Ok what did we do today for school? Let me recap. First thing in the morning we had our revision for econs essay questions for our lecture. Mr Lam never fails to 'excites' me, Cel and Luv with his ever boring lesson. Than we had physical training and was doing PT with Fauzi. woo hoo. now my shoulder is aching. ouch. Follow by Ms zeenat econ's tutorial, she stole my best friend-Jimmy!?! who cares. Than follow by chinese and yeah we had a lunch break. The last lesson of they day is Math. I love Wednesday ever so much because i can head home and hit the sack early. Yawns.
Econs Lecture We did a qn about explaining the concept of PED, YED and CED(aka XED) and their determinant. [12]
1st para: Definition of PED: measure the degree of responsiveness of the Qty dd to the change in the px of the goods itself, c.p.
Definition of YED: measure the degree of responsiveness of the change in demand due to a change in the income of the consumers, c.p.
Definition of XED: measure of the degree of responsiveness of a change in demand og good A due to a change in the px of goob B, c.p.
than you give the formula of all 3 elasticity demand.
follow by the 'significance of the sign and elaborate on the relationship between the two variable'.
Ep is usually -ve due to the law of demand which explains the inverse relationship between px and Qty dd- increase in px of a good will lead to a decrease in the Qty dd for it, vice versa.
Ey is +ve when it is a normal good.
Ey is inferior good when it is -ve.
Ec is +ve when it is a substitute good
Ec is -ve when it is a complement good.
Remember to talk about the significance of the extent of change. (the less than one and more than one concept)
Determinant
PED:
Availability of substitutes
Proportionate of income spent (demand curve reflects the willingness and ability to purchase a good at alternative px. Eg- Increase in px of housing will led to a decrease in the consumer's ability- Y px elastic)
Time period (time to readjust and will become more elastic in the LR where consumers can fully adjust themselves to other alternatives, satisfying the same wants.)
YED:
Degree of necessity (eg.food, clothes etc often have YED<1.)>
XED:
closeness of substitutes (increase in px of one gd leads to an increase in demand for another good, XED=+ve) /complement (increase in px of one good leads to a decrease in the demand for another, XED=-ve)
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