Basic Economics with Tar Essay

993 Words Mar 14th, 2011 4 Pages
First of all, before I will discuss this article, I will define first what is Economics and its kinds. Economics is the study of how the forces of supply and demand allocate scarce resources. Subdivided into microeconomics, which examines the behavior of firms, consumers and the role of government; and macroeconomics, which looks at inflation, unemployment, industrial production, and the role of government. In this news paper article, it talks about the condition of the consumer with the inflation of the price of the food or goods. We as consumers, we are unique in many ways. We differ in our needs, wants and demands even in likes, dislikes, standards, lifestyles and traditions. Sometimes, our behavior as a consumer is hard to identify …show more content…
Monopolist firms (in their attempt to maximize profits) keep the price high and restrict the output, and show little or no responsiveness to the needs of their customers. And so, our freedom to satisfy our human wants is not completely unlimited. Last 2008, it was the great economic crisis in our country especially, the need of food. That’s why the price of rice rises since the demand is great and we only have limited supplies. It was the crisis of consumer goods. Accordingly, consumer goods is a commodity, or a physical, tangible item that satisfies some human want or need, or something that people find useful or desirable and make an effort to acquire it. Goods that are scarce (are in limited supply in relation to demand) are called economic goods, whereas those whose supply is unlimited and that require neither payment nor effort to acquire, (such as air) are called free goods. Thus, during that time there is what we called in economics as elasticity of supply which means the Responsiveness of producers to changes in the price of their goods or services. As a general rule, if prices rise so does the supply. Elasticity of supply is measured as the ratio of proportionate change in the quantity supplied to the proportionate change in price. High elasticity indicates the supply is sensitive to changes in prices, low elasticity indicates little sensitivity to price changes, and no elasticity means no relationship with price. Also

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