NAME – Hassan Usman Zia
SUBJECT MATTER – Introduction to Economics
STUDY COURSE CODE - PEC. 2013
SUBJECT LECTURER – Ms Naathiya Mohan
INSTITUTE – Institute Technology Pertama
PROBLEM – one particular
In the current situation were planning a 250-km trip to Thailand but you happen to be indifferent if we should require a bus or perhaps drive. While you are informed regarding the typical expense of travelling a 10, 000 kilometres driving simply by Hertz which might be as follows: Insurance – RM 1000
Interest – RM 2000
Energy and Essential oil – RM 1000
Repair – RM 1000
Sunk costs happen to be costs that cannot be averted, regardless of what is carried out in the future mainly because they already have recently been incurred. They can not be disregarded neither be avoided in the future for example Insurance and Interest. With this situation when Hertz offers us an estimate we ignore the two conditions of Interest and Interest because costing about RM 3000, we disregard the two conditions as they can be referred because SUNK COSTS. After neglecting the two costs of Interest and Insurance functioning at the remaining terms which are about Gas and Routine service costing up a total of RM 2150.
According to the calculations involved, it can be far better and economical to find the car. The response can be processed by the calculations involved and that are:
RM 2000 / 10, 500 km times 250 km
2000/10000 times 250
Now in line with the calculations it takes RM 55 in total to visit from an automobile rather than spending RM 95 for the bus fare to Thailand. From this point we asses that taking a shuttle bus for the trip is our Opportunity Cost, that people choose precisely what is best and give up the alternate choice pertaining to the decision taken.
According to part B in the following question, whenever we include the hassle and pressure of generating and the average one targeted traffic ticket to get RM 20 and RM 28 correspondingly for every 200 miles we all drive the decision will be the same and we'll definitely surrender the choice to look at the shuttle bus as per the calculations following: We all let go the trouble of traveling which adds up to RM twenty as per the guideline of Option Cost and that we focus on the rest of the value of RM twenty eight which is for the visitors ticket. The calculation is usually: 1 km = 0. 62 miles,
250 kilometers = 155 miles.
And so for every 2 hundred miles all of us drive,
RM 28 as well as 200 a long way x 155 miles
twenty-eight / two hundred x one hundred fifty five
= twenty-one. 7
sama dengan RM 21 years old. 7
Including the amount pertaining to the hassle of driving,
RM 21. several + RM 20 sama dengan RM 41. 7
Using this we get to find out that for each 200 a long way we travel we have to put an extra volume of RM 41. 7. This quantity leads all of us to the summing up for the answers of part A and part B: RM 50 + RM forty one. 7
40 + 41. 7
sama dengan 91. several
=RM 91. 7.
This kind of final quantity again states that going for a car remains cheaper even though travelling by the bus letting go of a do of RM 100. The total difference inside the both values is of RM 8. 3 stating then again that taking the car to get the trip is much more cost effective and inexpensive.
QUESTION – 2
In the following situation, if a scientific survey is issued stating that mercury will be found in the fish which is toxic to humans and may cause problems to health so this would definitely impact the fresh seafood market for the demand and provide.
The law of demand declares that " There is a great inverse relationship between price and volume demanded”.
There are 5 non-price factors affecting that impact demand which can be i. Rates of goods related in consumption ( Free of charge and Substitute) ii. Profits ( Typical and Inferior)
iii. Future objectives
iv. Taste and preferences
Through this situation we generally discuss Taste and preferences since when mercury found in fish is found poisonous to individuals, this in the end reduces the demand for the fish thus shifting the demand curve left and displaying the significant decrease in the graph.
Looking at the chart attached (Pl. turn over for the display of graph). The chart states there is a reduction in the price of the fish while the...