Economics assigment? Help me...........please>>>>?

Question

1. Why both rich and poor experience scarcity?

2. Two customers go to the fish counter at a supermarket to buy some fish. Neither looks at the price. Customer A orders 1 kilo. Customer B orders RM30 worth. What is the price elasticity of demand for fish of each of the two customers?

Answer 1

1, Bwcauxe rich or poor one has a finite income to save and dpend and so long as the iyems/ goods they want to buy are scarece due to a hiven capavity to produce any point of time, there will be need to pay prices for thw products/ goods and hence there will be scarcity. You cannot have as much as you k**e of all the things that you like within the finite income / budget you have to spend.

2. The one who orders for a kilo has a fxed need and it does not matter what is the price he will always consume one kilo. So the price elasticity of demand in his case is completely inelastic or Zero.

In the case of a person who orders for an amount equivalent worth of fish, the person is willing to buy to buy more or less of fish exactly in proportion to th the change in price. In this case price elasticity of demand is just 0ne 0r unity or ONE (1).

Answer 2

1. Because there are limited resources in the world; you can't have everything.  The poor person obviously has to make choices, since they can't afford everything, but even the rich person has to make choices, especially with regards to time, since they can't change the number of hours in a day.

2. Customer A has inelastic demand, because they don't change their consumption amount if the price changes.  Customer B is price elastic, since they reduce their demand if the price increases.