SAINT AUGUSTINE UNIVERSITY OF TANZANIA (SAUT) FACULTY:SOCIAL SCIENCE AND COMMUNICATION DEPARTIMENT:ECONOMICS COURCE: BAPRM 1 STREAM (B) SUBMITTED

BY: MALETHO . INNOCENT .I SUBMITTED TO: MRS. ROBBY WARIOBA ADMISSION NUMBER: BAPRM 28660 SUBJECT/CODE: ECONOMIC ECS 115 DATE OF SUBMITION:6/12/2011 CONTENT: QUESTIONS: 1/ briefly explain what economic is about and why do we study economic. 2/ Distinguish between change in demand and change in quantity demanded. What cause change in demand. 3/ Tell between demand curve and supply curve which has a positive and which has negative slope.

Question 1/: briefly explain what economic is about and why do we study economic.

INTRODUCTION: A/ Economic is a study of human behavior and choice making , according to my opinion. But according to Robbins the master of economics says is a science of human behavior as a relationship between ends and scarce means which have alternative uses. And his definition based on some following aspect such as: (i)Economic is science- mean its scientifically on maximize or minimize.exp by study consumer and est. (ii)Unlimited ends- refers to wants. That means the human being is unlimited in nature in resources. (iii)Scarce means- refers to resources, on natural such as land,water,air and e.t.c and man-made resources such as time, money and e.t.c. (iv)Alternative uses- means not only resources are scarce also there are alternative uses.exp coal can be used as fuel on production industrial not only that even on running engine like on train and e.t.c. An important on Robbins definition is that does not distinguish between non material and material, between welfare and non welfare. Robbins has made economic quite impersonal and colourless. Although we do have others meaning and definition which explain about economic from different people exp: Alfred Marshall(1922), Adam Smith(1776) and others but the meaning of economic in briefly by study the nature of economics I can sum up by saying that the economic is both science and art.

B / Why do we study economic? Let me take you back little bit on my introduction on explain about what is economic according to Lionel Robbin says about those aspects on economic is science, unlimited ends, scarce means and alternative uses. I can pin point out why do we study economic or in another words the importance of study economic. And are such as:To make overall development of a certain firm: economic help on the organization to take a step in vast way if there are going to follow up on economic theories and others concept. Example led to expansion of a firm and competition among others firms because in the business challenge is among the vast step to move on. Help on profit maximization: led to help on gain profit on a certain business by due to application of economic theories in business practice. Expansion of market share to the society: led to creating market share by referring to market it can be people or organization with needs to satisfy, money to spend and the willingness to spend it. This set of actual and potential buyers of a product or service. These buyers have particular needs and wants that can be done through exchange. This is among the vast important of economics. Led to improving living standard of people: due to the application of economic theories on any business activity led to creating a good life among those whos applied. The situation of being employed or have your own self employ led to gain and saving profit of a certain action business and that profit led to improving yourself in socially, economically and physically. Led to set of employment or job opportunity: economic led to creating self employ and employing on a certain firm , this is because of rose of economic in the society by development of a firm, industrial service and others business organs. Economic is among the vast source of employment and job opportunity. Help on making alternative choice and planning: by cross check up on the part of opportunity cost this is due to the forgone or action of sacrificed alternative action. And also help on planning by looking on the action of customers due to demand and supplier. Therefore the economic led to the planning and making alternative choice making. Development of science and technology: due to competition among different firm in business or different business practitioners led to bring different materials in the market share and different commodities of high quality and this led to the development of technology exp: the vast no of mobile phones in the market now days such as nokia ,blackberry, tecno, Samsung and e.t.c

Help to satisfy needs of people in the society: by taking you back little bit the definition said by Alfred Marshall (1922) is the studies of mankind in his ordinary business life. Therefore the economic we are daily applying on our life style and led to make someone satisfy on his or her progress. Exp: find someone make decision of taking a daladala instead of taking a taxi due to avoid the high price of tax and taking a daladala which its in low in order to bajet his or her money , this is economic principle.

