Week 3 Assignment - Micro Economics- Due by Sun by 5pm CST

Week 3 Assignment

Elasticity of Demand

The demand for goods varies based on the change in the price of the goods. For example, if oatmeal costs less than cereal, consumers would buy more oatmeal for breakfast. However, the demand for inexpensive goods and services is not significantly affected by price fluctuations. Similarly, the demand for essential goods that have no substitute on the market, rarely changes with a change in price.

Submit by Day 7 a 300- to 700-word paper that addresses the following:

Identify a product that you regularly consume, such as soft drinks or a particular snack food. Describe how your demand (consumption) will be impacted by a 25% price increase. Conversely, how will your demand (consumption) change if the price drops by 25%? Is your demand for this product elastic or inelastic? Explain why.

Assignments must bein APA style and format. Information on APA style is from theWalden Writing Center.

In addition to fully answering the assignment’s questions, each Assignment will be evaluated for clarity of writing, critical analysis of the issues, proper use of references to support the positions taken, and adherence to APA standards. Also see this assignment’s rubric, provided in the Course Information area.

Required Resources

Readings

• Frank, R. H., & Bernanke, B. S. (2010). Principles of microeconomics, brief edition (2nd ed.). New York, NY:McGraw-Hill/Irwin.
  • Chapter 3, “Supply and Demand” (pp. 61–94)
    
    Chapter 3 introduces the supply-and-demand model of a market. The chapter also compares central planning and the market as alternative methods of allocating resources. In addition, the chapter explains how to use the supply-and-demand model to explain changes in prices and quantities.
    
    Focus on the examples provided in the demand-curve and supply-curve sections. In addition, focus on the shifts in these curves.
  • Chapter 4, “Demand and Elasticity” (pp. 62–82)
    
    Chapter 4 introduces the concept of elasticity and explains how variations in prices, incomes, and other economic factors affect the demand and supply of products. The chapter also describes the concept of the price elasticity of demand. This concept is used to explain changes in the values of the prices and quantities of products.
    
    Focus on the graphic interpretation of price elasticity, elasticity, and total expenditure, and review the table showing the price elasticity of demand for different products.

Media

• Kahn Academy. (2014g). Law of demand [Video file]. Retrieved from https://www.khanacademy.org/economics-finance-domain/microeconomics/supply-demand-equilibrium/demand-curve-tutorial/v/law-of-demand
  
  Note: The approximate length of this media piece is 8 minutes.

• Kahn Academy. (2014h). Law of supply [Video file]. Retrieved from https://www.khanacademy.org/economics-finance-domain/microeconomics/supply-demand-equilibrium/supply-curve-tutorial/v/law-of-supply
  
  Note: The approximate length of this media piece is 8 minutes.

• Kahn Academy. (2014a). Breakdown of gas prices [Video file]. Retrieved from https://www.khanacademy.org/economics-finance-domain/microeconomics/supply-demand-equilibrium/oil-prices-tutorial/v/breakdown-of-gas-prices
  
  Note: The approximate length of this media piece is 12 minutes 30 seconds.
• Kahn Academy. (2014r). Short-run oil prices [Video file]. Retrieved from https://www.khanacademy.org/economics-finance-domain/microeconomics/supply-demand-equilibrium/oil-prices-tutorial/v/short-run-oil-prices
  
  Note: The approximate length of this media piece is 11 minutes.

Optional Resources

• Frank, R. H., & Bernanke, B. S. (2011). Principles of microeconomics, brief edition (2nd ed.) [Supplemental material]. Retrieved from http://highered.mheducation.com/sites/0077316770/student_view0/index.html