Market Demand For Gasoline Economics Essay

merchandise Demand For Gasoline Economics Essaya) Analyze the market place involve for the fruit or attend and draw the accept curve. In the withdraw curve you atomic number 18 required to show different amounts of criterion withdrawed at different scathe with criterion in the horizontal axis and charge on the vertical axis. Mention 3 factors that can affect the con track down for this harvest-time or ser ungodliness.The harvest-tide that I choose is gun. Gasoline is elastic undecomposeds which gist, the bar acquireed for gas pedal argon respond greatly when the determines is changes. grocery gather up means by adding together the quantities ingested by all individuals at apiece toll. The graph above has shown the market exact for the gun.MARKET DEMAND FOR gas pedalPrice of flatulenceLisaMiraMarket study11282029716376134448532562137101DEMAND CURVE FOR petrolFrom this graph, we can see the relationship between the determine and amount is negative . At price $4, the quantity take aimed for gasoline is 8 units. When the price increasing to $5, the quantity demanded has decreasing to 5 units. And when the price has g unmatchable down to $3, the quantity demanded for gasoline has increasing to 13 units.We open 3 factors that can affect the demand for gasoline. Firstly is the average income of squanderrs. When people income rises, consumers tend to purchase to a greater extent automobile. So, the demand for gasoline alike pass on be summations. Secondly is the size of market. When the quash of population is high, people tend to use more(prenominal) gasoline for their transportation. standard like, in Malaysia, we suck in 2 million people. So people tend to use 25 snips more gasoline than Singapore only(prenominal) has 1 million people. Lastly is price of relate goods. Availability of related goods or complementary goods such as natural gas give affect the demand for gasoline also.b) Analyze the market sum up for th e result or service and draw the demand curve. In the supply curve, you are required to show the quantity demanded at different prices. You are also required to name 3 factors of take for the good or service you choose.Market supply is the sum of all individual supplies at separately possible price. Gasoline is elastic good for supplier. The graph above has shown the market supply for the gasoline.MARKET SUPPLY FOR GASOLINEPrice of gasolineDianaCatherineMarket supply101121233235444856713671017791120SUPPLY CURVE FOR GASOLINEThe 3 factor of return for gasoline isLand. It includes the soil, rivers, lakes, ocean, mountain, forest, minerals and resource.Capital. Capital goods are classified into four. Firstly is fixed capital, secondly, spread capital, thirdly is free capital, and lastly is specialized capital.Labor is an exertion of physical, goodly strength, ability and mental efforts of individual.What is balance? Find the equilibrium price and quantity of the product or servic e and draw its graph. You need to explain what happens when in that respect is a surplus for this product or service and show it in a separate graph.Equilibrium refers to a situation in which the price has reached the level where quantity supplied equals quantity demanded. At that equilibrium, there is no intent for the price to rice or fall. Equilibrium price means the price that balances quantity supplied and quantity demanded. The equilibrium price is also holler outed the market-clearing price. On a graph, it is the price at which the supply and demand curves intersect. Equilibrium quantity means the quantity supplied and the quantity demanded at the equilibrium price. On a graph it is the quantity at which the supply and demand curves intersect.EQUILIBRIUMPrice of gasoline ($)Quantity of demandedQuantity of supplied120121633135488551363177120THE EQUILIBRIUM OF SUPPLY AND DEMAND FOR GASOLINE chart FOR SURPLUSSurplus occurs when the price more than the equilibrium price and th e quantity supplied more than the quantity demanded. There is excess supply or a surplus. Suppliers will lower the price to amplify sales, thereby moving toward equilibrium. look up to the graph above, we can see the surplus occurs when the price increase to $6. At $6, the quantity of supplier is 17 and the quantity demanded is 3. Thats means, at the price, the suppliers want to administer more than demanders want to buy. When price of gasoline at $4 and the quantity supplier is 8 units, we call it equilibrium because at this price, the quantity of demand and quantity of suppliers is equal. When surplus occurs, we will loss in revenue and price will gradually falls to reach a read of equilibrium as suppliers will lower their price.d) Using the secondary data, show the changes of the demand and supply of these goods and service in the past and explain the result in word and then draw a graph.The price of gasoline in year 1973 has decrease to 1.5 dollars per gal, comparing to the previous year in 1967 the price is 1.8 dollars per gallon. Then, in year 1975, the price has goes up to 2 dollar per gallon. That time we call is the first oil cuff occurs. And then, the second oil shock occurs in 1983 with the price increases to 2.8 dollars per gallon. In 1985, the price of gasoline has decrease to 1.4 dollars per gallon and then its decrease the price to 2 dollar gain in 1990 when the first gulf war occurs. Lastly, in 2004, when the war in Iraq occurs, they have not many changes to the price of gasoline. The graph above has show the fluctuated price of gasoline. Refers to the graph, we can see the demand of gasoline has decreases when the price has increase because gasoline is an elastic goods. People can use gas when the price of gasoline increases. The supplier also increases when the price of gasoline is increases.GRAPH FOR GASOLINE2) blot the difference between modal(prenominal) good and inferior good? make 3 examples for each.Normal good is a quantity de manded for a specific good or service as a result of changes in the given level of income. A normal good is one that experiences an increase in demand as the real income of an individual or miserliness increase. To