Conclusion: due to explain briefly about the economic is about and looking about why we study economic I found that economic is about the science and arts. And found that also economic its categories on two different scope such as MACRO-ECONOMIC and MICRO-ECONOMIC. And on micro-economic is all about the behavior of individual decision making in a firm or industry in a national economy exp such as: product pricing ,consumer behavior, location of industry and e.t.c. about the macro-economic as all about the behavior of the economy as a whole exp such as: general price level , national income and output and e.t.c. and this macro deal with aggregates or average of economic quantities. A fundamental concept of economic that help the management to take correctly decisions and dealt with it in the society.

Question 2/: Distinguish between a change in demand and change in quantity demand, and what cause a change in demand?.

INTRODUCTION: What is demand? Demand refers to the quantities of goods and service that consumers are willing and able to buy at a given price and specific time and periods. Therefore demand should be support by willingness ability. And when you explain about demand must state on its LAW known as law of demands LAW OF DEMANDS State that ! As per ceteris paribus The lower the price the greater quantity demand. But demand low can be stand and be represent by three (3) pillars such as: 1/DEMAND SCHEDULE 2/DEMAND CURVE 3/MATHEMATICAL REPRESENTATION

 Demand can either changed according to the law, state due to supply theories and demand theories too. And this its due to quantities. Therefore there is different between change in demand and change in quantity. I can explain their different on this way:Demand change-refers to increase and decrease in amount of purchase in a market due to some change factors other than price. Diagram of demand change:

Change quantities demand refers to increase or decrease in the amount of a commodity in the market. due to supplier change commodities because of competition and improvement of science and technology and he or she is except their customers will either being satisfy and need the product on market equilibrium. Diagram of change quantities demand:

What is market equilibrium? A situation in a market when the price is such that the quantity that consumers wish to demand is correctly balanced by the quantity that firms wish to supply. Therefore I can top up my point by elaborating more about the different between change in demand and change in quantity due to demand curve and supply (curved) Demand curved:When consumers increase the quantity demanded at a given price, it is referred to as an increase in demand. Increased demand can be represented on the graph as the curve being shifted to the right. At each price point, a greater quantity is demanded, as from the initial curve D1 to the new

curve D2. In the diagram, this raises the equilibrium price from P1 to the higher P2. This raises the equilibrium quantity from Q1 to the higher Q2. A movement along the curve is described as a "change in the quantity demanded" to distinguish it from a "change in demand," that is, a shift of the curve. there has been an increase in demand which has caused an increase in (equilibrium) quantity. The increase in demand could also come from changing tastes and fashions, incomes, price changes in complementary and substitute goods, market expectations, and number of buyers. This would cause the entire demand curve to shift changing the equilibrium price and quantity. Note in the diagram that the shift of the demand curve, by causing a new equilibrium price to emerge, resulted in movement along the supply curve from the point (Q1, P1) to the point Q2, P2). If the demand decreases, then the opposite happens: a shift of the curve to the left. If the demand starts at D2, and decreases to D1, the equilibrium price will decrease, and the equilibrium quantity will also decrease. The quantity supplied at each price is the same as before the demand shift, reflecting the fact that the supply curve has not shifted; but the equilibrium quantity and price are different as a result of the change (shift) in demand.

The movement of the demand curve in response to a change in a non-price determinant of demand is caused by a change in the x-intercept, the constant term of the demand equation.

Supply( curved): When technological progress occurs, the supply curve shifts. For example, assume that someone invents a better way of growing wheat so that the cost of growing a given quantity of wheat decreases. Otherwise stated, producers will be willing to supply more wheat at every price and this shifts the supply curve S1 outward, to S2an increase in supply. This increase in supply causes the equilibrium price to decrease from P1 to P2. The equilibrium quantity increases from Q1 to Q2 as consumers move along the demand curve to the new lower price. As a result of a supply curve shift, the price and the quantity move in opposite directions. If the quantity supplied decreases, the opposite happens. If the supply curve starts at S2, and shifts leftward to S1, the equilibrium price will increase and the equilibrium quantity will decrease as consumers move along the demand curve to the new higher price and associated lower quantity demanded. The quantity demanded at each price is the same as before the supply shift, reflecting the fact that the demand curve has not shifted. But due to the change (shift) in supply, the equilibrium quantity and price have changed. The movement of the supply curve in response to a change in a non-price determinant of supply is caused by a change in the y-intercept, the constant term of the supply equation. The supply curve shifts up and down the y axis as non-price determinants of demand change.

