...Introduction to Economics BS1547 Introduction to Economics Macroeconomics Assignment- 1 Neo-Classical and Keynesian “The study of how society, and those in society allocate scarce and hence valuable resources between competing uses can be defined as Economics”(Jones, 2013) which was founded by Adam Smith in 1776. “The field of Economics that deals with the aggregate economy and changes in its level of unemployment, national income, growth rate, GDP, inflation and price level is called Macroeconomics.”(www.investopedia.com) As economics developed two distinct approaches were seen to immerge the Neo Classical which stated that Macroeconomics = ∑Microeconomics and the Keynesian which stated the opposite. Both these approaches are still followed in the managing of the present world Economies. Figure 1. As seen above, Neo classical approach lasted several years before the Great Depression, but was revived once again after the period of stagflation when the Keynesian approach failed to improve the economic condition. The Neo Classists approach influenced by Adam Smith and others with reference to the ‘invisible hand theory’ (Jones, 2013) stated that the “market is best left alone and that it will adjust and clear itself and hence finding its own macro-equilibrium.” (Jones, 2013) Keynes suggested that this is not realistic approach and that “government intervention is needed for the market to reach its macro-equilibrium.” (Jones, 2013) The Neo Classical approach towards Economic production...
Words: 525 - Pages: 3
...Economic Supply and Demand Analysis Tammy Costello MBA 502 April 20, 2014 Hector Morales Economic Supply and Demand Analysis Novo Nordisk has offered a significant amount of data involving their manufacturing of insulin to the general public. They have estimated that as populations change and diabetes is moving more into the cities we will find that two out of three people that have diabetes will reside in the city. “By 2030, it is estimated that more than half a billion people will suffer from diabetes with nearly two-thirds of everyone with diabetes living in cities, and those who move to cities are significantly more likely to develop diabetes than those who remain in rural settings” (Novo Nordisk, 2013). Census now show that more people now reside in the city than in the rural areas of the country. Now the population is at 52% and is thought to rise to 70% by the year 2050. Because of the economic strength and higher consumption, to inactive lifestyles and the inability to obtain good health care has given rise to the higher numbers of diabetes in our country. One of the main concerns of diabetic patients remains how they will pay for the necessary medications and supplies needed. In my research I have found that without insurance it can be relatively expensive especially for those on fixed incomes. The estimated prices for a vial of novo log insulin ranges from $143.00 to 200.00, 3 flex pens of novo log $207.00 to $250.00, and 3 cartridges $203.00 to...
Words: 1048 - Pages: 5
...Key Assignment (2) – Economic Growth and Supply Side Policy 1. Evaluate the use of supply side policies to achieve economic growth Supply side policies are polices designed to improves an economy’s productive potential and its ability to produce, which contributes to a faster rate of growth of real national output. Governments believe achieving sustained growth without causing a rise in inflation is dependant on improving supply-side performances. The perks of supply side policies are that it helps economies to develop labour productivity, reduce unemployment, and improve trading to help achieve economic growth. A key aim for supply-side policies is to decrease the level of unemployment in an economy. The policy is designed to improve the quality and quantity of the supply of labour available to the economy. A growth in labour supply increases the productive potential of an economy. Increased quality will improve the productivity of labour. A reduction in unemployment can be achieved through cuts in Income tax, providing an incentive to work. As income tax is paid directly from an individuals earned income, a lower income tax will act as an incentive for unemployed workers to join the labour market, or for existing workers to work harder. This is as result of them being able to keep a high proportion of the money they earn. An increase in national output can be accomplished as lower corporation tax provides an incentive for entrepreneurs to start a business or organization...
