What goods and services should be produced? * “guns versus butter” decision: * Which of the following is the best example of "what goods and services should be produced?" Selected Answer: the production of SUV’s versus the production of sub-compact cars * Which of the following is an example of how the question of "what goods and services to produce?" is answered by the command process? Selected Answer: government subsidies for windmill energy production How goods and services should be produced? * Involves the allocation of a country’s resources in the production of a particular good or service. * Which of the following is the best example of "how goods and services should be produced?" Selected Answer: the use of additional workers versus the use of machines in the production of goods. 2. Factors of production * factors of production, resources, or inputs are what is utilized in the production process in order to produce output—that is, finished goods. * Factors of production may also refer specifically to the primary factors, which are land, labor (the ability to work), and capital goods applied to production * Resources: Land, Labor, Capital, Entrepreneurship and management skills 3. Scarcity and opportunity cost * Scarcity is the condition in which resources are not available to satisfy all needs and wants of a specified group or people. * Opportunity cost is the amount...
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...AFTER READING THIS CHAPTER, YOU SHOULD BE ABLE TO: 1 Discuss price elasticity of demand and how it can be applied. 2 Explain the usefulness of the total revenue test for price elasticity of demand. 3 Describe price elasticity of supply and how it can be applied. 4 Apply cross elasticity of demand and income elasticity of demand. 4 Elasticity In this chapter we extend Chapter 3’s discussion of demand and supply by explaining elasticity, an extremely important concept that helps us answer such questions as: Why do buyers of some products (for example, ocean cruises) respond to price increases by substantially reducing their purchases while buyers of other products (say, gasoline) respond by only slightly cutting back their purchases? Why do higher market prices for some products (for example, chicken) cause producers to greatly increase their output while price rises for other products (say, gold) cause only limited increases in output? Why does the demand for some products (for example, books) rise a great deal when household income increases while the demand for other products (say, milk) rises just a little? Elasticity extends our understanding of markets by letting us know the degree to which changes in prices and incomes affect supply and demand. Sometimes the responses are substantial, other times minimal or even nonexistent. But by knowing what to expect, businesses and the government can do a better job in deciding what to produce, how much to charge, and, surprisingly...
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...companies by Fortune (Samsung Profile, 2013). The size of Samsung is large as it have many types of business in it. In year 2012, Samsung has earned a net sales of RM 268.80 billion, net income was RM 26.20 billion and the number of employees reach 425 thousands in year 2012 (Samsung, 2013). Samsung also has its own Values and Philosophy. The core values of Samsung are People, Excellence, Exchange, Integrity and Co-prosperity as they believe that living by strong values is the key to a good business (Samsung, 2013). Besides that, Samsung also devote its talent and technology to creating superior products and services that contribute to a better global society by following a simple business philosophy (Samsung, 2013). Samsung has its economic problems...
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...Scenario Concept Edric Vázquez Muñoz ECO/561PR October 7th, 2013 Prof. Carlos Mendez Scenario Concept Carlos Cruz Elasticity Scenario Analysis This paper analyzes the development of a product, supply and demand which has the same evaluating all angles from the viewpoint of an economist with the decision to start a business. Carlos Cruz is an inventor who is trying to create a new product that uses technology to make printed words such as books, materials and convert text into a digital product that people can hear (University Of Phoenix, 2013). This has options or alternatives to their rates in line with the cost of doing business. Carlos must make the important decision whether to incur the costs generated by labor and other labor costs can have the effect of increasing the cost and value of your product or not. The total price of the final product will increase revenues and decrease Carlos by product. Carlos is facing some critical decisions about his invention. He believes he has a viable business, but is not sure how to achieve the maximum total revenue. Carlos has found that some economic principles are present and should not be ignored when launching its product to consumers. Following are some of them. One principle that is present is the concept of supply and demand. The demand is defined as the quantity of a product that consumers are willing and able to buy based on price over a period of time (McConnell and Brue 2008). The demand shows a relationship if all...
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