Diagram: of supplier and demand curve:

B/ what cause change in demand? Demand change can be led to some different factors such as : Change in consumers income: due to the income of consumer being change from high to low can led to the commodities either going fast or no , being sell or not sell ,on the market or out of the market. The income of consumer is among the vast point of change in demand. Change in exogenous factors: this is due to fashion in the society of certain commodities and social structure of a certain place. This can led to a vast change of demand. Change in taste of consumers: this is due to the taste of the consumer being interesting on the certain commodities and lay on that and you find the supplier is having another commodities which he/she do not sell it in high demand but others are in high demand due to what customer being taste of something. Exp a shop of clothes and you have high demand of people who love jeans but for the suit or trouser there is low demand. You as a

supplier you have to know that the taste of you consumer they need jeans than trouser or suits. Change in the price of related goods:(substitute and complement) Due to the substitute of related goods serve the same purpose when you found a thing you want it is not there e.g. (fish or meat). On the others side of complement this are goods which are inter-related such as a car with petrol, pen and ink and e.g. , therefore this can led to the vast change in demand in the certain market. Conclusion: on cross check up on the first step of the distinguishing between change in demand and change in the quantity demand and by using the reference of the aid of diagram. Also I pin point some point led to the cause of change in demand but also there some others such as advertisement and promotion , price of goods , seasonal prevailing at the time of purchase , new consumers , psychological effects. According to my opinion I think the factors of the determinants of demand can led or related to those factors of change in demand and if they have the different but it is little different.

Question 3: Tell between demand curve and supply curve which has a positive and which has negative slope.

SUPPLY CURVE.
The supply curve has a positive slope because supply needs to be made to meet the demand. Afterward, if consumers are satisfied with the product then the supply curve increase or remains positive and if consumers are not satisfied then decreases/saturates. The curve is generally positively sloped. The curve depicts the relationship between two variables only; price and quantity supplied. All other factors affecting supply are held constant. However, these factors are part of the supply curve and are present in the intercept or constant term.

diagram:

DEMAND CURVE.
The demand curve slopes downward from the left to the right that means it has a negative slope. The negative slope is often referred to as the law of demand which means people will buy more of the service, product or resource as its price fall.
The negative slope of the demand curve is due to the substitution and income effects. If the relative price of a good falls consumers will substitute that good for more expensive goods that will buy more of the good whose relative price has fallen and less of the other goods. This is the substitution effect. When the relative price of a good falls the consumer can buy the same bundle of goods as before the price decline and have some money left over. This money can be used to purchase more of all his consumption goods. In other words his purchasing power is called the income effect.

diagram

Conclusion: The relationship of price and quantity supplied can be exhibited graphically as the supply curve. The curve is generally positively sloped. The curve depicts the relationship between two variables only; price and quantity supplied. All other factors affecting supply are held constant. However, these factors are part of the supply curve and are present in the intercept or constant term..

References:- 1/ Mote, Paul Gupta , managerial economics, Tata McGraw Hill 2/ Sen., K.K an introduction of economics , Sultan Chand and sons. 3/ Hynes, W.W, Managerial economics analysis and case of business publication inc. Texas 4/ Sank ran , Business economics 5/ www.amosweb.com/.../awb_nav.pl?...slope...supp... 6/"Marginal Utility and Demand". Retrieved 2007-02-09. 7/ Thomas M. Humphrey, 1992. "Marshallian Cross Diagrams and Their Uses before Alfred Marshall," Economic Review, Mar/Apr, Federal Reserve Bank of Richmond, pp. 323. 8/ Fleeming Jenkin, 1870. "The Graphical Representation of the Laws of Supply and Demand, and their Application to Labour," in Alexander Grant, ed., Recess Studies, Edinburgh. ch. VI, pp. 151-85. Edinburgh. Scroll to chapter link.