Words: 399 - Pages: 2
...IP – Intro to Economic Thinking Frank K. Chadmon Colorado Technical University Online Professor Olanrewaju November 25, 2013 The mixing of supply and consumer demand is very important to consumers because the combination of these two typically sets the price of a good or service. The final market price is dependent upon both of these components of a market. When buyers and sellers agree on a price, that’s called the equilibrium price. For consumers and sellers, the law of supply and demand is a rule of thumb that holds true in the market. With other things being equal, price and the quantity demanded are inversely related; this means the greater the demand for a product or service, the higher the price and lower the demand for a product or service, the lower the price. Other things being equal, refers to factors that can affect demand, such as the availability of substitute goods or changes in consumer tastes. This analysis will provide a discussion of how supply and demand affects consumers, especially with respect to price, availability of goods or services. In the law of supply and demand, the quantity demanded is distinct from demand, which refers to the entire relationship between price and quantity demanded. There are a number of factors that affect both supply and demand and, as a result, consumers. When demand or supply for a good or service changes, the equilibrium price for the good or service changes also, so changes in demand or supply always have an...
Words: 906 - Pages: 4
...inelastic demand Elastic and inelastic demand Task A 1. Elasticity of Demand measures sensitivity of the demand for a good to a price change. If the price of a good matters little, a change in the price of that good will have a small impact on one’s willingness to sell or buy and this would indicate an inelastic situation. However, if a small change in prices causes substantial changes in one’s willingness to buy or sell, the good is said to be elastic. McConnell, Brue, and Flynn (2012) note that when demand is elastic a decrease in price will increase total revenue because even though the price is less the additional goods sold make up the difference. Conversely, if the demand is inelastic, price decreases reduce total revenue. When the percent of increase or decrease in the price of a good is equal to the demand percentage the case is unit elastic. 2. Cross-price elasticity of demand measures the sensitivity of quantity demanded of a good when the price changes on another good. When two goods are substitutes, the price of one good increases the demand for another good. Airlines A and B have routes that are the same. As airline, A raises the price of their tickets consumers will likely change to airline B. This is a simple explanation of substitution. A good is considered a complement to another when the demand of product A is increased after the price of product B is decreased. 3. Income elasticity measures the relationship between a change in demand for a...
Words: 2995 - Pages: 12
...This assignment provides an economic analysis of South African Maize. The objective of the assignment is to find a non –governmental price regulated commodity and examine the determinants of demand and supply, as well as prices, and elasticities of the commodity Table of Contents Introduction: 2 The determinants causing shifts in demand and supply: 3 Price movements: 4 Price and/or income elasticities: 4 Conclusion: 5 References: 5 Introduction: In Africa, South Africa’s economy is one of the largest (one-quarter) contributor’s to the nation’s economic Gross Domestic Product. Even though the manufacturing sector is now a sizeable donor to the South African economy, commodities do still provide an ample section to the economy (Simpson, 2012). A commodity is known as a raw material this is exchanged (bought and sold) by trade partners. It can also be a primary agricultural product (Parkin et al., 2008: ). South Africa’s agricultural sector does not have a large impact on a global scale upon the world’s agricultural trade. Although does export cereal grains in large quantities as well as stocks the country with cereal grains’ seeing as it is one of South Africa’s staple foods (Simpson, 2012). In economics, questions result from people wanting more than they can get. What is available for individual’s consumption is limited by time; incomes received; and by the prices of the goods and services people must pay. The goods and services available are constrained...
Words: 1683 - Pages: 7
...Without determined economic policies and strong political will, the United States may have never recovered from the many economic crises it has faced. Economic policies encompass a wide range of government measures to change the economy, and are extremely important for reversing downturns in the economy. The goals of economic policy are economic growth, stable prices, and full employment of the workforce. In general, an economic policy is successful if it reduces unemployment, reduces inflation, and encourages economic growth although these are not the only metrics. There is debate among economists over whether supply-side or demand-side are best for economic growth, coupling these with monetary policy are key for maintaining a healthy economy....
