Eco Extra Credit

Majd Ahmad 11Th Grade Economics

Extra Credit Chapter 4 Assessment 1. Demand curve 2. Normal good 3. Income effect 4. Elasticity of demand 5. Unitary Elastic 6. Law of demand 7. Complements 8. Using Graphic Organization

9. In my opinion I think the substitution effects is when there are two products that are almost alike and can be bought instead of one another for the same reason. For example: butter and margarine, ford trucks or Toyota trucks, these items can be bought instead of each other. If the butter is more expensive than margarine, my demand for margarine goes up, because it is cheaper. The same goes to the trucks, there both trucks now its just the matter of the price.

10.When there is a change in an influencing factor other than price, there may be a shift in the demand curve to the left or to the right, as the quantity demanded increases or decreases at a given price. A number of factors may influence the demand for a product, and changes in one or more of those factors may cause a shift in the demand curve. Some of these demandshifting factors are: A) Income - an increase in income shifts the demand curve of normal goods to the right. B) Expectations of a price change - a news report predicting higher prices in the future can increase the current demand as customers increase the quantity they purchase in anticipation of the price change. C) Number of potential buyers - an increase in population or market size shifts the demand curve to the right. Also like advertisement. It can influence potential buyers to buy the product in question. 11.The main use of calculating the elasticity is to make a price range and pricing decisions that people will buy the product at. 12.Some factors are: a) Time- The longer the time period, the more easily firms can adjust the price. b) Production time- If a good is manufactured quickly, supply can be increased easily. c) Stocks- If a firm has large amounts of stocks, supply can be increased easily. d) Capacity- If labor and capital are underused, supply can be increased easily. e) Factor mobility- If resources can easily move in and out of the industry, then supply can be increased easily. 13.Inferior goods have negative elasticity’s of demand. As income rises, the quantity demanded actually falls. 14.Drawing Conclusions- False, an increase in income shifts the demand curve to the right not the left. Because as income increases your demand for a normal good increased because no you have more money to buy more products. 15.Testing conclusionsProduct

Elastic/Inelastic

Prediction

Chart

Sedan Car

Elastic

Watches

Inelastic

Pens

Elastic

16. One thing you can do to keep your demand high, is to advertise your product. Also increase quality and production rate. Because if you have your product in stock the price will be redused again. 17. 78 18.Time, such as traffic (get to work late) and time to take wait for a haircut, also time to finish cutting the lawn. Time can affect it if a news report says we are all wasting our time. 19.Haircuts 20.Lawn mowing is low and taxi rides is high in an urban area because people travel more than cutting the grass. Also most people in the urban area don’t have grass. They usually travel from place to place by taxi to reduce traffic in a populated place. Lawn mowing is high and taxi rides is low in the suburban are because people have vehicles to drive and get around, so they don’t need much taxis. But lawn mowing is high because they all mostly have lawns around their house that needs to be cut. 21.Lawn mowing