Ask Economics Question

You are welcome to ask questions on Economics.

I will post the answer on this blog, for everyone to benefit from.

I shall try to answer the economics question and / or point to other resources but please bear in mind.

  1. The replies will be guidance and not for duplication. Your essays should always be your own work.
  2. My speciality is economics for British A Level standard. My university economics is rusty in parts, because generally I don’t use it in teaching A level economics.
  3. I can’t guarantee to always give answers it also depends on my time schedule.
  4. The aim is not to do people’s homework for them, but, help in the understanding of economic concepts.
  5. The answers will not necessarily be complete. I know several of my essays on this site could be improved.
  6. Please Write the Questions clearly and with proper spelling. Some questions I have not answered because they were not clear what was meant.
  7. I will answer as a new post. Check home page of blog for new post. With question and answers

I studied PPE at Lady Margaret Hall college, Oxford University, and currently work as an Economics A Level teacher. I have also examined several different economic units for Edexcel AS and A2.

If you find the information useful, you are welcome to buy me a coffee 🙂

By on October 30th, 2007

569 thoughts on “Ask Economics Question

  1. My question is explain why the value of income elasticity of demand for a good can be positive, negative or zero while the value of its price elasticity of demand is likely to be negative for 8 marks

  2. Assume that there are 50 (000) people that require cellular phone, the government decides to give a subsidy per cellular phone. Calculate the subsidy per cellular phone that the government needs to provide?

    1. PeD=%change in demand divided by % change in price
      %change is calculated by formula new-old divided by old times 100
      %change on demand is new which is new quantity 250 minus old times 100 which is 200 divided by 200 and at end multiplyed by 100 to get percentage so % change in demand equal to 25% now as for % change in price we will apply also rule new minus old divided old so answer will be 15 minus 30 divided by 30 equal – 50% (we ignore negative sign) so PEd will be equal change in demand divided change in price so 25 divided by 50 will be equal 0. 5 so demand here is less than one so demand is inelastic

    2. I need to edit something whole I was wroting I forgot to mention in some areas we will multiply by a 100 to get % change so here we use 2 rules in this problem which is ped=% change in demand divided % change in price and also to bring each one we used the rule new minus old divided by old times 100 hope I helped you

  3. Your friend is thinking about opening a hardware store. He estimates that it would cost $50,000
    per year to rent the store and another $50,000 on other expenses. In order to be an entrepreneur,
    he would have to quit his job as an economics lecturer that earns him $100,000 per year. If
    your friend thinks he could sell $180,000 worth of merchandise per year, should he open the
    store if he is rational? Why, or why not? Explain your answer with reference to a principle of
    economics. (10 marks)

  4. Your friend is thinking about opening a hardware store. He estimates that it would cost $50,000 per year to rent the store and another $50,000 on other expenses. In order to be an entrepreneur, he would have to quit his job as an economics lecturer that earns him $100,000 per year. If your friend thinks he could sell $180,000 worth of merchandise per year, should he open the store if he is rational? Why, or why not? Explain your answer with reference to a principle of economics.

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