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surplus or a shortage of a good or service

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1)What role does economics play in our personal decisions? What role does economics play in the organizational decisions?

2)How does the availability of substitutes affect purchasing decisions?

3)How does a surplus or a shortage of a good or service affect the market price? How does global economic competition impact the duration of surplus/shortage condition and price elasticity in the domestic market?

Please explain and respond in your own words. Thank you in advance.

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1)What role does economics play in our personal decisions? What role does economics play in the organizational decisions?
As to our personal decisions, we usually need to solve the utility maximization problem given budget constraint. Such as, how do I max my total utility by choosing different bundles of bread and milk, given the amount of money in my pocket. The economic model shows that we can max the total utility by choosing MU1 / P1 = MU2 / P2.

As to the ...

Solution Summary

Discuss the availability of substitutes and its effects.

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Goods and services questions

1. Give an example of a good you purchase or market at your workplace to show why demand curve slopes downwards and why supply curve slopes upwards?

2. What factors shift your demand for goods (note: price is not a demand shifter)? Give an example of how a demand determinant shifted your demand for a good.

3. Describe a real-life shortage or surplus of a good you have wanted to purchase or market at your workplace. How is this imbalance reconciled in the marketplace?

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