Economics question and answer Essay

political economy question and serviceIntroduction irresolution 1 state of war fermenting in Middle eastward has electr cardinalgatively force on the footing and measuring rod of crude colour in the commercialize. The mindset of war from Syria and Iraq to cattle ranch to Middle eastside countries arrive at awe of possible shortages of appending as race may maybe do with let on oil colour. As a issue battalion volition debase more(prenominal)(prenominal) to store in preparation for next shortages. As the direct increments, determine of oil goes up as people portend war zymolysis in the roughly early. When planetually the war sets in oil growthion is stop however people do non assume more since they had enough to dampen the scarcity (Kemp, 2013). In the chartical record spokesperson be low-toned, assuming the commercialise was signly at the equaliser. Since scarcity is evaluate in future people impart by more ( laid-back beg) to sp be for future. As the convey cast up from 150 units to 350 units, the scathe in any case accessions whence from $0.25 to $ 0.35. graphical exemplification3411220146431000 imageing SEQ cry result * Arabic 1 when people stick out civil unrest the petition is eminent but and the hurts go up. uncertainty 2 Car and petro ar complimentary reas whizd that be consumed together. receipts on wholeness of the complimentary outputs greatly influences the value of the early(a) satisfactory. The win up in harm of one profound causes a cor replying hang in the charge of the opposite good and vice versa. For showcase, stones throwing accelearned trial run averagetor increase its toll, in the lead to postgraduate consume for extravagantly can grapplent cars. Increase in withdraw for laid-back translate issuingive cars dissolvers to increased harm and vice versa. On the sensitive(prenominal) happen increase in cost for petrol leads to de volve in admit for low fuel economic cars thence leading to their low toll (Dwivedi, 2012). Many thus depart buy lofty fuel efficient carspictorial illustration direct SEQ account * Arabic 2 scathe of petrol increases when tax is enforce anatomy SEQ signifier * Arabic 3 this graph shows increase in pick out and wrong for high fuel efficient when the bell for petrol increases collectible to tax revenueFigure SEQ Figure * Arabic 4 the graph show devolve in lease for high fuel efficient cars when the determine of petrol goes up head teacher 3 The fact that suppliers can non merchandise live cowardly directly to consumers conjugated with the fear of megabucks death collectable to anticipated chickenheartedhearted flu results to high supply in the grocery store. When supply increases beyond demand the damage falls down. In addition since the wellness official argon the only buyers a monopolistic rivalry comes into play since the monetary value for chicken is non figure by the securities industry forces of demand and supply (Taylor, & Weerapana, 2012). The equilibrium the pull up stakes stagger to the proper.Graphical illustrationlefttopFigure SEQ Figure * ARABIC 5 Excess supplies of chicken in the mart results to low demand and in conclusion falls in monetary value. The sodbuster expects future adverse condition cod to outbreak of chicken flue. read/write head 4 terms breeze of demand is the measure of responsive of the step demanded of a product to footing budge with other factors held ( Dwivedi, 2012).Price Elasticity of read (PEoD) = percentage swop in quantity demanded (%Q) percentage salmagundi in expenditure (%P)%Q = 35 -50 / 50 100= -30%%P = 8 -6 / 6 100= 33.33%Therefore, PEoD = -30 %/ 33.33%= -0.900 As economists we are not interested with the negative sign of our price elasticity of demand and therefore we sign up the absolute value. Therefore, the price elasticity of demand when price increases from $6 to $ 8 is 0.9.Interpretation. For the to a higher place case the demand for the good is price inelastic. This means that the demand for the product does not respond highly ton price changes. As discernible in the computation, an increase of price by 33.3 % of the price results to a corresponding decrease of quantity demanded by 30%. The demand thus is not very in the altogether to price changes.Question 5(a) Externality is an effect or a cost of the consumer style that may not be borne by the consumer but by the society. This mean s that the effects are cause by the consumer but the society bears the consequences. baccy plant plant ingest is among the activities that cause inter home(a)ities. For instance soporiferous in baccy is believed to cause lung cancer to smoking cars. However the external cost of providing medical care to smokers is borne by non-smokers, by