EL1- 212

So far, we have discussed several topics:

1. The importance of understanding an economy

2. The actions of both a domestic and an international economy

3. How the economic problem drives the economy

4. How demand and supply components tie into the growth of production

5. Market structures

Now, we shall use the aforementioned concepts to relate economic principles to everyday life.

ECONOMIC SCENARIO

Let's say that in the last month, gasoline prices have increased - TRUE. You own a flower shop that makes deliveries and you have increased the prices of your flowers by 10% across the board. Place your answers under the specific question. Each answer should have no less than 2-3 sentences, more sentences are acceptable.YouMUST LIST the economic principals, laws, and/or concepts you are using to justify your answer or opinion. Example, I believe a reduced price will increase sales (Ref) - Law of Demand. If you can't name a specific reference, etc. you can give me the chapter the concept, etc. is from and also give an example or explanation from the chapter concerning the concept.

1. Explain the type movement each action may have on the demand curve.

2. What type of elasticity would each product represent in the market place?

3. Based on your answer to number 2, how would the price increases effect your business and what can you do to reduce resulting hardship.

4. Any other thoughts?