Ans: Anticipate and prepare for future
Answer:
When purchasing a vehicle it is important to weigh out your decisions prior to your purchase. Safety is very important but it comes with a price. For example if you want airbags and anti-lock brakes you will need to buy a newer vehicle and that will cost you more money. If you want to drive a larger SUV that will protect you more because of its size you will be paying more for gas. It all comes down to a person's views on safety and personal freedoms...and of course cost of the vehicle. For me it will always boil down to cost and efficiency of the vehicle.
Explanation:
I did the homework in class and got it correct.
<u>Question 1</u>
The correct answer is: "FALSE".
The total revenue earned by a firm is computed using the formula:
R= price * quantity
According to the formula, if the term "price" increases, R would increase too. But an increase in price usually decreases the amount demanded by consumers of a certain product. Therefore, if quantity demanded drops in a higher proportion than the increase in price, the final total revenue would decrease. So the final effect depends on the size of the two variations.
<u>Question 2</u>
<u>The determinants of demand are the following:</u>
- Price: inversely related to the quantity demanded, as the larger the price the smaller the amount demanded of a product.
- Income of consumers: directly related. The larger the income earned by an economic agent, the larger the amount demanded of a normal good (there are exceptions, such as inferior goods, for which income and demand are inversely related).
- Prices of related goods of services. If two goods are substitutes, the increase on the price of one, decreases the amount demanded of that product but increases the amount demanded of the other product. It two goods are complements, the increase in the price of one good decreases the amount demanded of it, and the amount demanded of the other product too.
- Tastes or preferences of consumers. If a product is in line with the general preferences of consumers the amount demanded will be large.
- Market expectations. For example, if a price is expected to rise, consumers might prefer to buy now and therefore demand increases at the moment.