GE 301 Engineering economy AN INTRODUCTION ECONOMICS Definition – It is one of the social sciences‚ which consists of that body of knowledge dealing with people and their assets or resources. ECONOMICS Resource (Definition) – ● It is a material or asset that is transformed to produce benefit‚ and in the process may be consumed or made unavailable. Asset (Definition) – ● ● It is anything tangible or intangible that is capable of being owned or controlled
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burden (incidence) of an indirect tax on the producers & on the consumer varies depending on the price elasticity of demand for the good/product. Indirect Tax is a tax placed upon the selling price of a product‚ so it raises the firm’s cost and shifts the supply curve left or vertically upwards depending on the amount of tax. Because of this shift‚ less products will be supplied at every price. The diagram below shows the effect of imposing a tax and how the tax is being paid. There’re two
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Everyone’s Gasoline Problem: As we all know that the price of gasoline is definitely driven by the concept of supply and demand. Never the less prices fall‚ quantity demand will rise‚ when price rises‚ quantity demanded will fall. Usually this is a true statement in most cases. But gasoline is a necessity to most Americans. The demand for fuel does not decrease when the price increase. Consumers often influence the price of gasoline. Gas prices in the late spring and summer months are the highest
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(NSU) will affect the total revenue of NSU we will need to look at the price elasticity of demand to see whether an increase in the tuition fee would cause a total revenue increase or decrease. This is dependent on whether the demand is elasticity demand or inelastic demand. To better understand how this works allow me to explain the term elasticity. According to Amacher & Pate‚ Microeconomics Principles and Policies‚ “Elasticity measures the way one variable responds to changes in other variables”
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Price Elasticity: Price Elasticity is used to explain the degree of responsiveness of the demand for a product to a change in its price. Ep=Percentage change in quality demanded/Percentage change in price (Ep=Price Elasticity) Practical applications of Price Elasticity: 1) Helps in fixing the prices of different goods: It helps a producer to fix the price of his product. A higher price is charged if the demand for the product is inelastic and a lower price is charged if the demand for the product
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following questions relating to elasticity: (a) Do the mentally ill have perfectly inelastic demands for cigarettes and alcohol? Elasticity helps us define the relationship of changes in price and incomes to the effect of supply and demand. The question posed is: do the mentally ill have perfectly inelastic demands for cigarettes and alcohol? First‚ we must define what perfectly inelastic demand is. As defined by our textbook‚ a perfectly inelastic demand is one in which price change results in no change
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end) 1. Each month Jacquelyn spends exactly $50 on ice cream regardless of the price. Jacquelyn’s price elasticity of demand for ice cream is: A) zero. B) one. C) greater than one. D) less than one‚ but greater than zero. 2. Egg producers know that the elasticity of demand for eggs is 0.1. The hens went crazy and laid 5% more eggs than usual. To sell all those additional eggs‚ they will have to lower price by: A) B) C) D) 0.1% 1% 5% 50% 3. Nations can gain from trade with other
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companies control the entire market. These firms are in a highly concentrated industry. Oligopolies can result from various forms of collusion which reduce competition and lead to higher costs for consumers. Once a company in an oligopoly changes price or strategy both profit and other companies are impacted. In other words‚ the companies in this industry will change at the same time‚ especially facing a challenge. In their current market position‚ Kodak retains the highest market share. Kodak receives
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Assignment 1: Economic Basics (24.0 points) 1. Describe two examples of important things that financial planning skills can help you do‚ and explain why these things are important to you personally. (4-6 sentences. 2.0 points) One example of financial planning that could help me would be saving for a new car. Another example would be saving for college. Saving for a new car is important because I will need a car for work and college. Saving for college is important because I want to
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is that the internet will help buyers look online for refrigerators instead of going store to store. Friction-free or low-friction economies tie in with supply and demand because the lower the friction is in an economy‚ the higher the competition. According to the articles‚ the internet (will) play a huge role in supply and demand. The supply will increase as friction decreases‚ not necessarily because of demand‚ but it is easier for competitors to enter the market. Case states‚ “Offer a distinctive
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