Chapter 1.1, Problem 5R

To determine

Impact of items purchased by people on economy.

Explanation of Solution

Effect on businesses when people make purchases is given below:

 1. Pen:

When a pen is purchased, three businesses that benefitare:

• Plastic industry: it provides plastic to produce pen.
• Chemical industry: it provides ink.
• Pen industry: it produces and sells pen.

 2. Biscuit:

When a biscuit is purchased, the three businesses that benefit are:

• Sugar industry: it provides sugar.
• Flour industry: it provides flour which is a main ingredient.
• Biscuitindustry: it produces and sells biscuits.

 3. Movie ticket:

When people buy a movie ticket the following three businesses are benefited:

• Cinema hall owners: they provide the space and make arrangements.
• Movie making industry (like Hollywood): people from industry are the ones who make movies and earn money in return.
• Food industry: when people visit cinema hall they also buy some eatables like popcorn, chips, etc. in this way food industry is also benefited.

Economics Concept Introduction

Introduction:

Every purchase made by people affect the economy when people make purchases they generate demandand provide income to the various economic agents.