Determinants of Demand Exercise 3-2

Many factors may cause changes in demand, below is some of those factors:

-        Change in Consumer’s tastes and preferences.

-        Consumer income

-        Prices of complementary products

-        Prices of substitute products

-        Change in population

-        Expectation of future prices, change of incomes or availability.

-        Change in age distribution and income distribution.

Green tea products in markets

Lately many health related programs and health reports assuring the great benefits of green tea to the body and to health of the human being.

With the increased awareness of the need to the healthy products, the demand on green tea bags increased in the last two years, as of the latest reports from the sales department in one of the biggest companies producing green tea in the Middle East.

Below is a table which shows the change in demanded quantities of green tea during the last two years:

Price$	quantity demanded (in Ton)       2009 (per year)	quantity demanded (in Ton)       2011 (per year)
5	50	60
10	45	55
15	40	50
20	35	45
25	30	40
30	25	35

The Graph below show the change in the Demand and the Quantity demanded

Dynamic market and Mixed economy - Economic Games Exercise 2-2

               In a mixed economy, market forces and government decisions determine which goods and services are produced and how they are distributed. The government does not direct the private sector to produce the goods and services; the decision is made by the producers depending on the market.

So how may the price influences affect my decision in buying and selling?  Definitely, the lower the price is, the more I want to buy and the higher the price is, the more I would like to sell.

               In face of scarce resources and money, choice is a forced necessity, the choice is the decision to produce one product and not produce another, to buy some product and not to buy another, to sell one product and not to sell another, also the opportunity cost is a fundamental term in economics which represents the value of the next-best alternative that is given up as a result of making a particular choice. When I face a scarce in money, I may think of taking a loan to improve my business and to support my choices.

               By watching the price changes in the markets and also the demand and supply graphs available I can expect, or it may help me take the right decision in buying and selling (prices and quantities) which may lead to an increase in the demand and supply of my products.

               Finally, I have to admit that I found playing this game is very complicated and I was disappointed in the beginning from the huge loses I made in money, lands…etc. but gradually I started to read every hint I see and every warning, also watching my budget and watching the demand and supply In the markets, I which I consider the main provided info may help me taking my decisions.

I will keep trying to get better score…

Good luck!

 

Possibility Curve Exercise 1-2

The production of goods and services is one of the factors analyzed by the economics, which uses economic models to explain the various combinations of the output that can be produces from the available resources and technology improvement. This model of the production is represented by production possibilities curve. Figures(1.1-1.4) illustrate the production possibilities curve models.

As we can see, The production possibilities of two different goods per certain period is shown in Fig. 1.1, while Fig. 1.2 illustrate the Law of increasing costs where the production level of any item increases, its per unit cost of production rises. In figures (1.3 & 1.4) we can see the effect of technological change on the production possibilities, and also the different growth rates for two economics and how the production possibilities curve reflects the growth of each economy.

Economics is sometimes called the Science of choice, as “factors of production” in any economy are seen as scarce by economists, in other words, no economy has sufficient resources to produce all the goods and services, and in face of people’s unlimited demands and society’s limited resources, choice becomes a forced necessity, the choice of producing a particular item rather than the other can be determined and the decision can be made depending on the production possibilities, its always involved a trade-off with the next best alternative that is scarified.

There are many examples in our life of scarcity and choices, for myself for example, I have a degree in computer and systems engineering and in the other hand I have a long and good experience in finance and administration, I landed in Canada last June and after investigations, simple survey to the nature of the life in Canada, how do people make their living, the markets, the property prices, employment’s conditions, I made a decision to study Business and accounts. Scarcity in studying and scientific degree in accounts in spite of all the experience I have, made me chose to study, and by returning to school, the opportunity cost for me will be hours used to be spend with my family in addition to 3 workings hours which decreases my income.