EF Workshop 2 Demand and Supply

I know it's not and ideal graph, but at least i tried)

So this is our question:

The market for petrol

(a) A rise in the cost of refining petrol _H_

(b) A fall in bus and train fares _B_

(c) A fall in the price of crude oil and an increase in the price of cars _E_

(d) A rise in tax on petrol and a reduction in tax on cars _A_

Explanations
(a) Rise in the cost of refining petrol causes the supply curve to shift left, it means less supply and the prices increase. So the demand will contract( Remember the supply decreases demand contracts)
(b) A fall in bus and train fares, causes the demand to increase, which means various amount of people will travel by bus/train rather than cars... These effects will shift the demand curve to right causing the supply curve to extend.(demand increases supply extends)
(c) A fall in the price of crude oil will shift the supply curve to right, because cheaper the crude oil more of it will be supplied. An increase in the price of cars, shifts the demand curve to left, higher the prices demand decreases(if it's elastic)
(d) A rise in tax for petrol causes the supply curve for petrol to shift left, because, tax on petrol will raise the cost of production... Reduction in tax on cars causes people to buy more cars, which shifts the demand curve to right.


If one of my answers are wrong, comment please)

Research

Today i have realized that i need more knowledge, because i was really bad in the lessons, so i tried to get more knowledge by trying to answer questions from here and also, i have found some useful questions here. But most of the questions will seem to be hard... And also, in this website there are lot's of useful questions, i think one the questions are similar to the one which Chris gave us.

This is for EF student's

Hey guys)) I have just seen the exchange rates, and the pound is getting weak according to dollar.
According to my opinion, this is it's limit, it won't go down anymore.... So, i think that we should change our dollars into Pounds as much as we can) Remember SPICeD, it's the time... we are exports and this is the time when Pound has been weakened... we'll get more pounds for dollar. So hurry, according to my opinion we'll not have a chance after 2-3 days, or even less, because exchange rates are unpredictable.

HW(continues)

208-) B 217-) B

209-) A 218-) D

210-) C

211-) D

212-) D

213-) C

214-) A

215-) B

216-) B

Hw(continues)

2.6 Cross price and Income Elasticity of demand

187-) B 198-) A

188-) B 199 -) C

189-) B 200-) C

190-) A 201-) B

191-) A 202-) B

192-) B 203-) D

193-) C 204-) A

194-) B 205-) C

195-) D 206-) B

196-) A 207-) D

197-) D

HW(continues)

2.5 Price elasticity of Demand

163-) A 171-) A 179-) D

164-) B 172-) C 180-) c

165-) B 173-) B 181-) C

166-) A 174-) C 182-) B

167-) A 175-) D 183-) D

168-) B 176-) B 184-) D

169-) B 177-) B 185-) B

170-) C 178-) D 186-) D

Useful web page)

This is a useful web page, if you want to study economics as hard as you can. In this page, you would be able to find questions and topics, that we have been studying.

Hw, Multiple choices.

2.4
146) A 151) B 156) D 161) A
147)B 152) A 157) B 162) A
148) A 153) B 158) D
149) A 154) D 159) A
150) C 155) D 160) D

Using supply and demand analysis, explain the reasons for a rise in the price of cocaine.

According to my opinion, the demand for cocaine is inelastic. Because of that the supply for cocaine have decreased.(people still buy it for high prices) I think various amount of people stopped smoking cocaine(because of the treatment), and most of the people still don't smoke it. Most of the young adults, who are addicted to cocaine still buy it, but they are few other people buying it. The treatment for heavy cocaine users have reduced the consumption of cocaine. Because of those reasons, according to my opinion the production of cocaine have decreased in amount. The demand for cocaine is more, but supply contracts,(less supply more people buy it(prices will go up), because it's inelastic, but also because of the treatment the amount for the heavy cocaine users have decreased. This is my opinion, i don't know whether it's true or not. I think this is the cause, which makes the price of cocaine to mount.

here is the graph
:

Adding up: throughout the years the price for cocaine is becoming more cheaper.. last 2.5 decades, price for cocaine was much more expensive then this year. According to exchange rates, cocaine sellers are making less profit then they have used to, because the increase in euro and decrease in dollar gives less profit to the cocaine sellers who are selling the cocaine to America. Now it's much more profitable to take the cocaine out of the USA and to sell it to other countries. Also the price of marijuana effects the demand for cocaine. The Prices of marijuana and cocaine are negatively related, if the price for cocaine is high, marijuana maybe a substitute for some people.

