[Economics HL] Internal Assessment (IBYR1)

Topics: Supply and demand, Economics, Personal computer Pages: 4 (858 words) Published: March 6, 2014
IB economics internal assessment cover sheet
School code
Name of school
EF International Academy – Tarrytown NY

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Title of the article
PC sales continue to fall as smartphones, tablets cut demand Source of the article
http://www.ctvnews.ca/sci-tech/pc-sales-continue-to-fall-as-smartphones-tablets-cut-demand-1.1490972 Date the article was published
9 October 2013
Date the commentary was written
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Word count (750 words maximum)
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Section of the syllabus the article relates to (choose the one that is most relevant): Choose one:
☐Section 1: Microeconomics
☒Section 2: Macroeconomics
☐Section 3: International economics
☐Section 4: Development economics

- IDC says that the PC market fell nearly 8 percent to 81.6 millions units - Gartner says that it fell nearly 9 percent to 80.3 millions

There is a decrease in demand, because consumers prefer other products (substitutes).

Law of demand: as the price of a product falls, the quantity demanded of the product will usually increase, ceteris paribus.

Substitution effect: if a price falls, it becomes more attractive for people to switch from other products.

Substitutes: as the price of one increases, the demand for the other decreases. “…Cheaper tablet computers and smartphones cut into demand” The price of the substitutes (tablets and smartphones) is lower than the PCs’ one.

Graph: there is a shift to the left of the demand curve.

Consumer surplus:
An economic measure of consumer satisfaction, which is calculated by analyzing the difference between what consumers are willing to pay for a good or service relative to its market price. A consumer surplus occurs when the consumer is willing to pay more for a given product than the current market price.

Producer surplus:
An economic measure of the difference between the amount...
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