Law of demand, Microeconomics

The price of petrol fell during the past year.

a. Explain why the law of demand applies to petrol just as it does to all other goods and services.

b. Explain how the substitution effect influences petrol purchases and provide some examples of substitutions that people might make when the price of petrol falls and other things remain the same.

c. Explain how the income effect influences petrol purchases and provide some examples of the income effects that might occur when the price of petrol falls and other things remain the same 

 

Posted Date: 2/27/2013 12:10:07 AM | Location : United States







Related Discussions:- Law of demand, Assignment Help, Ask Question on Law of demand, Get Answer, Expert's Help, Law of demand Discussions

Write discussion on Law of demand
Your posts are moderated
Related Questions
Review the following information pertaining to the potato chip industry and answer the questions below in a five to six double spaced page paper (not including title and reference

Allocated Stock and Safety Stock  Allocated stock  A category of stock which ensures that current stock is set aside and not issued under the normal procedure.  Safet

INTERNATIONAL MONETARY FUND: The important objectives before the Fund presently are as follows: • To promote international cooperation; • To facilitate the expansion and ba

Supply and demand for a given type of MP3 player are given by the following equations: P=980-1.5Qd P=20+0.9Qs

Division of Labor The occupation or breaking down of jobs into simple and repetitive responsibilities.

Explain the meaning of the statment "coffee and tea are close substitutes".

if marginal cost descreases then what else is effected by this

SHORT PERIOD ANALYSIS: Short period in production refers to a time when some inputs remain fixed. A fixed input is one, whose quantity cannot be changed readily, whereas, a va

on what grounds is consumer surplus criticised?

Problem 1: i) ‘There is a trade-off between inflation and unemployment.' Do you agree with this statement? Justify your example using appropriate diagrams. ii) Mauritius is