Cost push and Demand pull Inflation

This post may help for the ones who are really behind from others..... (and for the ones who are not able to watch the video for aggregate demand)

Inflation is caused by combination of 4 factors. Those factors are:

* Supply of money goes up .
* Supply of goods goes down.
* Demand for money goes down.
* Demand for goods goes up.

Now we'll see the Definition of cost-Push inflation and Demand-pull Inflation and we'll try understand them by using those factors.

Definition of Cost-Push Inflation

If aggregate supply decreases it may cause inflation. Aggregate supply is decreased by those two main sources:

* An increase in wage rates
* An increase in the prices of raw materials

The decrease in aggregate supply engage(carry on) by increasing costs, and this inflation is called cost-push inflation.
Other things remaining the same, the higher the cost of production, the smaller is the amount produced. Because of the price level, rising wage rates or rising prices of raw materials such as oil causes firms to decrease the amount of labor employed and to shorten production.

Aggregate supply is the the total value of the goods and services produced in a country or simply factor 2 , "The supply of goods". The supply of goods can be shaped by factors other than an increase in the price of inputs , so not all factor 2 inflation is cost-push inflation.

What caused the price of inputs to rise?. Any combinations of the four factors could cause that, but the two most likely are factor 2 (Raw materials such as oil have become more scarce, which means quantity is less.), or factor 4 (The demand for raw materials and labor have risen). This is how we understand cost push inflation and demand-pull inflation by using 4 factors.

And this is the diagram: it shows that the price of the supply has increased(because supply has decreased, and demand has contracted.

Definition of Demand-Pull Inflation

The inflation caused from an increase in aggregate demand is called demand-pull inflation. Such an inflation may rise from any single factor that increases aggregate demand, but the main ones that increases the aggregate demand are:

1. Increases in the money supply(factor 1)
2. Increases in government purchases(more goods, supply increases)
3. Increases in the price level of the rest of the world.

Inflation caused by an increase in aggregate demand, is inflation caused by factor 4 ( which is an increase in the demand for goods, (which means Supply extends)). The three factors listed above, which increases the aggregate demand will also tend to increase inflation, for example:

1. Increases in the money supply, factor 1 inflation.

2. Increases in government purchases, The increased demand for goods by the government causes factor 4 inflation.

3. Increases in the price level in the rest of the world, Suppose you are living in the UK. If the price of chocolate rises in Ireland, we should expect to see less English people buying chocolates from Irish and more Irish purchase the cheaper chocolate from UK sources. From the UK's view the demand for chocolate has risen causing a price for chocolate to rise (factor 4 inflation)
Inflation in Summary
Cost-push inflation and demand-pull inflation can be explained using four inflation factors. Cost-push inflation is inflation caused by rising prices of inputs ,that causes factor 2 . Demand-pull inflation is factor 4 inflation, which can have many causes.

This is the diagram for Demand-pull inflation: Here we can see that Real National income has increased and the prices are going up, so the demand for goods is rising, more goods needs to produced, supply is extending.





Now on this graph: Demand-pull inflation caused the demand for goods to contract and supply to decrease. And the point LRAS is Full unemployment. When aggregate demand increases from AD1 to AD2 this will lead the economy to full employment, many firms will widen their profit, they'll increases the prices, the production will be more. As employment in the economy will rise, the demand for goods and services will be more inelastic. And this will allow firms to increase their prices(p1 to p2)


Thats all i think it's quite helpful))

W I F I su........ in efffffffff

EF have installed a new wifi in the jericho building, but that wifi . .cks, because the signal of that wifi is tooooo low. Most of the students, whos rooms are a bit far, their laptops even can't connect to the signal....( one of my friend, lex he suffers from Wifi, because the stupid signal can't reach he's room(although the wifi is new) and why should they suffer because of this wifi a? if you wanna go to student lounge or meeting room., there are loans of people there( your not the only one whos clever) and the internet is too slow, it's hard to watch a video which lasts for 5 minutes. Most of the students cant do their HW because of WIFI.(also internet)

For example: If one of my friends whos from my country, and he want's to study in Ef, and he starts to gather information(is it good or bad?) i will say the wifi is bad and some of the conditions are bad tooo. Ef needs to start to distribute it's problems, or the demand for Ef will be low, so petty amount of student's will come to study... If this kind of problem's will continue Ef will be just a ........................................ (i hope you understood) I read tom's blog about wifi and i totally agree with all the facts he wrote. EF needs to meliorate!!!!!!