Words: 767 - Pages: 4
...of homes I am looking to discuss these factors in depth. The demand of houses depends on what the interest rates are, as this will decide whether the buyer will be able to get a mortgage at a cheaper rate. The lower the interest rate the more demand of houses and the more demand in houses the higher the price. The supply will depend on what the price of the house is. The higher price seller will get more people would want to sell it. This is short term as when more houses appear on the market it will lead to a reduction in price if there isn’t enough demand. A possibility to why the demand is high could be the issue of immigration. Immigrants are placing huge amounts of pressure on the housing market driving up rents and property prices. The massive influx is also forcing the government to dramatically revise its house building targets, putting greenbelt land at risk. On average 100,000 new houses will be needed every year over the next decade to cope with immigration. Foreigners are also placing demand on council and other social housing taking a minimum of 10,000 properties last year. The UK has seen several changes in the property market over the last decade. Changes in Government policies and cuts have influenced many changes in the property market. The government has tried to keep up with the demand but as the population grows there are more people in the economy and therefore there is greater demand for housing, but you have to take into account the family size, death...
Words: 985 - Pages: 4
...Health Care Economics 1 Term Comparison Paper Bernadette Cynthia Gibson July 28, 2014 HCS/552 Nancy Jennings Health Care Economics 2 Term Comparison Paper Demand, Economics and Supply Demand This paper will be discussing the definitions of demands, economics and supply and what how they play a role in health care. The definition of Demand: “The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price. The demand curve is usually downward sloping, since consumers will want to buy more as price decreases. Demands for a good or service are determined by many different factors other than price, such as the price of substitute goods and complementary goods. In extreme cases, demand may be completely unrelated to price, or nearly infinite at a given price. Along with supply, demand is one of the two key determinants of the market price.” When it comes to demands in health care, we can look at scheduling. Patients will need to make an appointment to be seen, and scheduling can be done the same day or in the future depending on what the visit is for. If there is a high demand of patients and the supply is not there then patients will be scheduled on the Backlog Reduction Plan. These are schedules for the future with the intent to keep the workload down. Example: can another physician see a patient and how can the person be treated without having to come back. Health...
Words: 1012 - Pages: 5
...In a hypothetical economy, supply and demand should be equal to attain equilibrium in the economy. However, in a real economy that is not the case. There is always an imbalance. Economic policy refers to the actions that the government takes in the economic field and attempts to create regulations to not let any one interest overpower other interests. There are many economic policies relating to the supply side of economics, demand side, and monetary policy. Economists favor certain policies whether they stimulate demand, stimulate the supply of goods and services, or some economists prefer policies based on the growth of the money supply. Supply side economics is a macroeconomic theory which argues that economic growth can be most effectively...
Words: 873 - Pages: 4
...Economic Terms in the Health Care Industry Nicole Hunter HCS/440 Economics: The Financing of Health Care August 27, 2012 Kristin McFarland, MSA, AASPR Economic Terms in the Health Care Industry In this paper the history of economics will be discussed and how economics pertains to today’s health care world. Understanding terms that are used in economics can help with better understanding this subject. We will discuss terms such as economics, supply and demand, macroeconomics, microeconomics, elasticity, inelasticity, and GDP. Supply and demand will also be researched further and the different issues that it can apply to in the health care industry. Economics Economics is a science that focuses on distribution, production, and consumption of services and goods. Resources that can be used include talent and time available, buildings, land, knowledge, and equipment. Knowledge of how to use all of these resources to create a successful products and services is also useful in economics. Some choices that are made in economics are, just how much time to dedicate, how much money to save, how much money to save, combining of resource, and the role of the government. Supply and Demand The price of a commodity is the relationship between supply and demand. Supply and demand is essentially the backbone of the economy. Demand refers to the quantity of products and services that buyers wants and are willing to buy within a certain price range. Supply is how much can be offered...
Words: 1035 - Pages: 5
...Student Name: Instructors Name: Date: Supply vs Demand Abstract Supply and demand are two important concepts in a marketplace. These concepts are dynamic and vary from market to market. The objective of this paper is to compare and contrast the supply and demand concepts based on available scholar material. The comparison involves reviewing the literature material under the definitions of demand and supply; the relationship between supply and demand; the effect of supply and demand on the market; and the factors affecting demand and supply in the United States of America. The review uses book materials in economics including the classical economics. Definition of demand and supply The demand in economics is defined as the quantity of a good or service that consumers are willing and able to purchase at a given price during a given period of time, (Richard Ely, 1919). In economics, demand is greater than a desire to purchase. Richard argues that a beggar, for instance, may desire a good house, but due to lack of money to pay for the house, the demand becomes ineffective. Such a demand has no purchasing power. Thus, demand in a market is dependent on desire, affordability and willingness to purchase. Supply is defined as the number of goods and services that the seller is willing to sell at a given price, (Richard Ely, 1919). Richard clearly states that supply is seller-centered. Like the demand concept, supply depends on the availability of goods, the price of the goods...
