Economics Help

cheechm · 27 May 2010 at 19:57

Probably a pretty simple one. In my IB diploma I have to do a coursework on macroecomics.. So I am talking about consumer confidence.

Is it alright to talk about elasticity of demand when talking about increasing consumer confidence to boost aggregate demand?

Cheers

Nitrojan · 27 May 2010 at 20:00

I would have said so :confused:

elasticity of demand applies to pretty much everything doesn't it whether it's simply demand or aggregate demand? I may be wrong, I only did AS level economics and got a D

Sorry if I am not much help heh

cheechm · 27 May 2010 at 20:06

Well I presumed you could, so maybe I will and we'll see what the teacher does. Unfortunately it has to be in tomorrow so I can't really ask him.

Nitrojan · 27 May 2010 at 20:08

Good luck

[TW]Fox · 27 May 2010 at 20:10

I guess it depends what point you are trying to make. After all, if you have a product that is very inelastic you dont need to increase consumer confidence, as they'll buy it anyway..

Nitrojan · 27 May 2010 at 20:11

Thats if it's a necessity

cheechm · 27 May 2010 at 20:24

Well basically the coursework is a 700 word commentary on a news article. Mine is: http://economictimes.indiatimes.com...ts-into-fast-recovery/articleshow/5884862.cms

I basically plan on saying: We can see how income affects consumer confidence through income elasticity of demand, as if a consumer's income increases, their demand should also increase for particular goods and services.

icysniper · 27 May 2010 at 20:26

sorry to completely derail the thread but I'm doing economics for the IB dimploma next year and was wondering what its like as an option, and if you don't mind where are you doing the diploma?

TS7 · 27 May 2010 at 20:29

Yes you can.

cheechm · 27 May 2010 at 20:42

icysniper said:
sorry to completely derail the thread but I'm doing economics for the IB dimploma next year and was wondering what its like as an option, and if you don't mind where are you doing the diploma?

I do it at Standard level and find it quite interesting actually. It is definitely not one of the harder standard levels and is something nice to do if you have never done economics. The coursework isn't too hard and the exams can get you to think in a positive way.

icysniper · 27 May 2010 at 20:45

cheechm said:
I do it at Standard level and find it quite interesting actually. It is definitely not one of the harder standard levels and is something nice to do if you have never done economics. The coursework isn't too hard and the exams can get you to think in a positive way.

cool thanks for the heads up, was a bit worried about not liking it etc, but sounds worth it now, oh and yeh standard level here also

cheechm · 27 May 2010 at 20:55

Ok but now I'm confused. According to the article, average price level has increased even though demand has decreased. How does that work?

cheechm · 27 May 2010 at 21:14

Only thing I can think of is the fact that due to a drop in demand, producers need to increase their profit margin. Anything else?

[TW]Fox · 27 May 2010 at 21:17

Nitrojan said:
Thats if it's a necessity

Which it almost always is if its hugely inelastic. If it wasn't a neccessity then it would be more elastic?