Microeconomics Basic Concepts

?Economics is a social science that mainly focuses on different fields of knowledge dealing with the proper distribution, allotment, production and consumption of resources. Economics has been divided into two significant branches; one of it being the microeconomics and the other one being the macroeconomics. Microeconomics can be easily understood through the term micro itself which means small, microeconomics focuses on small level that is to say it includes areas of individual decision making and its core components include production, exchange, distribution and consumption. Macroeconomics on the other hand focuses on a much aggregate level. Unlike microeconomics it influences those areas in its study that mainly focus on the economy

1. Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. (4-6 sentences. 2.0 points)

If the price of airfare increases the demand for air travel will fall. Less people will be able to afford the higher prices for air travel.

Price control if not properly managed could be disastrous to the economy. It maynot only lead to higher prices in the long-run, but can even disrupt an industry. If pricesare not allowed to vary in response to greater risk, cost of production, and increasing costof staying in business, not enough producers would be encouraged to supply the product.

2.Scarcity can best be defined as a situation in whichA) there are no buyers willing to purchase what sellers have produced.B) there are not enough goods to satisfy all of the buyers' demand.C) the resources we use to produce goods and services are limited.D) there is more than enough money to satisfy consumers' wants.Points Earned: 0.4/0.4Correct Answer(s): C

Additionally, Sally is withdrawing $34,000 from her savings account that pays 4% interest/year to purchase the furniture and equipment; she will quit her current job that pays $25,000 per year. She expects total revenues from the new business in the first year to be $70,000. Calculate the following:

The increase in airfare will causes traveling demand to decrease since people are finding out means to travel rather not travel as much anymore since they are not willing to paying for the higher price.

Airlines use a formula of combining their yield and inventory costs to determine ticket prices. While it is imperative to focus on the idea of being profitable, the focus is to maximize the cost of the flight revenue. One huge factor that encourages an increase in the cost of tickets relates to a customer ordering a ticket close to the departing date, define this as a risk factor because they need to make up for all unsold seats. A high percentage of the revenue is dedicated to overhead costs such as fuel and labor. When a ticket price is higher with one airline than the other, the customer interprets this as being an excessive cost. The demand is greatly affected by the external market

Several narratives show that the rate of enterprise ownership are higher among immigrants than non-immigrants in most developed economies such as the US, UK, Canada, Germany, France and Australia (Taylor et al. 2014; Gomez et al. 2015; Linden et al. 2017). The study by Gomez et al. (2015) indicates while the rate of self-employment surges amongst immigrants, the rate is decreasing among non-immigrants in the US. The study by Linden et al. (2017) in most European countries shows that skilled immigrants are likely to begin enterprises with around 8 employees than comparable non-immigrants. This is because they understand the field they operate in through the training they have gained. Gomez et al. (2015) use the

Microeconomics is the economic influences that impact at the micro, or firm, rather than macro level. The study of this subject is one that is highly valuable for any studying business with the provision of knowledge that will increase understanding of different influences and support the decision making processes. With the knowledge gained, along with the skills in applying that knowledge developed through class work and exercises for the different modules, there has also been the development of increased confidence, both personal and in the theories, in using the relevant concepts and tools in a practical setting.

The sensitivity of demand of airline industry depends on the prices of air travel and incomes of the air travelers. Economic benefits come from air transport not only from its passengers and cargo shippers, but also from the vast businesses and individuals across the globe. But, the governments continuously imposing the air transport policies that are not for the desirable interests of the aviation industry and the wider economy. Governments has been implemented new taxes on the industry with an intension to take advantage of less sensitive changes in demand at the national level to increase revenues at its expense.

Throughout centuries, the United States of America has evolved and become more diverse, which has generated various changes in society as a whole. In consequence, such changes have led to numerous economical situations. Some situations required major changes and others required minor changes in the market economy. In either case, the price value of goods and services has continued to increase with time. So why has the cost of goods and services increased? In order to acquire some sort of explanation, one must examine the economic market and its process. First, consumers needs to apprehend that economics is an extremely important aspect of the today’s society, especially, since it aids in the allocation of limited resources. As well as, acknowledge that supply and demand are aspects and fundamental concepts of economics, which are considered the foundation of a market economy. In fact, the association between demand and supply underlie the forces responsible for the allocation of resources. Perhaps, by studying the behavior of individuals, their demands and wants, along with the operation process of the market, can one comprehend and accept the reasoning behind high prices. Therefore, given the importance of supply and demand and its impact on the market economy, one will elaborate on the law of supply and demand. In addition, one will discuss how these fundamental concepts of economics apply and impact the price value of Airline tickets.

The supplier power in airlines is dominated by the world’s two largest aircraft manufacturers are Airbus and Boeing. The competition between the two manufacturers is neck to neck but that would prove to be a boon for Emirates as the prices would not rocket through the ceiling. A study shows that Emirates holds 93 Boeing aircrafts and 83 Airbus units (Planespotters, 2009). In 2007, Emirates purchased 81 Airbus flights, to extend it services- however, they chose Airbus over Boeing as the latter failed to deliver its latest aircrafts on time and moreover, Airbus had quoted a good price (Barryl, 2007). The changing oil prices also have an adverse effect on the aviation industry. In a nutshell, the bargaining power of suppliers is high.

The growth of airline industry in any country is directly proportional to its GDP growth; the greater the business activity, the more air travel and the higher the GDP of the country. The demand

The price of fuel is now the greatest cost for many airlines. An upward spike can destabilize the business model.