Words: 1104 - Pages: 5
...Demand and Supply: The Basics 21 FUNDAMENTALS OF ECONOMICS FOR BUSINESS - (Second Edition) © World Scientific Publishing Co. Pte. Ltd. http://www.worldscibooks.com/economics/6794.html Chapter 2 Introduction The most basic, and in many ways the most lasting, lesson to be learnt from “Economics 101” relates to the fundamental concepts of demand and supply and their interaction. These are usually presented in a simple graphical format involving demand and supply “curves”. The word is in quotes because in this chapter, for simplicity, we will actually assume only straightline relationships between price and quantities demanded and supplied. The main issue that is important in reality is the direction of the relationship between prices and quantities. Will a reduction in price lead to an increase in the quantity demanded of any particular product or service? Will an increase in price lead to an increase in supply? And so on. The principal technical tools for analyzing demand and supply conditions in particular markets, then, are the demand and supply schedules or curves. The demand curve shows an estimate or conjecture about the relationship between the price of any particular product or service and the quantity of that product that will be demanded by consumers. It is usually assumed to slope downward, in the general case, for most products and services. In other words, the lower the price of the item, the greater the quantity of it that will be demanded. Technically, this...
Words: 6383 - Pages: 26
...INTI INTERNATIONAL UNIVERSITY COURSE STRUCTURE COURSE: ECO1203 ECONOMICS 1 (4 cr) ECO1207 MICROECONOMICS (4cr) PREREQUISITE(S): None COURSE DESCRIPTION: This course is designed to enhance the students’ understanding of basic microeconomic concepts and theories in order to equip them with the basic conceptual abilities and skills in economic problem solving. The theories will include the basic economic problem, supply and demand analysis, consumer behaviour, market structure, production and cost and market failure. LEARNING OBJECTIVES: The aims of this course are to enable students to: Apply basic theoretical microeconomic models as a framework for understanding the real world problems. Establish the ability to communicate ideas pertaining to the basic microeconomic concepts, theories and events effectively, both verbally and in writing. LEARNING OUTCOMES: Successful students will be able to: Explain the core economic problems such as the scarcities and choices. Explain how economic problems can be reduced by improving the use of available resources and by using the concept of opportunity cost. Explain how equilibrium prices and goods are determined by using demand and supply curves analysis. Explain the behavior of individual firms towards maximizing profits (minimizing costs) in a perfectly competitive or monopoly market in determining the optimal production of goods and services and optimal price level. Calculate the necessary production...
Words: 741 - Pages: 3
...city of Atlantis, we learned how the supply and demand curve moves back and forth and their relation to the equilibrium price. Depending on the health of an item or service that has an elastic price, the economy can and will directly effect the supply and demand of said product or service, and in this case two bedroom apartments. Two Micro and Macro Economic Concepts There are two concepts that stuck out to me in the simulation. One of them being prices, or pricing theories and the other being economic welfare. Based on supply and demand, the simulation showed how because of demand the prices on the two bedroom apartments can increase, especially if there is an influx in demand or a shortage in supply. In the opposite scenario, prices can decrease if demand is low and supply is high. This relates to economic welfare because is the economy is struggling, and then prices for two bedroom apartments are affordable. The pricing is elastic. Where as if the economy is in surplus, we experience inflation and the prices are higher and supply could be bleak. Shift in the Supply Curve There were multiple shifts in the supply curve within the simulation in the city of Atlantis. The supply shift that I took most interest in was when the IT and Biomedical companies started taking up residence in Atlantis. Suddenly, the population has increased the supply has stayed the same but the demand is now significantly more with the...
Words: 1046 - Pages: 5
