Majd Ahmad

11Th Grade
Economics

Extra Credit
Chapter 4 Assessment

1. Demand curve

2. Normal good

3. Income effect

4. Elasticity of demand

5. Unitary Elastic

6. Law of demand

7. Complements

8. Using Graphic Organization

9. In my opinion I think the substitution effects is when there are two products
that are almost alike and can be bought instead of one another for the same
reason. For example: butter and margarine, ford trucks or Toyota trucks,
these items can be bought instead of each other. If the butter is more
expensive than margarine, my demand for margarine goes up, because it is
cheaper. The same goes to the trucks, there both trucks now its just the
matter of the price.
10.When there is a change in an influencing factor other than price, there may
be a shift in the demand curve to the left or to the right, as the quantity
demanded increases or decreases at a given price. A number of factors may
influence the demand for a product, and changes in one or more of those
factors may cause a shift in the demand curve. Some of these demand-
shifting factors are:
A) Income - an increase in income shifts the demand curve of normal goods
to the right.
B) Expectations of a price change - a news report predicting higher prices in
the future can increase the current demand as customers increase the
quantity they purchase in anticipation of the price change.
C) Number of potential buyers - an increase in population or market size
shifts the demand curve to the right. Also like advertisement. It can influence
potential buyers to buy the product in question.

11.The main use of calculating the elasticity is to make a price range and pricing
decisions that people will buy the product at.

12.Some factors are:

a) Time- The longer the time period, the more easily firms can adjust the
price.
b) Production time- If a good is manufactured quickly, supply can be
increased easily.
c) Stocks- If a firm has large amounts of stocks, supply can be increased
easily.
d) Capacity- If labor and capital are underused, supply can be increased
easily.
e) Factor mobility- If resources can easily move in and out of the industry,
then supply can be increased easily.

13.Inferior goods have negative elasticity’s of demand. As income rises, the

quantity demanded actually falls.

14.Drawing Conclusions- False, an increase in income shifts the demand curve to

the right not the left. Because as income increases your demand for a normal
good increased because no you have more money to buy more products.

15.Testing conclusions-

Product Elastic/Inelastic Prediction Chart

 Sedan Car Elastic

Watches Inelastic

Pens Elastic

16. One thing you can do to keep your demand high, is to advertise your
product. Also increase quality and production rate. Because if you have your
product in stock the price will be redused again.

17. 78

18.Time, such as traffic (get to work late) and time to take wait for a haircut, also
time to finish cutting the lawn. Time can affect it if a news report says we are
all wasting our time.

19.Haircuts

20.Lawn mowing is low and taxi rides is high in an urban area because people
travel more than cutting the grass. Also most people in the urban area don’t
have grass. They usually travel from
place to place by taxi to reduce traffic in a populated place.

Lawn mowing is high and taxi rides is low in the suburban are because people
have vehicles to drive and get around, so they don’t need much taxis. But
lawn mowing is high because they all mostly have lawns around their house
that needs to be cut.

21.Lawn mowing