Remember!!!

Name and formula

1) PED= %change in quantity demanded/%change in price

2) XED= % change in demand of product A/% change in price of product B

3) PES= % change in quantity supplied/% change in price

4) YED= % chane in quantity demanded/ % change in income

Interpretation

1) XED= +4-substitute
-0.6 complementary

2) YED= +3 normal goods
-2 inferior goods

3) PED= -3 elastic demand
+0.6 inelastic demand

4) PES= +5 elastic supply
+0.5 inelastic

Economic system of Hong Kong and Singapore

Well, at first glance Hong Kong and Singapoure are undeniably similar, because both they are small, with small population,they haven't got any important resources on their land, but these countries are on of the richest and highest GDP in the world. Hong Kong controls big and very important economic system in the world, for example, Hong Kong's very famous bank HSBC make a lot of finance operations in many modern and third world countries. They cooperate with famous banks such as RBS, Unicredit, Swiss bank. In spite of Hong Kong spent lots of money on resources such as oil, water,etc but they can make a really good profit on it and maintain their economics. And the most important part of economic system is that Hong Kong has included in group of Four tigers, with Singapore,South Korea and Taiwan and they have a special deal between each other. They have skilled workforce and have specialised in areas where they have competitive advantage. Singapore and Hong Kong became the world leading international finance centres and that's a big success while other big finance cities drop behind. Also Singapoure is very famous in electronic technologies, they make a massive amount of electronic things and they have a huge sea port, which maintain a big production with other big ports and improve their economic system. And one several years ago, Singapoure's government signed a deal with other countries of Four tigers group that Singapore will improve their education system because it will improve their productivity more and more. So, stability and one of the best economic system and biggest and modern financial centre attract many foreign companies and other biggest corporations to cooperate with each other.

Economic problem: is it possible to have no scarcity?

There are many interesting questions in economics, I have found a really urgent question nowadays, is it possible to have no scarcity?

So, if you look on many countries in the world you can see that scarcity is everywhere and in every economics system, of course in modern countries there is a less scarcity,but there is.

I think that scarcity in economics happens because government and people of many countries don't economise their budget properly and that's a big problem. People have to learn how to make a good economic system, for example: Germany country which glorifies by their economy system, they produce lots of good and different types of goods, they produce one of the best cars in the world, they know how to make their economics very stability without much scarcity and that's great. I think that stability and ability to save budget properly it is a main way to success. But I think that it is impossible to live without scarcity,if it is no scarcity in economics it will be not interesting to deal with economic and to solve problems also it will be derangements in all economics. Scarcity is an integral part of economics.

The formula of the cross elasticity of demand

This formula of the cross elasticity of demand. It uses to calculate the coefficient cross elasticity of demand.
In the example: two goods cars and fuel-consist of fuel consumption,they are complements,because fuel and cars uses for each other and in this case cross elasticity of demand will be negative because it shows to us the decrease in demand for cars when the price of fuel is increased so and in this case of perfect complements, the cross elasticity of demand is negative infinity.

Cross elasticity of demand

In economics the theory of cross elasticity of demand plays a very important part in economics.

The cross elasticity of demand shows to us the responsiveness of the demand of a good to change in the price of another good.

So, on this diagram we can see that both the price elasticity of demand for beer and the cross price elasticity of wine with the price of beer depend on the shape of price-consumption curve.

The price elasticity of demand for beer is the percentage reduction in the quantity of beer demanded. The cross price elasticity for the quantity of wine with respect to the price of beer is the percentage change in the quantity of wine demanded in response to a percent increase in the price of beer. When the price of beer falls,people buy more wine at the same constant price,so people should spend more on wine,because their budget didn't change and they spend more on wine,people must spend less on beer.

Costs of production

I have read a very interesting article about costs of production in the world. And there are some difficulties in the world with costs on products.

So, in last two years oil and other important resources such as gas, colour metall are rising in costs more and more.

And this changes impact upon firm's production costs. Oil and other resources are very important for our world, it's very hard to imagine our world without oil, gas, metall, etc, because most of our technologies move and develop by these important resources.

In case of oil, it's increasing in price and it gives some effects on all types of business,small as well as large. And in many companies with global production such as cars production. Metal prices become really expensive also oil prices become very expensive correspondingly prices on fuel are becoming expensive and all these things affect the distribution costs of all business. Now many people prefer go by buses or by bycycle because it is much cheaper.