Article Analysis for Economics

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University of Phoenix
Principles of Microeconomics
ECO/365
Professor James Harris III
Aug 7, 2008

Article Analysis
The article that will be used for this analysis is “Supply, demand, and the Internet-economic lessons for microeconomic principles courses” by Fred Englander and Ronald L. Moy. There will be definitions for the following economics, microeconomics, Law of supply and the Law of demand. Another subject that will be discussed is the identification of factors that lead to the changes in supply and demand. In order to better understand what is being discussed going to start with the definitions. Define Economics

“Economics is the branch of social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Greek for oikos (house) and nomos (custom or law), hence "rules of the house (hold)" (CommerceGoal.com, 2006-2008). Define Microeconomics

“The branch of economics that analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers. In particular, microeconomics focuses on patterns of supply and demand and the determination of price and output in individual markets (e.g. coffee industry)” (Investopedia A Forbes Digital Company, n.d.). Define Law of Supply

“A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services offered by suppliers increases, and vice versa” (The Free Dictionary by Farlex, n.d.). Define Law of Demand

“Observation that, as a general rule, the demand for a product varies inversely with its price—lower prices stimulate demand and higher prices dampen it. Law of demand holds in most instances, except in case of Giffen good” (BusinessDictionary.com, n.d.). Identify the factors that lead to a change in supply and a change in demand

There are many factors that can lead to the change in supply or demand; here is an example of some factors based off the rising gas prices; “One of the Report’s conclusions is that over the past 20 years, changes in the price of crude oil have led to 85 percent of the changes in the retail price of gasoline in the U.S., while other important factors have included increasing demand, supply restrictions, and federal, state, and local regulations such as “clean fuel” requirements and taxes” (Federal Trade Commission, 2005). It is amazing that the price of gas has been such a huge issue for so long. Main factors that lead to change in supply and demand are scarcity, increase or decrease in demand, certain laws, costs in labor and raw materials, and the invisible hand. Analysis: Consider the utility derived from the products mentioned in the article

The main product in the article is the internet. The list of utilities that the internet is good for is a mile long. The internet can be used for students to be able to do research in the comfort of their own home instead of spending hours at a library. Here is a great explanation on how the internet can assist in the classroom: “The Internet provides not only an interesting educational tool for retrieving information and interacting with others but also interesting examples that can enhance students' intuition about key concepts typically taught in microeconomic principles courses. Instructors can use relevant issues to promote classroom discussion or create assignments” (Englander & Moy, 2003). The internet has made a world of difference in the life of a college student. It is also used for shopping, consumers can log into their favorite store, order what they need and have it delivered to the front door as soon as the next day. The consumer can do price comparison of products; do research on the product...
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