5 E’s to Reduce Scarcity The first E of economics is economic growth. Economic growth is the increase in the ability to produce more goods and services. This is caused by new resources, better resources, and better technology. For example if a large amount of oil had been found underneath Harper College that would increase our economic growth because there is an increase in new resources. Having this new resource helps to minimize scarcity. The second E is productive efficiency. Productive efficiency is using as few resources as possible when producing a product. When a business lays off workers but still is able to produce the same amount of goods that business is improving their productive The lay-offs are good for society because the laid off workers can produce more products in another company therefore reducing scarcity. For example if Coca Cola can lay off 600 workers but still produce just as many products then those workers can go work to produce more boats. The third E is allocative efficiency. Allocative efficiency means that a company uses its limited resources to produce what society wants. The resources are not wasted by making products society doesn’t want. In other words people are happier with products they want rather than products they don’t want. For example a company will use its resources to make DVDs rather than VHS tapes because a very small amount of society actually wants VHS tapes. Some companies that produce goods that society doesn’t want ends up laying off a lot of workers. The fourth E is full employment. Full
Price elasticity of demand is defined as a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. (www.investopedia.com). In a most simple way elastic demand means that clients acquire more products or services when prices are lower or less if the prices are higher, or vice versa depending on other factors. There are two types of demand elasticity. 1) Elastic demand or high price elasticity, this happens when the quantity…
Associate Level Material
Price Elasticity and Supply & Demand
Fill in the matrix below and describe how changes in price or quantity of the goods and services affect either supply or demand and the equilibrium price. Use the graphs from your book and the Tomlinson video tutorials as a tool to help you answer questions about the changes in price and quantity
|Event |Market affected by event |Shift in supply, demand, or both.…
PRICE ELASTICITY OF SUPPLY
Price elasticity of supply (PES) measures the relationship between change in quantity supplied and a change in price.
If supply is elastic, producers can increase output without a rise in cost or a time delay
If supply is inelastic, firms find it hard to change production in a given time period.
Percentage change in quantity supplied divided by the percentage change in price
When PES > 1, then supply is price elastic
When PES < 1, then supply is price inelastic…
2. 'unit elasticity'
Demand or supply with a price elasticity coefficient that is equal to one.
3. 'cross elasticity of demand'
The ratio of the percentage change in quantity demanded of one good to the percentage change in price of some other good.
4. 'producer surplus'
The difference between the actual price producers receive for a product and the minimum acceptable price
5. 'midpoint formula'
A method for calculating price elasticity of demand or price elasticity of supply that…
of economic behavior in industries and consumers. Some of the concepts that microeconomics focuses on are market prices and how the supply and demand curve initiates change. Microeconomics also examines mergers and price elasticity which are vital notions important to microeconomic excellence. As decisions are made through microeconomics, both firms and individuals analyze the prices of products and services motivated by demand costs and benefit considerations in a portion of the economy instead…
Coffee Supply, Demand, and Price Elasticity
Team B: Walelia Naholowa’a, Priscilla Swanson, Delniece Williams, Nigel Sturge
February 26, 2012
Coffee Supply, Demand, and Price of Elasticity
Statistics show that over half of the American population consumes coffee on a daily basis. You may drink coffee hot, cold, mixed, or even in a frappuccino. Individuals are able to make coffee at home, or buy it on the go. Coffee provides people with caffeine, which ultimately…
A) POINT ONE
The price elasticity of demand using the midpoint method can be calculated with the following equation:
= (Q2-Q1)/ ((Q2+Q1)/2)
Using the values given, the equation is as follows:
= (580270-620820)/ ((580270+620820)/2)
This shows that the price elasticity of demand for Metlink train tickets is:
Demand elasticity is the responsiveness of the outside economic factors for the demand of the goods and services. Mainly there are three demand elasticities;
1) Price elasticity of demand
Responsiveness of price variation a considered good or service for the variation of demand
2) Cross Price elasticity of demand
Responsiveness of price variation another good or service for the variation of demand
3) Income elasticity of demand
Responsiveness of Consumer’s income for the variation of demand…
* Chapter 3: Problems 3, 4, and 7
Chapter 3 -Problem 3 Answer: The Olde Yogurt Factory has reduced the price of its popular Mmmm Sundae from $2.25 to $1.75. As a result, the firm’s daily sales of these sundaes have increased from 1,500/day to 1,800/day. Compute the arc price elasticity of demand over this price and consumption quantity range.
Arc Price Elasticity = (Q₂ - Q₁ / P₂ - P₁) * (P₂ + P₁ / Q₂ + Q₁)
Q₁ = 1500
Q₂ = 1800
P₁ = 2.25
P₂ = 1.75
Answer: [(1800 - 1500)/(1…
Price Elasticity of Demand Report
Introduction to Microeconomics/ECO102
March 25, 2013
Price Elasticity of Demand
This paper will discuss about price elasticity of demand and factors that affect price elasticity of demand. Elasticity can be described as a measure of the sensitivity of demand for goods or merchandise to changes in price. Price elasticity determines how much of an impact a change in goods or services price will have on the…