.Microeconomics Assignement 1 1. a. Define opportunity cost, and explain its importance in economics. (3 marks) Opportunity cost refers to what you must give up (trade off) to obtain some item. It represents the forgone opportunities. It is very important to all of us; it helps and guides our decisions in life. For every decision made, no matter the circumstances; work, school, business, life in general, we incurred a cost, the opportunity cost, what we must give up to obtain the chosen good.
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to a change in another variable. In economics, elasticity refers the degree to which individuals (consumers/producers) change their demand/amount supplied in response to price or income changes. Calculated as: | | Investopedia explains 'Elasticity’Elasticity is used to assess the change in consumer demand as a result of a change in the good's price. When the value is greater than 1, this suggests that the demand for the good/service is affected by the price,
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1 Lesson 2 Lesson 3 Lesson 4 Lesson 5 Lesson 6 Lesson 7 Managerial Economics: Definition, Nature, Scope Fundamental Concepts of Managerial Economics Demand Analysis Elasticity of Demand UNIT-II Supply Analysis Production Function Theory of Cost
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Microeconomics and the Laws of Supply and Demand Eco 365 Instructed by: The purpose of this paper is to review and discuss how the principles of both macroeconomics and microeconomics are pertinent to many aspects of our daily lives in ways that a mass majority of individuals has never stopped to think about. The discussion herein is based on a simulation involving rental apartments in Atlantis that are all owned by the same company known as Goodlife. It is important
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Determinants of Price Elasticity of Demand Register for FREE to remove ads and unlock more features! Learn more A good's price elasticity of demand is largely determined by the availability of substitute goods. Learning Objectives • Explain how a good's price elasticity of demand may be different in the short term than in the long term. • Relate the existence of close substitutes to a good's price elasticity of demand. ________________________________________ Key Points o A good with more
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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
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17, 2014 Elasticity of demand can be described as the percentage of change that occurs when the demand for a product or service changes because of a change in the price. An organization can reduce the price of a product or service, which in turn, will increase the demand for this product or service. This will increase the revenue for the organization. There are three ways to measure the elasticity demand in a product. The first is inelastic demand, the second is unit elastic demand, and the
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technology in bid for global market share” – page 374 of the textbook – was studied and will be cited several times during this paper. Industry Overview The solar energy industry is growing in America, as can be seen by the increase in global demand for solar cells. The US Department of Energy is investing hard on the industry, offering over $12 billion dollars in loans to solar projects. A particular company called 1366 Technologies received a $150 million loan guarantee due to it’s new technology
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lot more money out there so prices rise. ii. The short-term trade-off between inflation and unemployment is the government spends more money (stimulus) which increases the demand for goods and services. The higher demand makes businesses raise their prices, but it also makes them hire more workers to help with the demand. The more people that are hired, the lower unemployment percentages. 3. Absolute advantage is when one company produces a good using less inputs than another company. Comparative
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Microeconomics activities on our necessity goods, preparing this report. The project was assigned on January 28, 2008 and submitted on April 07, 2008. 2. Objectives & Scope • Analysis the factor affect of Demand & Supply • Analysis of Market Equilibrium • Determination of Price Elasticity • Analysis of Total Utility • Analysis of Short Run and Long Run • Analysis of Efficiency of Competitive Equilibrium • Analysis of Gain from Trade • Analysis of Difference form
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