Some fun, some pictures for Economics

This funny pictures shows that something(demand or supply) is shifting right or left.

This is a kind of Economic climate.




This is a Russian GDP structure for 2003, look the industry it's 26,4%, it's a big amount, but if you check the GDP structure for 2009 it might be different, but i couldn't find the same one as this.

And this is the Russian economy, it have diminished a lot since 2008, of course, because Russia's economy depends on the amount of oil they have, Ukraine stopped the oil transportation to Russia so it's economy has diminished.

British mortgage approvals rise 81 per cent

When i had a comment from my teacher Mr. Chris, in his comment there was a word which i had no idea what it is, that word was "Mortgage", so i was excited and i have made a research on this word. And i have found an interesting article to summarize.

BBA, the British Bankers' Association said: number of mortgage commendations in August has risen by 81.4% from the previous year to degrees not seen since before the worst of the credit crisis.

The figure describes that in August the numbers have decreased slightly, after seven successive monthly gains, the BBA was groovy to mark that the more important change was steady growth, with mortgage lending returning to levels last seen in the beginning of 2008.

38,186 mortgages were established in August, only 100 less than in July.

The final quantity of mortgages encouraged by the high street banks in August was £2.8 billion, which is more than £1.9 billion in July, by representing yearly growth which is just 4.6% . The figure shows repurchases and repayments.

The amount which is in the personal deposit has risen by £3.3 billion. Customers are spending less money from their credit cards, with £5.6 billion spent in August, it's a 13.6% descend from a year ago. According to BBA demand for personal loans was weak, because the balances have fallen by £1.9 billion in the first eight months of this year.

Because of the economic conditions, consumers are increasing their savings and controlling their appetite for unsecured borrowing.

G20 'to call for economy balance'

G20's peak in the US will call for major reclaims to boost a more balanced global economy, according to a research thah BBC have done.

A draft paper suggests that substantial policy changes may occur from G20 countries, including the UK, the US and China.

And by the time when stimulus packahes will continue for now, the document brought the creation of "transparent and credible" which means that support will be weakened.
Leaders will meet in Pittsburgh with the economy on their schedule..

The document states that major imbalance in the entire economy should be pressed(decreased).

If this doen't happen, the entire world will "face anaemic growth" which means the growth will be weak and slow.

still the paper doesn't propose any mechanism(process) for applying it's plans ,other than countries coming under pressure from the International Monetary Fund (IMF).

BBC business analogous Joe Lynam says that country's like China and Germany increased their Government spending's, but she says Uk needs to save more. I think this is true, because there is a budget deficit in UK, Government spending's are much more than the Revenues.

China was asked to allow it's currency,Yuan to rise, so the Chinese consumer will spend more on foreign goods.(For example my country :))) But Chinese wont do that!

Also more people argue that China should meliorate its health care, pensions, and other policies, so the people's savings who are with an additional payment will be reduced.

BY the document: Most of the facts states that the Recession will not be cured soon. Isn't it bad for English people? MR CHRIS is it bad for you?

IMF and G20's Financial Stability will be pulled up, by November, and the financial support will be more.

The document says that each country should find it's own way to roll back it's support.

HW Business( THE SMALL IDEA THAT CAME TO MY MIND)

This idea is all about ice-creams. One of my plans is franchising, i know it's a small business, but we don't have a high quality ice-creams in our country.( I know we are poor!!! but never mind.) At nights, usually i think about my future, what am i gonna do when i will be an adult. So one of the minor affair, that came to my nous is to build a big 2 flored ice-cream restaurant in my country.

The land is cheap in my country, so it wont cost me a lot. But franchising will cost me much more... According to my estimates, the profit should be more then then the expenses, and all the money that i have spent. Ice-cream is a good supply, and i think it's inelastic in our country during summer. But it's elastic during winter. First floor of my entire building will be a restaurant, and the second is gonna be an ice-cream floor. I hope people will enjoy eating their ice-creams in this building, because i will provide them lot's of opportunities.

Of course i will provide backups too, and Market Researches, and i will take care about SWOT.

10 Principles of Economics

I have just seen a video, about the Principles of economics. That video inspired me alot.