define a normal good is by calculating its income of demand. If this Coe-efficient is irresponsible and lower than one, the good is considered to be a normal good.An example of normal good isluxury carsmobile phoneTelevision.Inferior goods means a type of good for which demand decline as the level of income or real GDP in the frugality increases. This occurs when a good has more costly substitutes that see an increase in demand as the societys rescue improves. An inferior good is the opposite of a normal good, which experience an increase in demand along with increases in the income level.An example of an inferior good ispublic transportationhamburgerSecondhand television.In your opinion, is rhomb a normal good or an inferior good? Justify your answer. rhomb is a no rmal good because when the income raises, the demand for diamond also rises and vice versa. Diamond is such one of the luxuries good. Only some people who have a high income are afford to purchase it. Beside that, when the price of diamond is fall, the demand for the diamond will be increases. Thats means people are willing to buy a diamond when the price is going down. Thats what we call a normal good.c) Product x and y are substitutes and product y is an inferior product. What is the effect of an increase in the income on the demand of product y? How the change in the demand of product y affects the demand for product x? Draw the diagram for both product x and y and show the changes of demand curves in them.Product x and y are substitutes and product y is an inferior product. When the income increases, the demand for product y will be decrease because when the consumer has a high income, the demand also increases. They choose to choose a normal good compare to the inferior good. L ets say, when the incomes are normal, consumers prefer to eat a hamburger, but when their income increases, they prefer to go to restaurant to eat a healthy food. Thats means, the demand for hamburgers are decreases when the income rises. When the demand of product y is decreases, the demand for product x will be increases because consumer are consume to buy a product x much more than product y.It can show at the graph on a lower floorProduct xProduct y3) The table below illustrates how the total utility program-grade that Ahmed derives from eating ice-cream changes as he consumes more and more ice cream each day.Fill in the table above.Ice-cream wide-cut utilityMarginal utility0001121222210328643245342b) Draw a diagram and explain the law of diminishing marginal utility for Ahmed.Law of diminishing marginal utility for Ahmedi) Total utilityii) Marginal utilityThe law of diminishing marginal utility means, as the amount of a good increases, the marginal utility of that good tends to diminish. When we consume more and more good, our total utility will grow at a slower and slower rate. Growth in total utility slows because our marginal utility diminishes as more of the good is consumed.For Ahmed, at one consumption of ice-cream, the total utility is 12 and the marginal utility or their satisfaction is 12, but as he consume 2 or more ice-cream, the marginal utility has falls. By the law of diminishing marginal utility, the marginal utility falls with increasing levels of consumption.4) Differentiate market economy, omit economy, and mix economy.Market economy is a remains of allocating resource base only on the interaction of market forces, such as supply and demand. A true market economy is free of governmental influence, secret approval and another(prenominal) external interference. We also call it a laissez faire style. The individuals and snobbish area firms make major decision about output and consumption. Thats a private ownership of resources. Th e price and market systems are used to coordinate and post economy activity. Consumers would determine and influence the producers decisions to produce goods. In this pattern of stinting organization, firms, motivated by the desire to maximize profit, buy inputs and produce and sells output. Household, arm with their factor incomes, go to markets and determines the demand for commodities. The interaction of firms supply and household demand then determines the prices and quantities of goods.Command economy is an economy where supply and price are regulated by the government rather than market forces. Government planners learn which goods and services they want produced and how they are distributed. Sometimes we call it centrally plan economy. That is a public ownership of all recourse. Decision making is through and through central economic readying. Everything is controlled by the government.Mixed economy is an economy system in which both the private enterprise and a degree o f state monopoly coexist. All modern economics are conglomerate where means of production are shared between the private and public sector. We also called it a dual economy system. Mixed economy is a dominant form of economic organization in noncommunist countries. Mixed economies rely primarily on the price system for their economic organization but use a variety of government interventions such as taxes, spending and regulation to care macroeconomic instability and market failures.b) Do you obtain with the contention that mixed economy is the best of all the three system?Yes, I agree that mixed economy is the best of all the three system because in a mixed type economy, both, the private ownership as puff up as the state takes part in the means of production, distribution and other type of economic activities. The mixed economy allows private participation in the field of production in an environment of competition with an objective of attaining profit. On the contrary followi ng to the socialism features it includes public ownership in production for maximizing social welfare. Simply in such type of economy there is the presence of private economic freedom with centralized planning with a common goal of avoiding the problems associated with both capitalism as sound as socialism. In this system, the freedom in the economic activities are influenced by the government regulation and licensing policies.