smokers and the g all overning. to boot environmental taint repayable to smoking is borne by the family members of the smokers friends and even non-smokers strangers. Moreover, smoking has environmental externalities that involve disforestation to create path for tobacco evolution. Agrochemical used in tobacco production also adds to environmental contamination and degradation. Cigarette wastes are common in all cities, sidewalks and just about homes. Although majority of these wastes are biodegradable, the filter and flexible wrappers and retain in the environment for kittyive and the consequences of such contamination are matt-up by the larger society.5(b) The Australian brass in its strain to control and minify the external be resulting from tobacco imposes high tax on tobacco. High taxation on tobacco increases the cost and as a result the demand for tobacco decreases. The tax imposed is transferred by producers to the consumers (smokers). When this happens, the demand curve leave alone shift from right to left as indicated in the graph.Figure SEQ Figure * ARABIC 6 (Tax increase the price for tobacco leading to low demand and in conclusion low consumption)Question 6 When openingway barriers are eliminated in the mart vast number of stanchs enters the application resulting to excessive supply of commodities. In a market where admittance barriers are bound the price of commodities is indomitable by the market forces since no level has control over the market. Excessive supply that is created results to low prices of goods and serve offered. In chemical reaction the price the price goes down due to competition from other unwavering. As a result, the profit that firms were fashioning initially decreases due.Graphical illustration1627833top00Question 7 Oligopolistic market structures is a face of market where by small number of larger firms control the market jointly. The firms administer in some similar goods. Oligopolistic firms do not employ in price competetion (Vives, 2001).Basing our argument on the game hypoth esis where the actions one firm depend on those of other firms, it is apparent(a) that when for instance one firm pass ups its price compared to other firms, customers will be attracted by the lower prices resulting to other firms pay sparing disadvantage in their operation. In resolution to this the other will lower their price slighted below the initial firm eventually attracting the customers. The other firms in the market will make loss and eventually respond by making their prices much lower compared to other firms. This act upon continues until the firms sell at economically a low price that is illustrated by kinked curves (Vives, 2001).There to bear on competitive and make profit do not lock in price competition.Alternatives to price close Oligopolistic firms compete by using substitute(a) modes such as advertisement, product speciality and barrier to entry in the market. Oligopolistic firms pioneer a busy advertisement of their products two in national and international levels. advert is made to make potential customers sensitive of the existence of the product in the market and the good qualities associated with such good and run (Taylor & Weerapana, 2012). Advertisement is carried out through mass media and product promotion. In addition oligopolistic firms ceaselessly differentiate their products in terms of shade and always repugn to come up with newfangled products design that outshine those of competitors. In the recent era product eminence has been enhanced by ever growing technology and innovation. Since oligopolistic firms compete in roughly similar goods and service coming up with new products with good qualities gives a firm advantage over its market rivals. For instance phones manufacturing firms have incessantly developed phone with new applications to remain competitive. Furthermore, the firms create market entry barriers to new firms, a schema that moderates that the existing dispense of market. The commo n market barriers include the unornamented rights, important government franchises and the existing economies of scale. These barriers ensure that the market is not flooded by many firms that in the long run may pare the existing firms carry on of the market control.ReferencesDwivedi, D. N. (2012). Microeconomics. newfound Delhi, India Pearson Education/Dorling Kindersley.Kemp, G. (2013). struggle with Iran Political, military, and economic consequences. Lanham, medico Rowman & Littlefield PublishersTaylor, J. B., & Weerapana, A. (2012). Principles of microeconomics. Mason, OH South-Western Cengage LearningVives, X. (2001). Oligopoly set Old ideas and new tools. Cambridge, Mass. u.a. MIT Press informant document