There are 10 principles of Economics. Seven of them demonstrates Micro economics, and other three, Macro economics. That video is really risible... There is a man whos making fun of the economics. People face tradeoffs, and it says, choices are bad, yeah i agree with this, before you make a choice, you should conceive. If you dont think this may lead the whole economy collapsing.

That man is making fun of economics, but the affairs that he's tattling about are all true.!

The cost of something is what you give up to get it. It's an oportunity cost. This also involves choices. Entire Economics is covered with choices and needs. Scarcity is the main weigh in Economics.

This is video also states that people are stupid. That video totally took my correspondence, because i think people are stupid.( NOT ALL) IF people were not stupid, this Crisis wouldnt accur. As well as the recession wouldn't occur in UK.

The video also states, that Trade can make everyone better off, but it's not true, trade CAN MAKE, IT WILL NOT MAKE, IT CAN! For some people trade is benefical, for some not. For example if a country makes a massive trade, it's benefical for them but it isnt! for the People in that country. Because there will be less supply of those cars, and their price will mount.

WAIT FOR FURTHER POSTS!!

UK is falling into recession

I read the BBC news, and it says that UK will sink into a recession unless the bank of England takes action. Yeah banks of England should take actions, but is it enough? I think NO, because government should come up with new ideas, which will inspire the economy and help to make it grow.

The Ernst & Young's Item club wants pound to be weakened. Why? if pound goes up it's beneficial for English people.

The Treasury and the Bank of England should start planning a large-scale currency intervention

It says, that Bank of England should interfere in the currency markets to sell the pounds and buy euro.

This tells that they are connecting a gap between these two. Why should England buy Euro? what if euro diminishes? They think euro is mounting, and this is the time to buy euro? This way to elude recession is the most stunned way ever. (this is my idea)

The article that i have read also states that housing market will follow the manufacturing sector into recession.

Manufacturing sector is already in recession, if the production is in recession it means there is less supply. So the prices for supply will increase, this may cause inflation. Uk is in a bad situation.

Many people in UK are Unemployed, this is the negative affect of recession. There are some positives affects too: Businessmans are making money, by increasing the prices of there product. Some people are just selfish, there is just one thing in their minds, which is MONEY, MONEY and MONEY!!!

They dont think of recession, about existence of other people.

WAIT FOR FURTHER NEWS

HW economics(200 word)

President of the Unites States Barack Obama condemned to the idea that Europe and America dissent on the demands for a financial stimulus. Inside the European union and European governments, debates rage to beat the crisis through the financial policy. As a leader of European government, Germany wants more proves of stimulus plans work, before investing more money. Although, American politicians worry about the cause hyperinflation, European Unions are arguing about the $6.5 billion projected infrastructure plan. Some of the Europeans dislike fresh stimulus plans. If the governments come up with right stimulus package, the pain
of the governments will turn into benefits.

Eu's single market solved some of the national problems, the gains from a return to growth will not be left in one country's borders. Dutch prime minister, Jan peter Balkenende states that European procrastination are more better than scarce tax revenues.
Mr Balkenendes organisation in the government has spent weeks discussing a fresh stimulus how to make an effort in November which was aimed mainly at the country's vast financial industry. Government extended guarantees to such behemoth dutch financial groups like ING caused Christian Democrats to worry.

Netherlands open economy is a leading voice against economic policy that invites some American congressman. Raise dutch wages, cut income taxes all these will not just absorb the income but also will escape in to savings

GOiNG DUTCH

Unemployment will rise from 3.9% to 9%, but Lans Bovenberg of Tilburg University, says that Dutch politicians can solve this problem, they have to clean up banks, boost exports and raise the retirement age, to 67.

Could Dutch politicians solve out all these measures? or is it a joke? Domestic pain can turn into gain. If that hope motivates the Dutch to spend for Europe, that will be good for everyone.

HW for economics

Economics is social science and it is important in our social life, political life, economic life and daily life. It is based on the pillar of a country which is progressing in the economic field. As it's nations are growing in the economic field. We make economic decisions every day, everything that involves arduous choices and sacrificing one benefit for another great benefit.

For example: Should I play games on my laptop instead of doing my HW? If you retain playing your laptop games, you'll get more delication,but you'll sacrifice the time to do your HW. IF you do your HW you'll not be punished in the lesson, but you'll have less delication. So economics is important and affects everyones life every single day.