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Fundamentals of economics

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I need your HELP answering these questions:

1. Explain how the circular flow diagram illustrates the interaction of households, governments, and business?

2. Illustrate market equilibrium using supply and demand curves?

3. Differentiate between movement along and shift of the demand curve?

4.Explain the relationship between market and aggregate supply and demand?

Can your answers be in paragraphs and can you give me the sources.
Also can you give me the meanings to circular flow diagram, market equilibrium, demand curve and aggregate?

Thank you, your HELP is GREATLY needed and appreciated.

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Solution Preview

Hi there,

Here are your answers:

Circular Flow Diagram:
The circular flow diagram divides the economy into two sectors: one concerned with producing goods and services, and the other with consuming them. Resources are converted into goods and services by business, and in this transformed state travel back to consumers. Money flows in the opposite direction. These flows involve two markets in which exchange takes place: the resource or factor market in which business buys resources, and the goods and services market in which business sells goods.

source: http://ingrimayne.saintjoe.edu/econ/TheFirm/CircularFlow.html

Market Equilibrium:
Markets exist in all types of goods and services, and as economists, we are interested in how they work and what causes them to change.

The market price is determined by the interaction of market supply (producers) and market demand (consumers).

The point ...

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Company is Burberry or Coach

You need to consider the ways in which the market for your designer's/brand's products/goods are segmented. The key to building a case for or against what your designer/brand is doing is to present the market structure for the products/goods your designer/brand sells including how that market is segmented, the target markets served, and who competes in those markets.

If you define the target market based on demographic, socio-psychographic, and/or geographic factors; be careful to cite substantial differences in behavior (clothing chosen) of shoppers by age, income, gender, marital status, and family life style. If you don't define the target market based on demographic, socio-psychographic, and/or geographic factors; you need to explain why those factors are not applicable for your designer/brand.

What is the socio-economic class of the buyer of your clothing? In other words, in terms of the marketing environment for clothing, you need to comment on the current socio-economic environment.

Is that buyer affected by swings in the economy?

Is there competition for your current, potential, or prospective buyers' business? If so, how competitive is it, out there? In other words, you also need to consider the ease with which competitors can duplicate your products (goods), your methods and content of promotion, your methods of distribution, and your prices.

Is the buyer/wearer:

A Man or Woman
A child or adult
Big or small
Short or tall
Need Slim or regular or husky
Need Pleats or no pleats

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In terms of price points:

1. Is there any competition at the low end?
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You will find instructions on how to get into databases that will help you find information on companies and products at the following url

This does NOT require a detailed essay. Instead use section headings for each of the topics you address in your paper followed by a discussion of each of those topics. Possible section/topic headings are:

Introduce the issue -- what designer's (brand, product, or good) are you analyzing, what are the problems that designer's (brand, product, or good) faces?

(1) Analyze the environment
(2) Target Market - current
(3) Products - current
(4) Promotion - current
(5) Distribution - current
(6) Pricing - current

Evaluate the importance of the following factors by current, potential, and/or prospective customers
(1) Marketing environment factors
(2) Target Market
(3) Products
(4) Promotion
(5) Distribution
(6) Pricing

Come to a Conclusion regarding the relative importance of the factors driving choice
(1) Marketing environment factors - defense of position
(2) Target Market - defense of position
(2) Products - defense of position
(3) Promotion - defense of position
(4) Distribution - defense of position
(5) Pricing- defense of position

Available on 12 May 2010 at

Latest luxury-retail reports illustrate spending upswing
Coach and Burberry reported solid sales growth, bearing out predictions that luxury-retail spending is recovering. "During the recession, it was not considered 'cool' to shop. So right now, people with money are spending because of that pent-up demand," says consultant Patricia Pao. "And interestingly, so are people with less money, not just because of pent-up demand, but also due to the new merchandising direction of prints and bright colors."

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